Lithium Battery Materials Drive Performance Growth　Tianqi Materials' Multiple Production Capacities Fall Short of Expectations

Recently, Guangzhou Tinci High-tech Materials Co., Ltd. (referred to as “Tinci Materials,” 002709.SZ) announced its 2025 annual report. Benefiting from the growing demand in the lithium battery materials market, the company’s full-year performance showed significant growth. During the reporting period, the company achieved total operating revenue of 16.65 billion yuan, up 33% year-over-year; net profit attributable to shareholders was 1.362 billion yuan, an increase of 181.43%.

Shareholder returns: Tinci Materials plans to distribute a cash dividend of 3 yuan (tax included) per 10 shares to all shareholders (excluding the repurchase account), with a total estimated dividend payout of 608 million yuan, including a special dividend of 1 yuan per 10 shares.

Lithium Battery Materials Drive Performance Growth

Founded in June 2000, Tinci Materials’ core businesses are lithium-ion battery materials and daily chemical materials and specialty chemicals. From the market environment perspective, downstream applications of lithium battery materials are lithium-ion battery products, widely used in power, energy storage, and consumer electronics. The development of the new energy vehicle industry is the main driver of lithium-ion batteries and upstream materials, with recent accelerated demand in energy storage becoming an important factor in driving lithium battery demand growth.

Against this backdrop, in 2025, Tinci Materials continued to focus on R&D of lithium battery materials, integrated layout, and building global supply capabilities. During the reporting period, sales of the company’s core product, electrolyte, grew strongly, with annual sales exceeding 720,000 tons, up about 44% year-over-year. Additionally, the company’s OEM factories in North America and Europe were successfully established and secured local customer orders, achieving a historic leap.

In terms of operating performance, during the reporting period, Tinci Materials achieved revenue of 16.65 billion yuan, up 33%; net profit attributable to shareholders was 1.362 billion yuan, up 181.43%.

Looking at revenue composition, lithium-ion battery materials are the main driver of the company’s growth, accounting for 90.39% of revenue. Driven by rapid market demand growth, the company’s annual production and sales of lithium-ion battery materials reached 1.0671 million tons and 1.0458 million tons, respectively, with revenue of 15.051 billion yuan, an increase of 37.14% year-over-year, and gross profit margin increased by 3.82 percentage points. Regarding pricing, the first three quarters of 2025 saw continued weakness and bottoming out, with a rebound trend in the fourth quarter.

Overall, as market demand continues to grow in 2025, Tinci Materials will continuously convert technological advantages, industrial layout, and supply capacity into growth drivers. The synergy among business segments is evident, supporting the company to maintain steady growth amid a complex and volatile market environment.

For the 2026 operational plan and major business expansion arrangements, Tinci Materials disclosed that to meet the sustained growth of the global lithium battery market, the company will focus on market expansion and technological innovation in electrolyte production; accelerate strategic “positioning” of high-quality lithium resources to hedge price fluctuations; expand downstream customer networks, and improve market penetration of battery-grade lithium carbonate.

Multiple Project Capacities Fall Short of Expectations

At the same time, Tinci Materials disclosed in its annual report the utilization rates and ongoing capacity construction. During the period, the designed capacity for lithium-ion battery materials was 1.3624 million tons, with utilization rates ranging from 42% to 85%, and about 1 million tons of capacity under construction. Compared to industry leaders, the company’s capacity utilization still has some gap.

Currently, the supply-demand landscape of the lithium battery industry chain continues to improve. Since the second half of 2025, capacity utilization across various segments has been rising. According to Dongguan Securities research reports, as of December 2025, the overall capacity utilization of related enterprises in lithium iron phosphate, lithium hexafluorophosphate, and separators exceeded 80%, with leading companies having even higher utilization, some operating at full capacity and full sales.

Tinci Materials’ annual report shows that some projects experienced delays, lower profitability, or slower progress. For example, on December 10, 2025, the company announced a second change to the “Annual Production of 41,000 Tons of Lithium-ion Battery Materials (Phase 1)” project, extending completion to July 31, 2026. Previously, the completion date had been extended to the end of 2024, then to the end of 2025.

In addition to delays in the above project, other investment projects also underperformed in profitability or progress. The 20,000-ton double-fluorosulfonyl imide lithium project and the 62,000-ton electrolyte base materials project were affected by significant market price declines in related lithium battery materials, resulting in overall lower-than-expected profitability for the year. The 60,000-ton daily chemical base materials project (Phase 1) also underperformed due to lower-than-expected market demand and low operating rates.

Cautious Adjustment of Under-Construction Capacity at Year Start

In recent years, rapid growth in lithium battery demand has led to capacity deployment exceeding demand growth, causing significant fluctuations in lithium battery material prices such as electrolytes, which in turn affected listed companies’ performance. Industry players have been reducing costs and mitigating operational risks through technological improvements, process upgrades, and integrated supply chain layouts.

The timing of capacity expansion is particularly critical. Notably, Tinci Materials cautiously adjusted its electrolyte capacity investment plan at the beginning of this year. On January 6, the company announced plans to reduce the original 300,000-ton electrolyte and 100,000-ton battery recycling project to 250,000 tons of electrolyte, and canceled the 100,000-ton battery recycling project. The total investment for the revised plan is no more than 600 million yuan.

Tinci explained that since project initiation, the company has actively promoted progress, but changes in market environment and industry competition have slowed implementation. After re-evaluating the company’s overall product strategy and integrated layout, the company made the above adjustments.

Additionally, on March 10, Tinci announced plans to build a new energy materials industrial park in Yichang, Hubei, through its subsidiary “Hubei Tinci,” including projects for 1 million tons of iron source and 300,000 tons of lithium iron phosphate, with a total investment not exceeding 2.1 billion yuan.

However, based on previous disclosures, the company’s initial plan for a 400,000-ton lithium battery materials and 100,000-ton lithium battery recycling project in Yichang has not yet commenced construction. The company further explained that the original plan was to produce electrolyte and lithium hexafluorophosphate, but after comprehensive assessment of capacity layout and raw material supply, the company concluded that other plants have cost advantages and decided not to proceed with further development of this project.

Regarding the overall supply-demand outlook for industry capacity, Tinci Materials analyzed in its 2025 annual report that in 2026, the domestic electrolyte industry will accelerate deep adjustments and differentiation amid supply-demand imbalance, while global expansion will enter a substantive phase. Despite fierce market competition, leading companies leveraging cost, technology, and customer advantages can maintain high capacity utilization, but the pressure has slowed new capacity expansion, and the overall supply-demand pattern is expected to improve.