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Tesla concept of hot and bright prospects of new energy vehicles is expected to make lithium leading industry chain Tianqi Lithium Industries (002466.SZ) also began a rapid expansion pace. In the last less than six months time, Tian Qi Li industry has punched 4.2 billion yuan acquisition, intended to create a "lithium industry in the Kingdom."
August 25, stop plate nearly four months Tianqi Lithium Industries fupan and announced that $ 122 million is intended to (about 756 million yuan) acquisition of 100% stake in Galaxy Lithium International, which holds the Galaxy 100% stake in the company's lithium industry in Jiangsu, Jiangsu Yinhe lithium industry has an annual output of 17,000 tons of lithium carbonate production line. In this year's May 24, the company acquired the Australian lithium ore Tai Lisen Commission has obtained approval, August 21 announcement the company also said it would to 311 million yuan acquisition of lithium industry Zabuye 20% stake, coded "ore + Brine "lithium resource materials.
In this regard Haitong Securities said in a recent research report mentioned in the new energy automobile substantial volume of background, lithium carbonate demand in the next three years is expected to achieve double growth. Medium and long term, lithium carbonate supply will remain tight state, the price is expected to rise.
Although electric vehicles will usher in development, but the lithium itself faced with competition from other products, in many respects than the vanadium lithium battery has an advantage, in addition to electric bikes currently used mainly lead-acid batteries, and the company acquired and Galaxy Lithium Jiangsu is currently at a loss, the company is 140% of the premium rate to be in the bag.
In this regard Tianqi Lithium Industries, said, "Galaxy's Jiangsu lithium industry put into operation a short time, capacity release effective economies of scale have not yet reached capacity if it is released to achieve effective economies of scale, to achieve profitability as soon as the Galaxy lithium industry still has confidence ; the long term, China's new energy automotive industry will achieve great progress, so as to drive the upstream lithium salt and lithium concentrate product demand growth. "
Some analysts have pointed to this, Tian Qi Li industry these acquisitions intended to "control the upstream resources, layout products deep processing, expanding its territory chain, from the market at the beginning of pure lithium processing enterprises, and gradually become a set of spodumene resources , lithium ore mining and processing, deep processing of lithium products and international sales of lithium companies. "
Premium 140% acquisition of losses
August 25, suspended for nearly four months Tianqi Lithium Industries released a major asset purchase plans, (a wholly owned subsidiary of the Company) Tian Qi Li industry in Hong Kong will hold the acquisition of Galaxy Lithium Australia $ 122 million Galaxy Lithium International its wholly owned subsidiary, Galaxy Lithium Jiangsu 100% stake.
"China Business" reporter noted that the main subject of the transaction assets held by Galaxy 100% equity interest in Jiangsu lithium industry is currently at a loss, the company to 140% of the premium rate to be acquired.
Statistics show that the acquisition of the underlying asset Galaxy Lithium International main asset for the Galaxy's Jiangsu lithium industry. The company in April 2012 began trial production, the main products for battery grade lithium carbonate. It has China's first fully automated lithium carbonate production line, the production line capacity of 17,000 tons / year, as of December 2013, the valuation of the Galaxy's Jiangsu lithium industry is 236 million - $ 273 million. After the transaction negotiations consultations to determine the enterprise value of $ 230 million, net of all debt of about $ 108 million, the final valuation of $ 122 million.
Tianqi Lithium Industries, said the Galaxy Lithium International as of April 30, 2014 declaration of net asset value of 316 million yuan, while the price of the transaction or about 756 million yuan, a premium rate of 140%. Although the Galaxy Lithium Jiangsu now basically to achieve uninterrupted continuous production design requirements, but because of its high rate of assets and liabilities, the effective yield economies of scale have not yet reached, is also not profitable, and profitable time of uncertainty.
Now, so why should Tianqi Lithium Industries acquired it, Announcements, Galaxy Lithium located in the eastern coastal Jiangsu Zhangjiagang, lithium carbonate has the only fully automated production lines, with an annual output of 17,000 tons of battery grade lithium carbonate production capacity, as the global the largest, in terms of transportation costs, human resources and supporting facilities have the advantage, strong product quality control, and access to the major domestic manufacturers of cathode material supplier qualification, the realization of a stable supply of high-end markets, Japan and Korea.
