2011-to date, it has completed the merger and acquisition of high-quality lithium ore and salt lake resources in the world, establishing its leading position in lithium resources: In 2014, the company completed the acquisition of 20% of the equity of Tibet Zabuye, and in the same

1.1 Strategic mergers and acquisitions master global high-quality lithium resources, H-share listing starts a new journey

Tianqi Lithium predecessor Shehong Lithium was built in 1992. With the listing of the Shenzhen Stock Exchange in August 2010 as a node, it mainly went through two development stages: 1992-2010 After the reform was completed, it completed the listing of the company, and the company gradually transformed into a listed company with standardized governance.

2011-To date, the global high-quality lithium ore and salt lake resources merger and acquisition have established the leading position of lithium resources: In 2014, the company completed the acquisition of 20% of the equity of Tibet Zabuye, and in the same year, the world's largest high-grade lithium ore Greenbushes acquired SQM's 23.77% Class A shares in 2018, becoming its second largest shareholder, and obtained investment income from Atacama Salt Lake, establishing Tianqi Lithium's leading position in the global lithium resources; from 2019 to 2020, the company experienced a short-term debt crisis through the introduction of strategic investors IGO, and obtained 1.4 billion US dollars of new capital. In 2022, the company completed the listing of H shares 130.6 HK$100 million, mainly used to repay the remaining M&A loan balance and lift the debt crisis.

1.2 Holds high-quality lithium resources of "Two Lakes and Three Mines", and the equity resources reach 15.47 million tons LCE

The actual controller of the company is Jiang Weiping , and its "Two Lakes and Three Mines" has a total equity lithium resources of 15.47 million tons LCE. Tianqi Industrial holds a shareholding ratio of 28.18% as the controlling shareholder, and Chairman Jiang Weiping holds 90% of the equity of Tianqi Industrial; the company's lithium resources mainly include 3 spodumene mines + 2 salt lake resources, of which Greenbuhses, Atacama and Zabuye are three in-production projects, Yajiang Chopra is the company's domestic spodumene resource reserve, and the preliminary work has been planned. Mt Holland is a high-quality Australian spodumene resource under SQM, and plans a production capacity of 50,000 tons of lithium hydroxide ; through the form of participation in controlling shares, the company's equity lithium resources reaches 15.47 million tons of LCE.

1.3 Greenbushes Production expansion has accelerated, and the integration of "resources + smelting" has significant advantages.

The company's existing production capacity at the smelting end is 69,000 tons, and the planned 110,000 tons on the resource end is 1.62 million tons of lithium concentrate production capacity, and the future plan is 2.66 million tons (the world's number one).

Upstream resources: Greenbushes provides sufficient resource guarantee for the world's largest mine in production. With the completion of construction of TRP (tailings treatment plant, 280,000 tons) in the first quarter, the total production capacity of Greenbushes lithium concentrate reached 1.62 million tons; CGP3 (520,000 tons) has been started this year and will be put into production in 2025. CGP4 (520,000 tons) is planned to start in 2025, with a long-term planned production capacity of 2.66 million tons; currently the mining capacity is underwritten by Tianqi Lithium & Yabao respectively, which is the main source of spodumene concentrate for the two major shareholders.

Zhongyou lithium salt : quinana Phase I project is put into production, and lithium salt production capacity is released at an accelerated pace. At present, the company mainly conducts smelting and processing business through four major production bases in Sichuan Shehong, Jiangsu Zhangjiagang, Chongqing Tongliang and Australia Kuinana, with a total lithium salt production capacity of 69,000 tons; in terms of future planning, the first phase of the Australian Kuinana Phase I project has begun to deliver samples and climb production, and the main project of the second phase has been completed, and the subsequent production progress will be smoother; the 20,000-ton battery-grade lithium carbonate project in Suining Anju is expected to be completed in 2023; the Tongliang base plans to expand the 2,000-ton metal lithium project in two phases, and the 800-ton Phase I will be completed and put into production in 2023, and the 1,200-ton Phase II will be completed and put into production in 2025. The planned lithium salt production capacity in the future will reach more than 110,000 tons.

