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 a 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%.

In terms of 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, daily chemical products, and specialty chemicals. From the market 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 growth for lithium-ion batteries and their upstream materials. In recent years, demand in the energy storage sector has accelerated, becoming an important factor fueling the growth of lithium battery demand.

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, the company’s core product—electrolyte—sold more than 720,000 tons, a strong increase of 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.

Operationally, during the reporting period, Tinci Materials achieved revenue of 16.65 billion yuan, up 33% year-over-year; 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 total 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. During the period, revenue from these materials was 15.051 billion yuan, an increase of 37.14% year-over-year, with gross profit margin increasing by 3.82 percentage points. Regarding pricing, the prices of these products continued to weaken in the first three quarters of 2025, hitting a bottom, but showed signs of recovery in the fourth quarter.

Overall, as market demand continued to grow in 2025, Tinci Materials leveraged its technological advantages, industrial layout, and supply capacity to continuously convert into performance growth. The synergy among various business segments was evident, supporting the company’s 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 in global lithium battery demand, 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.

Capacity Construction Projects Fall Short of Expectations

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

Currently, the supply and 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. Dongguan Securities research reports indicate that as of December 2025, the overall capacity utilization rates of related companies in lithium iron phosphate, lithium hexafluorophosphate, and separators exceeded 80%, with leading companies having even higher utilization rates, some operating at full capacity and sales.

Tinci Materials’ annual report shows that some projects experienced delays, profitability issues, or slower progress than expected. 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 I)” 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 faced profitability or progress shortfalls. The 20,000-ton double-fluorosulfonylamide lithium project and the 62,000-ton electrolyte base materials project were impacted by significant market price declines in lithium battery materials, resulting in overall lower-than-expected profitability. The 60,000-ton daily chemical base materials project (Phase I) also underperformed due to lower 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 overinvestment in the industry chain, causing significant price fluctuations in electrolyte and other lithium materials, which in turn affected listed companies’ performance. Industry players have responded by improving technology, optimizing processes, and expanding integrated supply chains to reduce costs and mitigate operational risks caused by price volatility.

The timing of capacity investments is particularly critical. Notably, at the beginning of this year, Tinci Materials cautiously adjusted its capacity investment plan for lithium battery electrolytes. On January 6, the company announced plans to reduce the original 300,000-ton electrolyte and 100,000-ton battery recycling projects to 250,000 tons of electrolyte, and canceled the 100,000-ton battery recycling project. The total investment for the revised plan would not exceed 600 million yuan.

Tinci explained that since project initiation, the company has actively promoted various work, but changes in market environment and industry competition have slowed progress. After re-evaluating its overall product strategy and integrated layout, the company made the cautious decision to adjust the plan.

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

However, based on previous disclosures, the original plan for the Yichang project included a 400,000-ton lithium battery materials and 100,000-ton lithium battery recycling project, but no construction investments have been made so far. The company further explained that the original plan was to produce electrolyte and lithium hexafluorophosphate in Yichang, but after comprehensive assessment of capacity layout and raw material supply, the company concluded that other factories had more cost advantages and decided not to proceed with further construction 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 undergo accelerated deep adjustments and differentiation amid supply-demand imbalance, while global expansion will enter a substantive phase. Despite fierce market competition, leading companies with cost, technology, and customer advantages can maintain high capacity utilization, but the pressure has slowed new capacity expansion, and the overall supply-demand situation is expected to improve.