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Shares of the leading lithium producer rose after the company announced that its net profit likely surged up to 43 times in the first quarter of the year. This remarkable increase was driven by higher investment income, soaring lithium product prices, and the overall growth of the new energy sector.
As of 1:05 p.m. in Shenzhen, the company’s stock jumped 5.5% to CNY70.47 ($10.34) per share. Its counterpart listed in Hong Kong gained 2.3%, trading at HKD59.60 ($7.61).
The firm projected its net profit for the first quarter to have leapt between 35 and 43 times, reaching roughly CNY1.7 billion to CNY2 billion ($249.3 million to $293.4 million). The announcement came from its headquarters in Chengdu.
The company also anticipated a substantial rise in investment income from its principal associate, Sociedad Química y Minera de Chile. This expectation is based on Bloomberg’s earnings forecasts for the South American chemical giant, which partially owns rights to develop the Atacama Salt Flat, one of the world’s largest lithium salt deposits, even though SQM has yet to release its Q1 financials.
Meanwhile, lithium product prices have increased sharply since the start of the year. For instance, the price of battery-grade lithium carbonate peaked at over CNY170,000 ($24,935) per ton, compared to around CNY119,000 per ton in early January, and remained around CNY150,000 last month.
Chengxin Lithium Group previously reported that the average price of battery-grade lithium carbonate was CNY75,500 ($11,075) per ton last year, noting a decline in prices during the first half of the year before rebounding later.
Founded in 1995, this company focuses on producing new energy materials centered around lithium. Its core operations span critical stages of the lithium supply chain, including exploring hard-rock lithium resources, manufacturing and selling lithium concentrate, and producing lithium chemical products.
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