1.4 Recovery of demand and the debt crisis has been lifted, the company's operating performance has returned to normal

2021 The company's lithium salt product production and sales have returned to normal levels, and the increase in new capacity of lithium concentrate has been significantly increased. In 2020, affected by the epidemic, the company's lithium salt and lithium concentrate production fell by 13%/24% year-on-year respectively; in 2021, with the recovery of downstream demand, the company produced 43,700 tons of lithium salt products, an increase of 15% year-on-year, the same as in 2019; in terms of lithium concentrate, Greenbushes added 600,000 tons of production capacity in 2021, and the total lithium concentrate production capacity increased to 1.34 million tons/year, and the lithium concentrate production output increased by 64% year-on-year to 954,000 tons.

is subject to debt mergers and acquisitions and the lithium industry is in a downward trend, and the company suffered losses for two consecutive years from 2019 to 2020. From 2019 to 2020, the decline in subsidies for new energy vehicles caused a sluggish demand, and the lithium industry's prosperity declined. The company's net profit attributable to shareholders fell by 372% year-on-year to -5.983 billion yuan. First, the company's acquisition of SQM equity formed US$3.5 billion in merger and acquisition loans caused 1.65 billion yuan in interest expenses, and the financial expenses increased by 3.3 times year-on-year to 2.028 billion yuan; second, the price of SQM lithium products fell by the cold winter of the industry, and the company made an impairment preparation of 5.353 billion yuan in SQM's long-term equity investment in . In 2020, due to the continued downward trend in debt expenses and the continued decline in the industry, the company's net profit attributable to shareholders was still negative. In 2021, the company's debt crisis was lifted and lithium prices rose, and the net profit attributable to shareholders turned positive, and various financial indicators improved. Since Q4 2020, with the implementation of syndicated merger and acquisition loan extensions and the introduction of strategic investors IGO transactions, the company's debt crisis has been lifted. In addition, the gradual recovery of the lithium industry has brought about an increase in lithium prices, the company's revenue and gross profit have grown simultaneously, and the net profit and net profit have returned to positive. In 2021, revenue was 7.663 billion yuan, a year-on-year increase of 136.56%; net profit attributable to shareholders was 2.079 billion yuan, a year-on-year increase of 213.37%; in 2022H1, revenue was 14.3 billion yuan, a year-on-year increase of 508%, and net profit attributable to shareholders was 10.3 billion yuan, a year-on-year increase of 119 times.

1.5 SQM mergers and acquisitions have brought US$3.5 billion in debt, and the debt pressure on H-share listing has been successfully lifted

In order to complete the SQM Class A equity transaction, the company has raised a total of US$3.5 billion through debt financing, and financial expenses have increased significantly since 2019. In May 2018, Tianqi Lithium established two wholly-owned subsidiaries TLAI1 and TLAI2, registered in Australia, to complete equity transactions. On November 29, 2018, a syndicated led by CITIC Bank (International) Co., Ltd. provided a US$1 billion overseas syndicated loan to its wholly-owned subsidiary TLAI2 (SPV2), and a syndicated loan led by CITIC Bank Chengdu Co., Ltd. provided a US$2.5 billion domestic syndicated loan to its wholly-owned subsidiary TLAI1 (SPV1). Large-scale debt borrowing has led to a significant increase in the company's financial pressure. In 2019, financial expenses increased by 331% year-on-year to 2.03 billion yuan. Coupled with the overall decline in lithium industry, the company's operations were seriously affected.

