Wen | Jin Wei

On September 8, Tianci Materials fell sharply at the beginning of the trading. At one point in the trading, it hit the limit. As of the noon closing, Tianci Materials still fell 7.5%, with the stock price at 29.2 yuan and the total market value of 56.2 billion yuan.

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On the last trading day, Tianci Materials fell by 5%, and the largest retreat in two trading days was 14.5%, with the market value shrinking by 7.8 billion yuan.

On September 7, Tianci Materials also released a series of announcements that the company has sufficient orders in hand and is expected to further increase its market share.

What happened to the decline of Tianci Material's share price?

Tianci Materials, whose main business is the research and development, production and sales of new fine chemical materials, is a global leader in electrolyte. The company's lithium hexafluorophosphate market accounts for the second place in the world.

With the outbreak of new energy vehicles, the development of heaven sent materials has entered a fast lane.

The net profits of Tianci Materials in the last three years were 533 million, 2208 million and 5714 million respectively, with year-on-year growth rates of 3165.21%, 314.42% and 158.77% respectively, with an average growth rate of more than 1000%;

In terms of specific revenue, Tianci Materials recorded an average of 12.509 billion yuan and 2.818 billion yuan in the last three years. Last year, it recorded the highest annual profit since its listing, that is, 5.714 billion yuan.

Such a high multiple of growth rate has made the market of Tianci Material ten times bigger.

However, in 2023, the high growth rate of Tianci Materials' performance was broken, and the company's share price kept falling.

In terms of performance, the company's performance fell again in the first half of the year after the company handed over the report card of a 50% year-on-year decline in profits and a 16% decline in revenue in the first quarter.

On the evening of August 14, Tianci released its semi annual performance report, which said that the operating revenue in the first half of 2023 was about 7.987 billion yuan, a year-on-year decrease of 22.93%; The net profit attributable to shareholders of the listed company was about 1.288 billion yuan, a year-on-year decrease of 55.67%;

Tianci Materials said that the supply and demand pattern of the new energy vehicle industry chain changed during the reporting period, and the price of lithium-ion battery electrolyte dropped significantly; At the same time, affected by the inventory of raw materials, the product cost is high, so the overall operating revenue decline is higher than the decline in operating costs.

From the perspective of the whole year last year, in the four quarters of last year, whether the overall profit or the main business profit, the average quarterly profit of Tianci Materials exceeded 1.284 billion yuan, and the single quarterly profit of the first three quarters was about 1.4 billion yuan. Since 2023, the profit of Tianci Materials in a single quarter has not exceeded 1 billion yuan, with a year-on-year decline of about 50%. Such a large decline is indeed rare.

At present, in the revenue structure of Tianci Materials, lithium battery materials account for more than 90% of the revenue, mainly lithium ion battery electrolyte and cathode material lithium iron phosphate, which are key raw materials for lithium batteries.

It can be seen that the price of new energy batteries directly affects the performance trend of heaven sent materials.

On the evening of September 7, Tianci Materials released a series of announcements, saying that the company planned to use self raised funds to invest 272 million yuan in the holding subsidiary Yichang Tianci's 300000 ton iron phosphate project (Phase II). After the additional investment, the total investment of the project changed from 1.005 billion yuan to 1.277 billion yuan. As of the announcement date, the main pile foundation construction of the project has been completed, and the main production equipment has arrived in succession. The equipment installation and commissioning phase has entered, and all work is progressing in an orderly manner.

In addition, according to the disclosure of Tianci Materials on September 7, when receiving a site visit, the company said that at present, the number of orders in hand is sufficient. As the leading enterprise in the industry, with excellent cost control ability, the market share of the company's electrolyte has continued to increase this year. With the further decrease of the cost of electrolyte, the company expects that the market share will further increase.

However, it seems that the market is not satisfied with the benefits of additional investment and sufficient orders, and the share price of Tianci Materials fell.

It is worth mentioning that the 2023 Mid term Report shows that there are 705 major holding institutions, accounting for 35.5% of the total, most of which are public funds. According to the decline since the second quarter of this year, most of these new public funds are covered.

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