Tianshi Materials in 2025: Price Increases Ignite Performance, Q4 Profits Surge 546%, Integration Still Struggles to Break Lithium Battery Cycle

AI Integration Strategy: How Does It Help Tianci Materials Tackle Industry Cycle Fluctuations?

Source | Times Business Research Institute

Author | Chen Jiaxin

Editor | Han Xun

In Q4 2025, the price of lithium hexafluorophosphate surged from 61,000 yuan/ton to 180,000 yuan/ton, triggering a performance boost for the country’s largest electrolyte manufacturer, Tianci Materials (002709.SZ).

On the evening of March 9, Tianci Materials disclosed its 2025 annual report, showing that the company achieved operating revenue of 16.65 billion yuan, up 33% year-over-year; net profit attributable to shareholders was 1.362 billion yuan, a jump of 181.43% year-over-year, ending the downward trend since 2023. In Q4 alone, net profit was 941 million yuan, up 546.39% year-over-year, accounting for nearly 70% of the annual profit.

Tianci’s profit explosion mainly stems from the bottoming and rebound of electrolyte and core raw material prices in the second half of 2025, as well as the results of its full industry chain integration strategy. However, since the beginning of this year, the price of lithium hexafluorophosphate has quickly fallen back to 110,000 yuan/ton, and electrolyte prices have also retreated, leading to renewed industry price fluctuations.

In response, Tianci Materials told Times Business Research Institute that most of its clients engage in long-term contracts, maintaining relatively stable prices during significant fluctuations. The company’s product sales prices in the first quarter of this year remained basically stable.

Even with the advantages of integration, the inherent cyclical fluctuations in the lithium battery materials industry still introduce uncertainties for Tianci’s future profit growth.

Significant Price Surge, Nearly 70% of Annual Profit in Q4

Quarterly analysis shows that Tianci’s net profits attributable to shareholders in 2025 were 150 million yuan, 118 million yuan, 153 million yuan, and 941 million yuan for Q1 through Q4 respectively. The Q4 profit far exceeded the sum of the first three quarters, accounting for 69.1% of the total annual net profit.

This profit concentration is also reflected in a notable increase in gross margin. In Q4 2025, Tianci’s gross margin reached 30.12%, a significant jump from the 16.79%–19.21% range in the previous three quarters.

The core driver of the profit surge in Q4 2025 was the rebound of prices for main products. Since the second half of 2025, the lithium battery materials market has experienced a comprehensive recovery, with prices of electrolyte, lithium iron phosphate, and lithium hexafluorophosphate (a key raw material for electrolytes) rising to varying degrees. Among these, the sharp increase in lithium hexafluorophosphate prices was a key catalyst.

Data from Tonghuashun iFinD shows that lithium hexafluorophosphate prices soared from 61,000 yuan/ton at the end of September 2025 to 180,000 yuan/ton at the end of November—an increase of nearly 200% in two months. Meanwhile, electrolyte (lithium iron phosphate type) prices also recovered from 16,900 yuan/ton at the end of September to 27,800 yuan/ton at the end of December, a 64.5% rise. The price of lithium iron phosphate cathode materials increased more moderately from 33,800 yuan/ton to 45,000 yuan/ton, up 33.1%.

The sharp rise in product prices fundamentally results from supply-demand mismatches, with lithium hexafluorophosphate showing the most prominent performance. On the demand side, 2025 saw explosive growth in the domestic new energy storage market. According to the National Energy Administration, new energy storage installations in 2025 increased by 84% compared to the end of 2024, directly boosting demand for electrolytes and lithium hexafluorophosphate, becoming the core driver of industry recovery. Meanwhile, steady growth in the new energy vehicle sector and increasing power battery installations further amplified demand for lithium materials.

On the supply side, the lithium hexafluorophosphate industry experienced a deep reshuffle, with many small and medium capacities exiting, significantly increasing industry concentration. Coupled with the industry’s previous downturn, cautious new capacity investments led to a supply shortage. The industry exhibits a pattern of “nominal oversupply” alongside “effective scarcity”: despite large total nominal capacity, high-quality capacity capable of stable supply to mainstream battery chains remains tight. New capacity takes a long time from decision to stable supply, unable to respond quickly to price-driven demand, resulting in severe short-term supply-demand mismatches and driving prices sharply higher.

As a leader in the lithium hexafluorophosphate industry, Tianci Materials’ annual capacity reached 110,000 tons in 2025, with a global market share of about 33%, making it one of the main beneficiaries of this price increase.

Full Industry Chain Integration: Expanding with a 2.1 Billion Yuan Expansion Project

In fact, full industry chain integration is not only a key reason for Tianci’s significant profit increase in 2025 but also crucial for maintaining profitability during the industry’s downturn in 2024, avoiding losses.