By selling 49% of the equity of its wholly-owned subsidiary TLEA after the increase in capital, Tianqi obtained 1.4 billion US dollars of new capital in IGO, resolving debt pressure of US$1.2 billion. In 2020, due to the debt crisis left by the huge acquisition of SQM, TLEA, a wholly-owned subsidiary of Tianqi Lithium, introduced an Australian listed company IGO. As a strategic investor, IGO invested US$1.4 billion in cash and subscribed US$304 million in TLEA's new registered capital, and held 49% of TLEA's registered capital after the capital increase was completed. The funds obtained from TLEA's capital increase are intended to repay the principal of US$1.2 billion and related interest of the syndicated merger loan; the remaining funds will be reserved for TLEA as supplementary funds for the operation and commissioning of the Quinana Lithium Hydroxide Factory, which belongs to its subsidiary TLK. After the capital increase is completed, IGO owns 49% of TLEA's equity.

Thanks to the recovery of lithium prices, H shares were successfully listed and the company's debt coverage was officially lifted. In July 2022, the company officially completed its H-share IPO, with a net fundraising of HK$13 billion, and plans to use HK$8.86 billion to repay the balance of SQM M&A loans, and build the first phase of Suining Anju project of HK$1.17 billion. By the end of July, the company had repaid all principal interest on the M&A loan, and the debt-to-asset ratio decreased to about 28% (unaudited). Since the second half of 2021, the company's debt-to-asset ratio has continued to decline, and the asset-to-liability structure has effectively improved. By the end of 2020, the company's debt-to-asset ratio exceeded 80%. In July 2021, the company repaid the principal of the syndicated merger loan of US$1.2 billion and the corresponding interest after completing the IGO transaction. Thanks to the recovery of lithium prices, the company's own operating cash flow continued to improve, and the company's "blood-making" function and debt repayment ability continued to enhance. The company actively and early repayment of the syndicated merger loan of US$515 million and domestic debt of RMB529 million. The company's debt-to-asset ratio dropped to about 58.9% by the end of 2021. As of the release of the 2022 interim report, the company's debt-to-asset ratio has dropped to 46%.

2. Global layout of resource map, lithium mine has significant low-cost advantages

2.1 Greenbushes: Western Australia high-grade spodumene deposit, Tianqi Lithium Industry and Yabao strategic high-quality resources

Greenbushes is the world's largest spodumene deposit in production, with 13.83 million tons of LCE high-grade lithium resources. Greenbushes is operated by Telison, a joint venture subsidiary of Tianqi Lithium and Yabao. In terms of geographical transportation, the mine is located about 250 kilometers south of Perth Port, Western Australia and 90 kilometers from Bunbury, the main bulk loading and unloading port in southwestern Western Australia. Mine There is complete road coverage from mountain to port, and the traffic conditions are good. In terms of resources, the mine is an open-pit deposit of pegmatite . According to the updated resource volume report in August 2021, the mine has 13.83 million tons of lithium resources (ranked first in mine production and second in all mines), and the grade of lithium oxide is 1.6% (ranked second in mine production and fourth in the world), and the resource volume and grade among major mines in the world are both top-notch.

Greenbushes was once an important source of lithium concentrate supply in my country. Tianqi Lithium took the first step to achieve the resource monopoly of Chinese-funded enterprises in breaking overseas giants. The mine has begun resource exploration since the 1980s and was acquired by Talison in 2007. In 2013, in order to break the monopoly of lithium mine giants such as SQM, Rockwood, and FMC in upstream resources, Tianqi Group spent 3.68 billion yuan to complete the 100% equity acquisition of Talison through its wholly-owned subsidiary Windfield. At that time, the lithium concentrate produced by Greenbushes was an important source of imports in China. In 2014, Tianqi Lithium raised a net amount of 3.02 billion yuan through a private placement, and acquired 51% of the equity of Wenfield held by Tianqi Group, with a transaction price of 3.04 billion yuan. Rookwood acquired 49% of the equity of Windfield as an industry investor. In 2015, Albemarle completed the acquisition of all equity of Rookwood. In order to resolve the debt crisis, in 2020, the strategic investment IGO was introduced by selling 49% of TLEA's equity, and Tianqi's shareholding ratio fell to 51%. Greenbushes expects to add 280,000 tons of concentrate capacity this year, and the forward planning is 2.66 million tons of concentrate capacity. With the completion of the CGP2 (600,000 tons) project in May 2021, Greenbushes' lithium concentrate production capacity has increased to 1.2 million tons of chemical grade + 140,000 tons of technical grade. According to the IGO announcement, Greenbushes plans to build three more ore dressing plants in the future, of which the tailings treatment plant (TRP) was put into production in the first quarter of 2022, adding 280,000 tons of concentrate production capacity; CGP3 (520,000 tons) started construction in March 2022 and put into production in 2025, and CGP4 (520,000 tons) is planned to start construction in 2025, with a long-term planned production capacity of 2.66 million tons, equivalent to 330,000 tons of LCE, which is expected to maintain its position as the world's largest mine. According to Windfield's "Shareholder Agreement", the two major shareholders Tianqi Lithium Industry and Yabao are underwritten by 50% of the mine's lithium concentrate.

