① The lithium concentrate, lithium salt, and lithium battery equipment businesses have been hit hard, causing a double decline in revenue and net profit for Rongjie Corporation in H1. ② In comparison to the industry, the net profit of the company in Q2 has grown at an unusual rate. According to industry analysts who spoke with Cailian Press reporters, this may be due to differences in the company's cross-period confirmation accounting method and other companies. ③ The selection site for the 2.5 million-ton/year Yangyangba lithium mine selection project that the company is concerned about has yet to be determined, resulting in uncertainty regarding project construction and production time.
Cailian News, August 20 (Reporter Zeng Chuchu): The three major lithium products - lithium concentrate, lithium salt, and lithium battery equipment - have been hit hard. Rongjie Corporation (002192.SZ) experienced a double decline in revenue and net profit in the first half of the year, but still maintains profitability. In comparison to the industry, the company's net profit in Q2 grew at an unusual rate. According to industry analysts who spoke with Cailian Press reporters, this may be due to differences in the company's cross-period confirmation accounting method and other companies.
Rongjie Corporation released its 2024 interim report tonight. The company achieved operating income of 0.251 billion yuan in the first half of this year, a year-on-year decrease of 60.54%; net profit attributable to shareholders was 0.166 billion yuan, a year-on-year decrease of 45.09%. Among them, the company achieved operating income of 0.168 billion yuan in Q2, an increase of 104.04% compared to the previous quarter; it achieved a net profit of 0.138 billion yuan belonging to shareholders, an increase of 390.73% compared to the previous quarter.
From the industry companies that have released their half-year reports, it is expected that the upper limit of Q2 net profit growth rate of Salt Lake Shares, Sinomine Resource Group, Jiangxi Special Electric Motor, and Ganfeng Lithium will be less than 50%. Yongxing Special Materials Technology is expected to decline by 24.79% to 48.29% compared to the previous year. Tianqi Lithium Corporation has shown a significant decline in losses compared to the previous year but still remains at a loss. However, Rongjie Corporation's net profit has increased nearly fourfold compared to the previous quarter, which is considered "rare" in the industry. According to industry analysts who spoke with Cailian Press reporters, this may be due to differences in the company's cross-period confirmation accounting method and other companies.
The company stated in the report that in the first half of this year, due to the continuous increase in lithium salt supply and the slowdown in the downstream demand growth rate of lithium battery materials, the sales price of lithium products in the reporting period has decreased significantly compared to the previous year, causing a decrease in the net profit of the company's lithium concentrate products compared to the previous year. At the same time, the profit of the company's affiliated lithium salt enterprise has also decreased significantly compared to the previous year, and the investment income confirmed by the company has significantly decreased. The aforementioned reasons have jointly caused a certain degree of year-on-year decline in the company's operating income and net profit.
It is reported that Rongjie Corporation mainly engages in lithium mining, lithium salt production and processing, and lithium battery equipment manufacturing businesses. The semi-annual report shows that the company's three major products - lithium concentrate, lithium salt, and lithium battery equipment - accounted for 68.80%, 15.87%, and 14.88% of revenue respectively.
Regarding the industry, Rongjie Corporation stated in the report that in the first half of 2024, due to the large inventory reduction of new energy vehicle sales and the slowing growth rate of new energy vehicle sales, the demand growth of lithium carbonate has also slowed down and is significantly lower than the growth of lithium carbonate supply, which has caused the overall lithium salt product prices to remain in a depressed state.
In the first half of this year, the average price of domestic battery-grade lithium carbonate reached a maximum of approximately 0.113 million yuan/ton in mid-March and fell to a minimum of 0.0889 million yuan/ton at the end of June. The overall market average price is approximately 0.1037 million yuan/ton, a decrease of approximately 69% YoY. This downward price trend has greatly squeezed the profit space of lithium salt enterprises.
Affected by the downward cycle of the lithium industry, the price of lithium concentrate has also experienced a depressed period. After entering 2024, the change of overseas mine pricing model has made the trend of lithium ore price changes more closely aligned with the trend of lithium salt price changes. In the first half of the year, the price trend of lithium concentrate was generally consistent with that of lithium salt, showing a general trend of falling first, then rising, and gradually falling back as the production volume on the supply side increased, but it lagged behind the price trend of lithium salt as a whole.
As for lithium battery equipment, Rongjie Corporation stated that due to the slowdown in investment in the lithium battery industry, the company's lithium battery equipment manufacturing business has received fewer orders.
In addition, Rongjie Corporation's location selection for the 2.5 million-ton/year Yangyangba lithium mine selection project, which has attracted industry attention, was previously required to be reevaluated. The semi-annual report shows that the site selection for the company's lithium mine selection project has not yet been determined, resulting in uncertainty regarding project construction and production time.