Lithium battery materials drive performance growth; Tianci Materials' multiple production capacities fall short of expectations

(Source: Economic Reference Daily)

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

In terms of shareholder returns, Tinci Materials plans to distribute a cash dividend of 3 yuan (including tax) for every 10 shares to all shareholders (excluding the repurchase special account) for the fiscal year 2025, with a total estimated dividend of 608 million yuan, which includes a special dividend of 1 yuan per 10 shares.

Lithium materials drive performance growth

Tinci Materials was established in June 2000, with its core business focused on lithium-ion battery materials and two major segments: daily chemical materials and specialty chemicals. From the perspective of the market environment, the downstream applications of lithium battery materials are lithium-ion battery products, which are widely used in power, energy storage, and consumer electronics. Among them, the development of the new energy vehicle industry is the main driving force for the development of the lithium-ion battery and its upstream materials industry. In recent years, the demand in the energy storage sector has accelerated, becoming an important factor driving the growth of lithium battery demand.

Against this backdrop, in 2025, Tinci Materials continued to focus on the research and development of lithium battery materials, integrated layout, and the construction of global supply capabilities. During the reporting period, the sales volume of the company’s core product, electrolytes, grew strongly, with annual sales exceeding 720,000 tons, a year-on-year increase of approximately 44%. In addition, the company successfully established its North America and Europe OEM (Original Equipment Manufacturer) factories and received local customer orders, achieving a historic leap.

In terms of operating performance, during the reporting period, Tinci Materials achieved operating revenue of 16.65 billion yuan, a year-on-year increase of 33%; the net profit attributable to shareholders reached 1.362 billion yuan, a year-on-year increase of 181.43%.

From the revenue composition, lithium-ion battery materials are the core driving factor behind the company’s performance growth, accounting for 90.39% of revenue. Driven by the rapid growth in market demand, the annual production and sales volume of the company’s lithium-ion battery materials reached 1.0671 million tons and 1.0458 million tons, respectively, achieving operating revenue of 15.051 billion yuan during the reporting period, a year-on-year increase of 37.14%, with a gross profit margin increasing by 3.82 percentage points year-on-year. In terms of pricing, the product prices continued to decline and hit the bottom in the first three quarters of 2025, showing a recovery trend in the fourth quarter.

Overall, with the continuous growth of market demand in 2025, Tinci Materials will continuously transform its technological advantages, industrial layout, and supply capabilities into driving forces for performance growth, with significant synergy effects across various business segments, supporting the company to maintain a steady growth trend in a complex and changing market environment.

Regarding the operating plan and major business expansion arrangements for 2026, Tinci Materials disclosed that to respond to the continuous growth of global lithium battery market demand, the company will focus on dual-wheel drive of market expansion and technological innovation in the field of lithium battery electrolytes; at the same time, it will accelerate the strategic “positioning” of quality lithium resource projects to hedge against price volatility risks; expand the downstream customer network to improve the market penetration of battery-grade lithium carbonate.

Capacity construction of multiple projects falls short of expectations

At the same time, Tinci Materials disclosed in the annual report the capacity utilization and current capacity situation. During the reporting period, the company’s designed capacity for lithium-ion battery materials was 1.3624 million tons, with a capacity utilization rate of 42% to 85%, and the construction capacity was approximately 1 million tons. Compared with leading companies in the industry, the company’s capacity utilization rate still shows a certain gap.

Currently, the supply and demand pattern of the lithium battery industry chain continues to improve. Since the second half of 2025, the capacity utilization rates of various links in the industry chain have shown an upward trend. Dongguan Securities’ research report pointed out that by December 2025, the overall capacity utilization rates of enterprises related to lithium iron phosphate, lithium hexafluorophosphate, and separators all exceeded 80%, with leading enterprises having even higher capacity utilization rates, and some enterprises were even in a state of full production and sales.

Tinci Materials’ annual report disclosed that during the reporting period, some projects experienced delays, and profitability or progress did not meet expectations. Among them, on December 10, 2025, the company announced a second change to the “Annual Production of 41,000 Tons of Lithium-Ion Battery Materials Project (Phase I),” extending the project’s completion time to July 31, 2026. Previously, the company had already extended the project’s completion time to the end of 2025 in March 2024.

In addition to the above project delays, the company also faces situations where investment project profitability or progress is not as expected. Among them, the annual production of 20,000 tons of lithium bis(fluorosulfonyl)imide project and the annual production of 62,000 tons of electrolyte base material project have been affected by the significant decline in market prices of related lithium battery materials, leading to overall profitability falling short of expectations; and the annual production of 60,000 tons of daily chemical base material project (Phase I) has a low startup rate due to market demand falling short of expectations, resulting in profitability not meeting expectations.

Cautious adjustment of construction capacity at the beginning of the year

In recent years, the rapid development of demand in the lithium battery industry has led to a growth rate of capacity investment in the industry chain exceeding that of demand, resulting in significant price fluctuations in electrolytes and other lithium battery materials, which in turn affects the performance of listed companies. Enterprises in the industry have continuously introduced new products through technological improvements, process enhancements, and integrated layouts along the industry chain to reduce product costs and mitigate operational risks brought by price fluctuations.

Among them, the timing of capacity investment is particularly crucial. The reporter noted that Tinci Materials cautiously adjusted its capacity investment plan for lithium battery electrolytes at the beginning of this year. On January 6, the company announced that it planned to adjust its original plan of 300,000 tons of electrolytes and 100,000 tons of battery dismantling and recycling projects to a new plan of 250,000 tons of electrolytes, while canceling the construction plan for the 100,000 tons of battery dismantling and recycling project. After the adjustment, the total investment in the project will not exceed 600 million yuan.

Tinci Materials explained that since the project’s establishment, the company has actively promoted various work, but due to changes in the market environment and industry competition landscape during the construction period, the implementation progress of the project has slowed. After careful consideration, the company made the above adjustments based on its overall product strategic planning and integrated construction layout reassessment.

In addition, on March 10, Tinci Materials announced that according to the company’s development strategic planning in the field of lithium-ion battery materials, it plans to build a new energy materials industrial park in Yichang, Hubei through its subsidiary “Hubei Tinci,” which will include an annual production of 1 million tons of iron source and 300,000 tons of iron phosphate project, with a total investment expected to not exceed 2.1 billion yuan.

However, based on the information previously disclosed by the company, Hubei Tinci originally planned to conduct preliminary preparations for an annual production of 400,000 tons of lithium battery materials and a 100,000-ton lithium battery recycling project, but as of now, the project has not commenced construction investment. The company further introduced that the project was originally planned to produce electrolytes and lithium hexafluorophosphate and other materials in Yichang, but after the company conducted a comprehensive assessment of capacity layout planning and raw material supply matching, it was determined that other factories in the group have a comparative cost advantage, and the company decided not to proceed with further construction of that project.

Regarding the overall supply and demand pattern of industry capacity, Tinci Materials analyzed in its 2025 annual report that in 2026, the domestic electrolyte industry will accelerate deep adjustments and differentiation against the backdrop of supply and demand imbalance, while global layout enters a substantial landing stage. Currently, market competition is fierce, but leading enterprises can still maintain high capacity utilization rates due to their advantages in cost, technology, and customers. The survival pressure has also significantly slowed the pace of new capacity expansion in the industry, and the overall supply and demand pattern is expected to improve.

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