2.2 SQM: South America chemical giant, its resource territory has expanded from South America to Australia

2.2.1 Based on the two core resources of Chile , it realizes closed-loop production of multi-element compounds

SQM started the development of Atacama salt lake resources in the 1990s, and plans for the dual-wheel drive of "salt lake + hard rock lithium mine" in the future. SQM was established in 1968 by Anglo Lautaro and Chilean Economic Development Bureau. Three years after its establishment, Anglo Lataro sold its shares to CORFO. In 1983, SQM began the privatization process and was listed on the Santiago Exchange. In 1993, the company issued depositary receipt (ADS) on on . In the second half of the 1990s, the company began the development of Atacama Salt Lake lithium and potassium resources, and later built the Carmen lithium carbonate processing plant in 2005. Since then, it has undergone multiple rounds of production expansion. By the end of 2022, the company will have a lithium carbonate production capacity of 180,000 tons and a supporting lithium hydroxide production capacity of 21,500 tons; in addition, the company 2017 The annual external acquisition of 50% of the Australian Mt Holland Lithium Mine will start the layout of hard rock lithium mines, and it is planned to invest 50,000 tons of integrated lithium hydroxide production capacity in 2024.

The company's domestic mineral resources are distributed in Atacama Salt Lake and Caliche deposits, achieving closed-loop production of potassium, lithium, nitrate and iodine. SQM is a chemical enterprise specializing in the production and sale of lithium, special plant nutritional fertilizers, iodine, potassium fertilizers, and industrial chemicals.Atacama Salt Lake mainly produces potassium chloride and lithium-containing brine. Potassium chloride is directly produced in the salt field. Lithium-containing brine is transported to the Carmen factory for further extraction to produce lithium carbonate and lithium hydroxide products. The Caliche deposit located in northern Chile is the only commercially mined natural nitrate deposit in the world. Maria Elena, Nueva Victoria and Pampa Blanca can produce nitrate and iodine-containing solutions and transport them to the Coya Sur factory for the production of nitrate ( sodium nitrate , potassium nitrate ) and iodine products. The potassium element in potassium nitrate comes from the potassium chloride products produced by Atacama, thereby achieving closed-loop production of raw materials.

The company's equity structure is concentrated, and Pampa Group and Tianqi Lithium are the top two shareholders of the company. The equity composition of SQM includes Class A shares and Class B shares, accounting for 50% of each. Class A shares are common shares, and Class B shares enjoy the same right to earn, but only one shareholder can be selected. In order to improve the company's resource-side layout strategy, Tianqi Lithium completed the acquisition of 2.1% Class B shares and 23.77% Class A shares in 2016 and 2018, respectively, and achieved a total of 25.86% of SQM shares, with a total transaction consideration of US$4.276 billion. In 2021, the company gave up the priority subscription rights for SQM financing, resulting in the dilution of equity to 23.75%. In 2022, the delivery of Class B shares pledged by the Grade Options was completed (5.52 million shares fell to 750,000 shares). The company currently holds a total share of SQM shares of 22.16%.