The company September 4 made further explained in an e-mail reply to a reporter, "Galaxy Lithium Jiangsu annual 17,000 tons of lithium carbonate production line has a lot of money comes mainly from bank loans, corporate debt ratio is always at a higher level , and the company put into operation a short time, the production release has not yet reached an effective economies of scale, higher interest expense and operating costs resulting in significant losses in recent years. currently Tianqi Lithium Industries commissioned Galaxy Lithium lithium ore processing are used From Tai Lisen, if the acquisition is completed, continue to use lithium concentrate 泰利森 conducted large-scale continuous production, to solve the problem of raw material costs and quality; capacity if it is released to achieve effective economies of scale, product prices gradually stabilize and rise of the Galaxy Lithium profitability as soon as possible or have confidence. "
The company also said that through the acquisition of Jiangsu Galaxy Lithium, lithium products company midstream processing capacity will rapidly expanding rapidly increasing production and sale of lithium products so 泰利森 lithium refined mineral and downstream processing capacity can be better matched conducive synergies and economies of scale. After the completion of the acquisition, the company production capacity lithium product more than 30,000 tons / year. Expanded sales, increase market share, customer resource sharing, and aid the development of large-scale lithium industry in Jiangsu Yinhe geographical advantages to achieve lower costs, will further consolidate and enhance the company's subsequent profitability and competitiveness.
With new energy vehicles domestic policy support, as a key materials, new energy vehicles, the demand for lithium carbonate or will further increase, data show that the average electric car needs 5kg to 60kg lithium carbonate equivalent. At present, China mainly relies on imports of lithium carbonate from overseas, according to the relevant forecasts, in 2015 and 2020, respectively, of lithium carbonate demand will reach 197,000 tons and 366,000 tons.
Tianqi Lithium has an annual output of 2,500 tons of battery grade lithium carbonate production capacity, and another 5,000 tons this year raised over the project was officially put into operation. But upstream lithium ore procurement costs are rising, it was reported in mid-2013, lithium carbonate direct material costs during the reporting period accounted for 82.27% share of operating costs, up 4.26 percent compared to 2012, primarily due to growth from ore purchasing costs.
Rapid expansion, so that control of lithium resources become more urgent, mining has become the focus of its acquisition stage. A brokerage analysts pointed out, "The acquisition will rapidly improve product quality Tian Qi Li industry, production capacity and market share, is conducive to further develop the company's lithium ore resources. Complete the strengthening of the industry will Tianqi Lithium carbonate production capacity acquisition, not only benefit from the rapid development of new energy industries, can also strengthen the pricing right to speak lithium products. "
4.2 billion with three cities
This is just the company nearly three months to three acquisitions generous one, in May of this year, Tian Qi Li industry 3.1 billion yuan private placement completed the acquisition of Tianqi Group indirectly holds a 51% stake in Wen Field, and Tianqi Group directly holds Some days Qi Mining 100% stake in the world's largest solid lithium mine owners and suppliers Tai Lisen bag.
It is reported that Wen Field, a wholly owned subsidiary Tai Lisen is currently the world's largest solid lithium mine owners and suppliers, the total global supply of spodumene quarry two-thirds of the total global lithium resources (including spodumene, Salt Lake Lithium product) market share of about 30%. Tianqi Lithium Industries, only 37.9103 million yuan net profit in 2013, with "Tunxiang" approach successfully competing in earnings of more than 24 million Australian dollars (about 160 million yuan) of 泰利森.
That time Tianqi Lithium Industries chairman Jiang Weiping has said publicly that the acquisition 泰利森 is to seize the lithium ore resources.
Since August 21, the day the announcement said Qi Li industry again, the way the company through the network to 311 million yuan bid to become Tibet Shigatse Zabuye Lithium-tech Co., Ltd. 20% stake in the highest bidder, the major shareholders renounce Tibet Mining pre-emptive rights, Tian Qi Li industry to become the final transfer of ownership transferee.
Statistics show that the main asset of Shigatse Zabuye Zabuye Salt Lake, is a lithium-rich carbonated Salt Lake, is the rare quality of large salt lake, contains a considerable amount of Glauber's salt, trona, lithium, potassium, boron and other minerals , is the largest known domestic borax content, but also has a large ultra-megaton Salt Lake lithium ore resources.