As one of the earliest companies in China to overcome the technical challenges of lithium hexafluorophosphate production, Tianci established a comprehensive industry chain strategy early on, gradually building a “phosphoric acid—hydrofluoric acid—lithium hexafluorophosphate—electrolyte” complete system. This layout’s core advantage is effectively mitigating operational risks from raw material price fluctuations, reducing production costs, and enhancing profit stability.

Currently, Tianci mainly sells electrolyte and lithium iron phosphate cathode materials externally but has achieved high autonomy over core raw materials. The company has built production capacity for lithium hexafluorophosphate, new electrolytes (LiFSI), additives, and phosphoric acid, with lithium hexafluorophosphate self-sufficiency at 88%. Key additives and solvents are almost fully self-supplied, and over 75% of electrolyte costs come from raw materials, with lithium hexafluorophosphate alone accounting for over half of electrolyte costs.

This self-supply advantage was especially evident in 2025 amid raw material price hikes—while peers faced profit pressure due to soaring external procurement costs, Tianci’s self-produced raw materials allowed it to avoid cost increases and even benefit from rising raw material prices, boosting profits.

Tianci is further expanding its integration strategy. On the day of the annual report release, the company announced plans to establish a new energy materials industrial park in Yaojiagang Chemical Park, ZhiJiang City, Yichang, Hubei, via its subsidiary Hubei Tianci, with a total investment of no more than 2.1 billion yuan. The project will produce 1 million tons of iron source and 300,000 tons of lithium iron phosphate annually—of which 1 million tons of iron source will be for internal use, and 300,000 tons of lithium iron phosphate will be for both internal use and external sales. These are the core raw materials for the company’s lithium iron phosphate cathode materials.

Tianci is also extending its integration upstream into resource acquisition. It has developed lithium-ion battery material recycling, recovering lithium, cobalt, nickel, and other key resources from waste batteries to reduce dependence on primary mineral resources. Additionally, the company is actively exploring lithium resources in key global regions such as Nigeria and Zimbabwe, conducting exploration, strategic procurement, and channel development, and jointly developing mines to secure high-potential resource targets.

However, overseas resource deployment faces significant risks. In recent years, global competition for critical minerals has intensified, with resource-rich countries tightening export policies. Zimbabwe’s policy adjustments are particularly noteworthy. On February 25, 2026, Zimbabwe’s Ministry of Mines announced an early implementation of the lithium concentrate export ban, originally scheduled for January 1, 2027. The ban restricts all mineral and lithium concentrate exports, allowing only companies with valid mining rights and processing plants to apply for export licenses, which could directly impact Tianci’s lithium resource strategy locally.

Furthermore, resource disputes are increasing, such as Tianqi Lithium’s legal challenge against Chilean chemical and mining company SQM and Codelco’s strategic cooperation, ultimately losing the case—highlighting the policy and geopolitical risks in overseas resource development.

Tianci stated to Times Business Research Institute that it is still observing and assessing overseas resource development, considering relevant policy risks comprehensively.

Core Viewpoint: Industry Cycle Fluctuations Cannot Be Fully Avoided by Integration

Undoubtedly, full industry chain integration has been Tianci’s core development strategy for many years and has achieved notable results. In 2024, during the deep downturn of the lithium battery materials industry, prices of electrolyte, lithium hexafluorophosphate, and other products remained low. Despite this, Tianci maintained profitability thanks to its integration layout. In 2025, amid industry recovery and rising product prices, this strategy further amplified profit resilience, leading to a 181.43% YoY increase in net profit attributable to shareholders.

However, it must be recognized that the inherent cyclical nature of the lithium battery materials industry cannot be fully circumvented by integration alone. The industry exhibits strong price correlation effects: the prices of electrolyte, lithium hexafluorophosphate, and lithium iron phosphate tend to move in tandem, often rising or falling together, reflecting high industry cycle consistency.

While integration can reduce costs related to raw material price volatility, it cannot alter the fundamental supply-demand dynamics that drive price cycles, thus cannot completely eliminate profit fluctuations.

This cyclical pattern was evident early in 2026. After the sharp rise in the second half of 2025, lithium hexafluorophosphate prices began to decline. As of March 17, 2026, data from Tonghuashun iFinD shows the price had fallen to 110,000 yuan/ton, nearly 40% below the peak of 180,000 yuan/ton at the end of November 2025.

The price decline reflects a rebalancing of supply and demand. For Tianci, whether profits can stabilize or further recover in 2026 remains uncertain. On one hand, its integrated layout will continue to provide cost advantages, easing profit pressures from falling prices; on the other hand, factors such as product price adjustments, overseas resource risks, and project progress will be key variables influencing profitability.

(Full text: 3009 words)

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