The company plans to increase the Atacama Salt Lake production capacity to 180,000 tons of lithium carbonate + 30,000 tons of lithium hydroxide within the year, and to 210,000 tons of lithium carbonate + 40,000 tons of lithium hydroxide in 2023. Mt Holland plans to add 50,000 tons of lithium hydroxide production capacity. As of the end of 2021, the company's Atacama Salt Lake has a lithium carbonate production capacity of 120,000 tons/year and a lithium hydroxide production capacity of 21,500 tons/year (lithium hydroxide is produced by caustic lithium carbonate). The lithium salt production increased from 45,000 tons in 2019 to 101,000 tons, and the company's production guidance in 2022 is 145,000 tons. The lithium business is the focus of the company's subsequent capital expenditure. Among them, Atacama Salt Lake plans to form 210,000 tons of lithium carbonate + 40,000 tons of lithium hydroxide production capacity by 2023, with a total capital expenditure of approximately US$250 million. The Mt Holland lithium mine plans to form 50,000 tons of lithium hydroxide production capacity by 2024, with a total capital expenditure of approximately US$700 million (50% equity). In addition, the company has an iodine capacity of 14,500 tons/year, an sodium nitrate production capacity of 1.3 million tons/year, and a potassium chloride production capacity of 2 million tons/year. It is planned to add 25,000 tons/year to an iodine capacity by 2024.

Company has a mining quota of approximately 2.206 million tons of LCE, and its resources and grades rank among the top in the world. Atacama Salt Lake is located in the Antofagasta area of ​​northern Chile in the South American lithium triangular area. The salt lake is about 100 kilometers long, about 80 kilometers wide and about 2,300 meters above sea level (very ideal). SQM's direct supply company SQM Solar and the Chilean Economic Development Agency (CORFO) signed a mining area lease agreement in 1993 and revised it in 2018. Before December 31, 2030, the company's quota for lithium resources can be mined is 2.206 million tons of LCE. According to Tianqi Lithium's "Major Asset Purchase Report" SQM conducted geological exploration, brine sampling and geological statistical analysis within 81,920 hectares covered by its exploration permit. As of 2017, the mining area had lithium reserves of 43.45 million tons (the Investor Relations Activity Record Table disclosed was 45.51 million tons LCE), with a concentration of more than 1500mg/L, and its resources and grade ranks among the top in the world (Uyuni has high resources but low grade).

SQM Use traditional solar cell precipitation method to produce potassium chloride, lithium carbonate and lithium hydroxide. First, the brine was pumped into the evaporation tank from a depth of 15-150 meters underground at Atacama. After three evaporation and concentration, the sodium chloride , sodium potassium mixed salt, and magnesium salt were crystallized in turn. The sodium potassium mixed salt was used to produce potassium fertilizers. The evaporated solution was pumped into another evaporation tank to continue to evaporate and remove impurities such as calcium, potassium, sodium, magnesium, etc., and the solution was concentrated to a lithium-containing concentration of 5-6%. Then it was transported to the company's Carmen Lithium Carbonate & Lithium Hydroxide Processing Plant in Antofafasta, where lithium hydroxide was produced after lithium carbonate production and lime solution.

2.2.2 Mt Holland: Australia's giant mine to be developed, with a planned production capacity of 50,000 tons of lithium hydroxide

Mt Holland has a lithium resource of 7.01 million tons, making it the third largest mine in Australia.The mine is located in the Goldfields region of Western Australia, about 450 kilometers from the port city of Perth. The project's lithium concentrate will be transported to the Kwinana factory for processing as lithium hydroxide, which is located in the Kwinana Industrial Zone, 35 kilometers south of the central business district of Quinana Perth, Western Australia, and adjacent to the Kiwnana battery-grade lithium hydroxide factory of Tianqi Lithium. According to the pre-feasibility study report released in 2018, the mine has a resource of 7.011 million t LCE (the third largest in Australia), with a lithium oxide grade of 1.5%.

Mining project is jointly held by SQM and Wesfarmers, each holding 50% of the shares. In 2016, Kidman gained ownership of the Mt Holland lithium mine project. In 2017, SQM acquired 50% of the project and jointly established -owned company Covalent Lithium with Kidman, and was responsible for the development and operation of mines and lithium hydroxide smelters. In October 2019, Wesfarmers acquired all shares of Kidman and jointly developed a lithium mine project with SQM. Currently, SQM and Wesfarmers each own 50% of the Mt Holland project.

