Chinese lithium producer faces challenges from weak product prices and tax dispute
- Tianqi Lithium shares fell sharply after warning of wider losses
- Expected to post a first-quarter loss of between CNY3.60 billion and CNY4.30 billion
- Cited a substantial decline in the sale prices of lithium products
- Effects of an associate company’s tax dispute in Chile
- Lithium carbonate prices have dropped about 60% from their peak in July last year
- Shenzhen Stock Exchange issued a warning letter to Tianqi Lithium
Tianqi Lithium shares took a nosedive after the company warned of wider losses due to weak product prices and a tax dispute in Chile. The company expects to post a first-quarter loss of between CNY3.60 billion and CNY4.30 billion, compared to a profit of CNY4.88 billion a year ago. This decline is attributed to a substantial drop in the sale prices of lithium products and a decrease in gross profit. Additionally, an associate company’s tax dispute in Chile is expected to further impact net profit. The decline in lithium carbonate prices, a key raw material for EV batteries, has also contributed to the company’s challenges. The Shenzhen Stock Exchange has issued a warning letter to Tianqi Lithium, requesting an analysis of the widening losses and potential risks. Nomura analysts expressed surprise at the wider loss, considering the stabilization of lithium prices and the anticipated benefits of a new pricing mechanism for the company’s Greenbushes mine in Australia. Despite the challenges, Nomura maintains a buy rating on the shares with a target price of CNY50.
Factuality Level: 8
Factuality Justification: The article provides specific details about Tianqi Lithium Corp.’s financial situation, including the expected first-quarter loss and the reasons behind it. It includes information about the drop in lithium product prices, the tax dispute in Chile, and the impact on the company’s stock prices. The article also mentions the warning letter from the Shenzhen Stock Exchange and analyst opinions. Overall, the article sticks to the main topic without digressions or irrelevant information, and the facts presented are supported by evidence.
Noise Level: 3
Noise Justification: The article provides detailed information about Tianqi Lithium Corp.’s financial situation, including the reasons behind their expected losses and the impact on their stock prices. It includes relevant data such as the percentage decrease in shares, the reasons for the losses, and analyst opinions. However, the article lacks in-depth analysis of long-term trends or solutions to the challenges faced by the company.
Financial Relevance: Yes
Financial Markets Impacted: Tianqi Lithium Corp.
Presence Of Extreme Event: No
Nature Of Extreme Event: No
Impact Rating Of The Extreme Event: No
Rating Justification: The article pertains to the financial performance of Tianqi Lithium Corp., a Chinese lithium producer. It discusses the company’s warning of widening losses due to weak product prices and a tax dispute in Chile. The article also mentions the decline in lithium carbonate prices, which is a key raw material for EV batteries. However, there is no mention of an extreme event or its impact rating.
Public Companies: Tianqi Lithium Corp. (002466)
Key People: Ethan Zhang (Analyst at Nomura), Jiahui Huang (Author)
Reported publicly:
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