Has Tianqi Lithium stabilized amid its explosive performance?

On the evening of April 20, Tianqi Lithium (002466.SZ) released a highly explosive earnings preview. For Q1, the company expects its net profit attributable to shareholders to reach RMB 1.7–2.0 billion, representing a year-on-year growth of 1,530.3% to 1,818.0%. Its扣非 net profit is likewise extraordinary, projected at RMB 1.6–1.96 billion, surging 3,501.5% to 4,311.9% year-on-year. How were these multiples-of-tens growth figures achieved? There are two main drivers: First, fundamentals have genuinely improved—the company stated 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 primary 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 only RMB 100 million in net profit attributable to shareholders (and just over RMB 40 million in扣非 net profit). The combination of rising volumes and prices, coupled with the ultra-low base, jointly triggered this 'earnings explosion'. (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 further support this forecast; the company expects lithium ore supply to remain relatively tight throughout H1. (Tianqi Lithium: Investor Relations Activity Record, April 8, 2026) Investment Gains Drive Turnaround; Pricing Mechanism Optimized Looking back at 2025, the company’s overall operations showed clear bottoming-out and recovery. Full-year revenue totaled RMB 10.35 billion, down 20.8% year-on-year; on the profit front, it successfully turned from loss to profit, with net profit attributable to shareholders reaching RMB 460 million—up 105.9% versus a RMB 7.9-billion loss in the prior year. However, 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 Activity 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, Tianqi’s modest 2025 turnaround was primarily driven by investment gains from its equity stake in SQM. In 2025, the company recognized nearly RMB 670 million in investment income from SQM—clearly exceeding its total net profit attributable to shareholders of RMB 460 million—indicating that its core operations remained unprofitable. SQM holds mining and operating rights to Chile’s Atacama Salt Flat—the world’s largest lithium-rich brine resource. 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 key global lithium production hub. Clearly, such 'passive profitability' reliant on non-core businesses is inherently unstable. (2025 Annual Report) A notable highlight is the shortened pricing cycle for spodumene concentrate supplied by Tianqi’s subsidiary, Wenefield. This significantly reduces the time lag between upstream concentrate pricing and downstream product pricing, thereby enhancing the company’s resilience against lithium price volatility. (2025 Annual Report) SQM Faces 'Nationalization' Pressure In recent years, developments at SQM have drawn intense market attention. The catalyst stems from the Chilean government’s efforts to strengthen control over salt-flat resources—specifically, its intention to bring SQM’s core asset, the Atacama Salt Flat, under a joint venture framework led by state-owned Codelco.

Tianqi Lithium: Net profit surged 4,925%, yet its stock price fell 13%—why?

The paradox—surging profits yet falling share price—lies in Tianqi’s 'extreme concentration' strategic structure. Its fate hinges entirely on three tightly interwoven levers: 'lithium prices + Greenbushes + SQM.' Below, we break this down across six dimensions. Issue One: Over-Reliance on a Single Resource—Greenbushes Is 'Aging.' Almost all chemical-grade spodumene concentrate required by Tianqi’s lithium chemical plants comes exclusively from the Greenbushes mine. Though this mine accounted for only 9.3% of global lithium resource project output in 2025, it remains Tianqi’s absolute 'cash cow'—any disruption here reverberates across the entire consolidated P&L: A fire incident at CGP3 in June 2026 triggered maintenance-related shutdowns (the second such disruption after delayed commissioning in January 2025); IGO’s latest report cut its FY2026 production forecast by ~11% to 1.375–1.425 million tonnes, citing declining ore quality—lower grade feed and reduced recovery rates—a natural signal of an aging mine. Meanwhile, the replacement mine—Cuola in Sichuan’s Ya’an—has held mining rights since 2012 but remains stuck in pre-development stages. The fundamental contradiction is clear: 'the best mine' does not mean 'the eternally best mine'; the physical width of Tianqi’s resource moat is gradually narrowing. Issue Two: Strong Cyclical Exposure—The 2024 Loss of RMB 7.9 Billion Could Repeat. Tianqi’s net profit attributable to shareholders swung violently—from a loss of RMB 7.905 billion in 2024 to a profit of RMB 24.125 billion in 2022. Its 2024 loss alone nearly erased its entire 2023 profit—because during lithium price downturns, it lacks hedging mechanisms (Ganfeng has battery operations; Salt Lake has potassium fertilizer cash flow as a buffer; Tianqi has neither). Modeling shows that for every RMB 10,000/ton increase in lithium prices, Tianqi’s annual profit rises by ~RMB 2.5 billion—the highest elasticity among peers—but the reverse holds equally true. Issue Three: SQM Is Being 'Systematically Dismantled,' While Core Operations Remain Unprofitable. This is a unique challenge facing Tianqi—not shared by Ganfeng or Salt Lake. In January 2026, Chile’s Supreme Court upheld the lower court ruling, finalizing SQM’s partnership agreement with state-owned Codelco: From 2025–2030, 70% of the JV’s operating profit flows to the Chilean government; from 2031 onward, that share rises to 85%, stripping SQM of control over Atacama’s core lithium business. Even more revealing: Tianqi’s 2025 net profit attributable to shareholders stood at just RMB 463 million, while its equity-method investment income from SQM reached RMB 665 million—meaning its core operations ran at a full-year loss, propped up solely by SQM’s contribution. Once this 'secondary axis' is dismantled post-2031, what will fill Tianqi’s profit gap? Moreover, Australia’s tax authority is reviewing the TLEA transaction structure, exposing potential tax liabilities of ~AUD 170 million—a real and present risk. Issue Four: Midstream Underdevelopment—Lithium Salt Capacity Only One-Third of Ganfeng’s. Tianqi’s current lithium salt production capacity stands at 121,600 tonnes/year, versus Ganfeng’s 348,000 tonnes/year; downstream integration is severely limited—no battery manufacturing or energy storage terminal businesses to hedge against lithium price declines—only minor equity stakes (e.g., 2.91% in Weilan, 6.06% in SES AI). This means Tianqi is purely 'exposed at the hard-rock mining end,' whereas Ganfeng smooths cyclical volatility via its integrated value chain.

Sociedad Quimica y Minera (SQM) Highlights Commodity Cash Flow and Distribution Flexibility

Aug 18, 2026

Sociedad Quimica y Minera is set to publish a financial update focusing on commodity cash flow and distribution flexibility. Market attention centers on lithium conditions, iodine demand, and balance-sheet capacity to assess operational health.

Kalkine Media

2026-03-31

SQM Proposes 50% 2025 Earnings Payout, Stock Rises 7.3%

2026-04-13

Sociedad Quimica y Minera de Chile Stock Hits 52-Week High

2026-04-15

SQM (NYSE: SQM) files updated technical report summaries on Chile properties

2026-04-15

SQM Files Salar de Atacama Technical Report Summary and Consents

2026-04-17

Sociedad Quimica y Minera Shares Fall 7.2% Amid Analyst Concerns