Lithium prices surge, driving stellar financial performance: Tianqi Lithium’s Q1 revenue doubles and net profit soars by 1,699% | Financial Report Insights

The company completed a new H-share placement and issued convertible H-share bonds in Q1: it placed 65.05 million H-shares at HK$45.05 per share and issued convertible corporate bonds with a total principal amount of RMB 2.6 billion. Concurrently, Talison’s Phase III chemical-grade spodumene expansion project entered its capacity-ramping phase, and the SQM–Codelco joint venture transaction officially took effect (the Tianqi Chile litigation concluded with a final appellate ruling against Tianqi). Thus, the company advanced both its ‘capacity expansion’ and ‘overseas equity enhancement’ strategic pillars simultaneously during the reporting period. This quarterly report is unaudited. The direct driver behind the revenue doubling: rising average lithium product prices restoring gross margins The company attributed its substantial revenue growth to “a significant year-on-year increase in the average selling prices of its core lithium products.” Based on financial statement figures, the quarter’s operating costs totaled approximately RMB 1.915 billion, generating gross profit of about RMB 3.213 billion and a gross margin of roughly 62.7%; by comparison, the gross margin stood at approximately 44.3% in the same period last year—a nearly 20-percentage-point improvement, clearly demonstrating the pronounced profit-boosting impact of price increases. On the expense side, sales expenses amounted to approximately RMB 2.08 million; administrative expenses totaled about RMB 132 million (down year-on-year); and R&D expenses reached around RMB 12.88 million (up year-on-year). Overall expense ratios remained low, enabling smoother pass-through of gross margin improvements to the bottom line. The company disclosed that Talison’s Phase III chemical-grade spodumene expansion project was completed and officially commenced feedstock trial operations on December 18, 2025, and produced its first batch of compliant chemical-grade spodumene on January 30, 2026. Subsequent efforts will focus on accelerating capacity ramp-up and continuous optimization to achieve stable, uninterrupted production. For lithium industry players, the pace from ‘commissioning’ to ‘stable, full-capacity operation’ directly influences cost efficiency, supply reliability, and delivery capability to downstream customers. The sharp rise in net profit attributable to shareholders stems from more than just ‘lithium prices’: investment gains from SQM and a shift to negative finance costs jointly amplified earnings elasticity Several key incremental items on the income statement warrant separate analysis: • Investment income surged notably: current-period investment income totaled approximately RMB 475 million, an increase of about RMB 323 million year-on-year; of this, investment income from associates and joint ventures amounted to roughly RMB 428 million. In its explanation of the change, the company cited Bloomberg forecast data indicating SQM’s Q1 2026 earnings are expected to grow substantially year-on-year, resulting in higher recognized investment income from SQM. • Finance costs turned negative: current-period finance costs were approximately -RMB 151 million, versus +RMB 27.24 million in the same period last year. This single item significantly boosted operating profit (though the excerpt does not further break down its components—e.g., foreign exchange gains—into finer detail). • Impairment items contributed positively to profit: the asset impairment loss line item registered +RMB 114 million (shown as a positive value per reporting convention), markedly improved from -RMB 20.79 million in the prior-year period—indicating net reversals or reduced impairment losses supported profitability. Ultimately, the company achieved operating profit of approximately RMB 3.736 billion, profit before tax of about RMB 3.748 billion, and net profit attributable to shareholders of approximately RMB 1.876 billion.

Jiaolong Chuhai Series · Sector Focus · #3 Energy Metals (Full-Chain Resonance Across Lithium, Cobalt, Nickel, and Rare Earths)

The rare earth sector delivered equally explosive results: Northern Rare Earth reported Q1 net profit attributable to shareholders of RMB 918 million, up 113.12% year-on-year; non-recurring net profit reached RMB 883 million, up 103.21% year-on-year. In Q1 2026, the overall rare earth market strengthened, with major rare earth product prices trending upward amid volatility. Zhongwei New Materials—the leading cathode precursor manufacturer—expects Q1 non-recurring net profit of RMB 490–550 million, up 86.27%–109.08% year-on-year. Benefiting from rapid global growth in new-energy markets and its dominant position in battery materials, the company sold nearly 130,000 tonnes of battery materials—including nickel-based, cobalt-based, phosphorus-based, and sodium-based products—resulting in robust production and sales across its battery materials business. CATL, a leading downstream battery manufacturer, posted Q1 net profit attributable to shareholders of RMB 20.738 billion, up 48.52% year-on-year—the highest quarterly profit ever recorded—with revenue of approximately RMB 129.1 billion, up ~52% year-on-year. GEM reported Q1 operating revenue of RMB 9.982 billion, up 5.12% year-on-year, and net profit attributable to shareholders of RMB 522 million, up 2.18% year-on-year. Its gross margin rose year-on-year to 17.47%, marking three consecutive quarters of sequential improvement. The performance surge across the energy metals sector reflects not a ‘single-commodity’ pulse but broad-based, synchronized strength across lithium, cobalt, nickel, and rare earths. The entire value chain—from upstream resources and midstream smelting/processing to downstream battery materials—is entering an upcycle. II. Comprehensive Performance Validation Across All Four Commodities 2.1 Lithium: Price ‘V-shaped Reversal,’ Leading Companies’ Earnings Soar Ganfeng Lithium achieved Q1 2026 operating revenue of approximately RMB 9.478 billion, up ~162% year-on-year; net profit attributable to shareholders reached RMB 1.837 billion, up 311.79% year-on-year. Tianqi Lithium’s Q1 net profit attributable to shareholders totaled approximately RMB 1.876 billion, up ~16.99-fold year-on-year. Core drivers of this explosive growth: First, favorable factors including new-energy industry development and robust downstream demand drove notable year-on-year increases in average selling prices for the company’s main lithium products, significantly boosting both revenue and gross profit. Second, media forecasts indicate SQM’s Q1 2026 earnings are expected to surge year-on-year, leading to higher recognized investment income from this associate company. Lithium carbonate prices exhibited a ‘V-shaped reversal’ in Q1, breaking above RMB 110,000 per tonne in early January and climbing steadily to RMB 180,000 per tonne, posting a quarterly gain of 28%. Two key factors underpinned lithium prices: (i) Zimbabwe’s introduction of lithium ore export quota policies heightened expectations of tightened supply; and (ii) sustained strong global demand for new-energy vehicles and energy storage, coupled with uncertainty surrounding Australian mine output. 2.2 Cobalt: Rising Copper–Cobalt Prices Propel Tengyuan Cobalt’s Forecasted >3x Profit Growth Tengyuan Cobalt expects Q1 net profit attributable to shareholders of RMB 504–558 million, up 308.22%–351.95% year-on-year. During the reporting period, market prices for cobalt, copper, and other metals rose markedly year-on-year. Meanwhile, Tengyuan’s copper output from its Democratic Republic of Congo operations increased year-on-year, significantly enhancing the company’s production–sales volume and profitability.