Has Tianqi Lithium stabilized amid its explosive performance?

In Q1, the company expects to achieve a net profit attributable to shareholders of RMB 1.70–2.00 billion, representing a year-on-year increase of 1,530.3%–1,818.0%. Its non-recurring net profit is likewise extraordinary, projected at RMB 1.60–1.96 billion, soaring 3,501.5%–4,311.9% year-on-year. How were these multiples-of-tens-of-times growth figures achieved? There are two main drivers: First, fundamentals have genuinely improved—the company states it benefited from multiple favorable factors, including the development of the new-energy industry and growing downstream demand, resulting in significantly higher average selling prices for its key lithium products compared to the same period last year. Second, an "extremely low base" amplified the visual impact: In Q1 2025, the company was at its earnings nadir, with attributable net profit standing at only RMB 100 million (non-recurring net profit just over RMB 40 million). The combination of rising volumes and prices, coupled with the ultra-low base, jointly triggered this "explosive earnings growth." (Tianqi Lithium Earnings Preview) This earnings preview corroborates management’s assessment of the industry’s supply-demand dynamics: globally, the lithium sector as a whole is expected to enter a state of tight balance in 2026. Actual industry operations since Q2 also support this outlook; the company expects lithium ore supply to remain relatively tight throughout H1. (Tianqi Lithium: Investor Relations Record, April 8, 2026) Investment Gains Drive Return to Profitability; Pricing Mechanism Optimized Looking back at 2025, the company’s overall operations marked a bottoming-out and rebound: full-year revenue totaled RMB 10.35 billion, down 20.8% year-on-year; on the profit front, it turned from loss to profit, achieving an attributable net profit of RMB 460 million—up 105.9% versus a RMB 7.9-billion loss in the prior year. Nonetheless, the company opted not to distribute dividends, citing its current critical phase of resource reserve buildup and business expansion, necessitating retained cash to ensure financial safety margins for capacity expansion and industrial chain extension. (Tianqi Lithium: Investor Relations Record, April 8, 2026) Reviewing dividend history over the past seven years, the company paid cash dividends only in 2022 and 2023—years when free cash flow was robust. In fact, the modest profitability in 2025 stemmed primarily from gains on its equity investment in SQM. In 2025, the company recognized investment income from SQM amounting to nearly RMB 670 million—clearly exceeding its total attributable net profit of RMB 460 million, indicating that its core operations remained unprofitable. SQM holds mining and operating rights to Chile’s Salar de Atacama—the world’s largest lithium-rich brine lake. The Atacama Salt Flat boasts high lithium concentration, vast reserves, mature extraction conditions, and low operating costs, making it one of the world’s most advantaged brine resources and a major global lithium production hub. Clearly, such “passive profitability” reliant on ancillary investments is inherently unstable. (2025 Annual Report) Worth noting is the shortened pricing cycle at Wenfield Lithium—a subsidiary under Tianqi’s control—which significantly mitigates timing mismatches between upstream concentrate pricing and downstream product pricing, thereby enhancing the company’s resilience against lithium price volatility. (2025 Annual Report) SQM Faces “Takeover” Pressure In recent years, developments at SQM have drawn intense market attention. The catalyst stems from the Chilean government’s efforts to strengthen state control over salt-flat resources—specifically, its intention to bring SQM’s core asset, the Salar de Atacama, into a joint venture framework via state-owned Codelco.

Tianqi Lithium forecasts a 27–32-fold surge in net profit for the first three quarters; Bloomberg’s data is the key variable.

SQM’s net profit for Q1 2026 stood at USD 365 million; for Q2 2026, it reached USD 660 million. A group of institutions—including Bloomberg—forecast SQM’s EPS for Q3 2026 at USD 2.02–2.11, translating to a net profit of USD 577–603 million. Assuming these forecasts prove reasonably accurate, SQM’s cumulative net profit for the first three quarters of 2026 would fall between USD 1.602 billion and USD 1.628 billion—representing a 296.53%–302.97% increase over the USD 404 million recorded in the same period of 2025. Tianqi Lithium holds an indirect 21.90% equity stake in SQM; thus, its investment income from SQM for the first three quarters of 2026 is estimated at USD 351–357 million—equivalent to RMB 2.491–2.531 billion. It must be emphasized that all these figures hinge entirely on the accuracy of Bloomberg’s forecasts. Er’er Finance notes that, starting from the Q1 2022 earnings report, whenever SQM had not yet disclosed its corresponding quarterly results, Tianqi Lithium used Bloomberg’s forecast data to estimate its investment income from SQM; any discrepancy was then adjusted and settled in the following quarter upon SQM’s official financial disclosure. According to Tianqi Lithium, SQM is listed on both the Santiago Stock Exchange and the New York Stock Exchange. Under disclosure rules of both exchanges, SQM releases its quarterly financial reports later than Tianqi Lithium issues its earnings preview. Consequently, Tianqi Lithium cannot disclose its own quarterly financial information before SQM does. Therefore, its financial modeling incorporates Bloomberg’s forecasts to estimate SQM’s Q3 2026 operating profit or loss—and, based on its shareholding ratio, to project the associated investment income. This projected investment income may differ from the actual investment income calculated using SQM’s officially announced net profit and Tianqi’s ownership percentage. The company will strictly adhere to applicable accounting standards and information disclosure requirements to promptly account for and disclose any material discrepancies. Tianqi Lithium is scheduled to release its Q3 2026 report on October 26, 2026, whereas SQM is not expected to publish its Q3 report until November 17, 2026—meaning Tianqi Lithium’s reported Q3 net profit will inevitably be an estimate, built upon Bloomberg’s forecast data. In fact, Bloomberg has exhibited notable forecasting errors regarding SQM’s earnings on multiple occasions. On April 30, 2022, Tianqi Lithium released its Q1 2022 report, estimating its associate investment income from SQM based on Bloomberg’s forecast: Bloomberg had predicted SQM’s Q1 2022 net profit at approximately USD 340 million. However, on May 18, 2022, SQM disclosed its actual Q1 2022 net profit at USD 796.1 million—substantially exceeding Bloomberg’s projection.

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