2.3 Zabuye: a pioneer in the lithium extraction of Tibet's salt lake, Baowu empowers to open up a new pattern of resource development

Zabuye Salt Lake has a lithium resource of 1.79 million tLCE, and Tibet Mining has the exclusive mining rights of Zabuye Salt Lake. Zabuye Salt Lake is located in Zhongba County, Shigatse City, Tibet Autonomous Region, with an altitude of 4422 meters and an area of ​​247km2. According to the November 2021 resource reserve verification report, the salt lake has a lithium resource of 1.788 million tons, an associated KCl resource of 15.925 million tons, a B2O3 of 9.629 million tons, a Cs (cesium) of 1559.0 tons, and a Rb (rubidium) of 4567.6 tons. Currently, the traffic conditions in the area where the salt lake is located are good. Zabuye Salt Lake is only 741 kilometers away from Shigatse City, and asphalt roads have been paved.

On June 29, 2020, the People's Government of Tibet Autonomous Region decided to restructure the Tibet Mining Corporation of the Tibet State-owned Assets Supervision and Administration Commission, and at the same time, the Mining Corporation will increase capital and expand shares by China Baowu , Shigatse Urban Investment, and Zhongba County Maquanhe Investment. After the reform is completed, the legal representative of the company is Zeng Tai, the actual controller of the company becomes , the State-owned Assets Supervision and Administration Commission of the State Council, and the largest shareholder is Tibet Mining Assets Company. China Baowu and its joint actor Shigatse Urban Investment will hold a total of 52% of the equity of the Mining Corporation after the completion of the reform and capital increase and expansion, and can control it.

is a strategic investor to introduce strategic investors. In 2010, Tibet Mining and Mining Development Corporation transferred a total of 22% of the equity held in Tibet Zabuye to BYD Co., Ltd. and Tibet Jinhao Investment Co., Ltd. for 246 million yuan respectively. In 2014, Tibet Mining Corporation transferred its 20% stake in Shigatse Zabuye, Tibet at a transaction price of RMB 311 million to Tianqi Lithium. Tianqi Lithium's statements were used as an associate enterprise to perform equity method accounting.

Five-year strategic plan is implemented, and the construction of 10,000 tons of lithium hydroxide + the second 10,000 tons of battery-grade lithium carbonate project is put on the agenda to ensure the effective implementation of the development plan.

Long-term investment projects: From 2021 to 2024, there will be 5 long-term investment projects with a total planned investment of 970 million yuan. 1) Salt Lake: The Tibetan salt lake resource integration plan will be launched in 2023. It is planned to comprehensively sort out the distribution of salt lake resources, form a special report, and lock in 1-2 resource targets; in addition, Tibet Mining will also improve the layout of Zabuye's industrial chain and develop the salt lake lithium extraction process to provide support for the transformation of resource advantages. 2) chromium ore : Relying on its resource advantages and the coordinated advantages of Baowu Steel Industry, Tibet Mining restarts the development plan for high-carbon ferrochromium and plans to deploy high-carbon ferrochromium processing capacity in Inner Mongolia.

Fixed asset investment projects: From 2021 to 2025, there were 7 fixed asset investment projects with a total planned investment of 6.151 billion yuan. 1) New 30,000 tons + lithium salt projects: Among them, 2 billion yuan will be planned to build a 10,000 tons battery-grade lithium carbonate production line (9,600 tons of electric carbon + 2,400 tons of industrial carbon) from 2023 to 2025. The planned investment will be 2 billion yuan respectively to build a 10,000 tons lithium hydroxide + the second 10,000 tons battery-grade lithium carbonate project. The total lithium salt production capacity of Tibet Mining will reach 38,000 tons (12,000 tons of Zabuye Phase II + 20,000 tons of new plan + 6,000 tons of lithium concentrate (equivalent to LCE). 2) Chromium iron ore planning will increase the production capacity to 200,000 tons by 2023.After the technical transformation of