In addition, BYD Lithium Zabuye holds 18% stake in Tibet Mining places holding 50.72% stake, the main asset of Zabuye Salt Lake, is the largest known domestic borax content, with ultra-megaton lithium ore large salt lake resources.
Jiang Weiping has said series of strategic acquisitions mainly based on the layout of the company's industrial chain development, from business-to-lithium downstream industries especially optimistic about the future development of new energy sources.
So far Tianqi Lithium "resource + processing" to expand the scope being formed. Tianqi Lithium Industries, said the acquisition, the company midstream lithium products processing capacity will be further expanded to a subsidiary 泰利森 lithium refined mineral can get a better match with the downstream processing capacity, in order to achieve synergy and economies of scale.
The company semi-annual report shows that the first half of this year the company achieved total revenue of 646.83 million yuan, an increase of 35.61%. Among them, the lithium salt product first half operating income of 222.62 million yuan, an increase of 24.21%; lithium concentrate product first half operating income of 414.59 million yuan, an increase of 42.31%. Main business consolidated gross profit margin reached 23.87%, up 5.11 percentage points, which is considered the same period last year mainly due to the acquisition of premium text Rumsfeld assessed due to increased inventory value. But it is worth noting that the main business products division, the Tianqi Lithium carbonate gross margin in the first half of this year was only -2.76%, down 24.47 points, lithium derivative product gross margin also decreased 9.49 percentage points.
The company explains in its annual report, "add an annual output 5000 tons of battery grade lithium carbonate technological expansion project," completed in November 2013, during the reporting period, the device is still in the run-in period, higher raw material consumption products. Raised funds to build "an annual output of 5,000 tons of lithium hydroxide Project" and "add an annual output 5000 tons of battery grade lithium carbonate technological expansion project," shared the preceding process, there is also the problem of high consumption; raw material prices during the reporting period rise, but the product price does not rise accordingly.
According to the Institute of Engineering lithium industry shows 1 to May 2014, China lithium rose 4% and 1% in the consumption of electric vehicles and energy storage, respectively. In the continuous support of national policies, the external environment and supporting the development of new energy vehicles will be more optimized and mature. In the long run, China's new energy automotive industry will achieve great progress, thereby stimulating growth in the upstream lithium salt and lithium concentrate product demand.
But reporters noted that the first half of 2014, domestic lithium industry in 2013 continued the trend, Tian Qi Li industry competitive situation facing the company is considered to still more severe. Only the lithium battery industry chain cathode materials with higher added value, you battle a variety of routes lithium cobalt oxide, lithium manganese oxide, nickel oxide, lithium nickel cobalt manganese lithium and lithium iron phosphate, lithium carbonate exists. In addition, the lithium itself is also facing competition from other products. It is reported that vanadium battery energy storage in solar, wind energy storage advantage is more obvious. In addition, there are many recent reports about aluminum batteries, magnesium batteries.
In this regard the company said: "can be used as cathode materials for lithium batteries does a lot of product categories, the current structure of the global cathode materials industry is gradually changing, where market share increased year by year and ternary materials generally refers to ternary nickel cathode material. cobalt manganese lithium downstream industry chain of production for the company, the company currently does not directly produce ternary material or cathode material, the company produced lithium carbonate, lithium hydroxide products can be processed into synthetic ternary material in the continuous support of national policy , the external environment and supporting the development of new energy vehicles will be more optimized and mature. long term, China's new energy automotive industry will achieve great progress, thereby stimulating growth in the upstream lithium salt and lithium concentrate product demand. "
In addition, the company also stressed to reporters: "pulling power lithium demand comes mainly from the following three aspects, not just the battery: the rapid spread of the consumer electronics market, smartphones, tablets, laptops and other mobile devices pull lithium demand ; electric vehicles and energy storage in the next few years will show explosive growth trend; electric bicycles currently mainly used lead-acid batteries, lead-acid batteries with the upcoming levy consumption tax, reduce the cost of lithium batteries, as well as its energy density and environmental aspects of the advantages, will gradually replace lead-acid batteries. "