lithium concentrate output has increased significantly, and the annual output exceeded the performance guidance. In 2021, the lithium concentrate production was 9016 tons (Guidelines 7,000 tons), an increase of 96% year-on-year. The company's solar pool three-dimensional crystallization technology transformation achieved remarkable results. The lithium concentrate sales reached 6,370 tons, mainly the inventory balance in 2020. As of the end of 2021, the inventory was 11,300 tons (basically lithium concentrate), and will be sold in 2022; 140,900 tons of chromite ore were produced throughout the year (Guidelines 130,000 tons), an increase of 11,300 tons year-on-year. Due to long-term losses, production of high-carbon chromite entrusted processing business has been suspended. The sales volume of chromite ore is 139,000 tons and the inventory volume is 11,300 tons.

volume and price Qisheng Company (Tibet Mining) has been fully released. In 2021, the revenue attributable to shareholders was RMB 644 million, +68.2% year-on-year, and the net profit attributable to shareholders was RMB 140 million, +388.9% year-on-year; in a single quarter, the operating revenue was RMB 207 million, -1.4% month-on-month, and the net profit attributable to shareholders was RMB 12.27 million, and the revenue reduction was mainly due to the impact of heavy snow on the mountain and transportation conditions in Tibet. The main reason was that the net profit attributable to shareholders was RMB 140 million due to the impact of heavy snow on the mountain blockade and transportation conditions. The main reason was that the net profit attributable to shareholders was RMB 7, the second phase of Zabuye Phase II (original fundraising project) was impaired by 47.12 million. In 2022, H1 achieved operating income of 1.22 billion yuan, an increase of 439% year-on-year, and net profit attributable to shareholders of 475 million yuan, an increase of 1018% year-on-year.

2.4 Yajiangcuola & Shaotangou: Tianqi is an important domestic resource reserve, and Yajiangcuola may give priority to the development of

Tianqi system owns two mining rights in Yajiangcuola and Shaotangou in China. Among them, Shenghe Lithium, a wholly-owned subsidiary of Tianqi Lithium, owns the Yajiang Chopal mining rights (valid until 2032). Tianqi Industrial holds 59.3% of Runfeng Mining through direct and indirect, and Runfeng Mining owns the mining rights of Shaotangou spodumene Mine.

Yajiangcuola has a lithium resource of 631,000 tons, and is currently actively promoting the preparations for the reboot of the Yajiangcuola lithium mine. Yajiang Tsola is located in the western mine section of the methylka spodumene mine. According to the mining area exploration geological report, the ore reserves are 19.414 million tons, the ore grade is 1.3%, the Li2O resource volume is 253,000 tons (equivalent to approximately 632,300 tons LCE), the 797 tons of Nb2O5 resource volume is 633 tons of Ta2O5 resource volume. In 2008, Shenghe Lithium won the prospecting rights of the Yajiang County Cuola spodumene mine for 35 million yuan. In 2012, it received the mining license , with a approved production scale of 1.2 million t/a. The original project planned 106,900 t/a lithium concentrate capacity (corresponding to 600,000 t/a of the original ore, temporarily suspended). In September 2021, the company's management team went to Yajiang Cuola spodumene mine for inspection, inspected the equipment and facilities, mining processes, preliminary development planning and current situation of the mining area, and promoted the mine restart to cope with the possible future lack of lithium resources and the risks of raw material import. The charcoal groove has a lithium resource of 1.054 million tons, and the project approved the production capacity of 50,000 t/a gangue quartz ore and 1.2 million t/a spodumene mineral. The Shaotangou project is located in Shaotangou, Xiala Township, Yajiang County, Ganzi Prefecture. The mining area is about 5.61km2. The mining products are metallurgical vein quartz and lithium. In 2004, Runfeng Mining obtained the mining rights of the Shaotangou project. The project adopts the "open-pit + underground" joint mining method, with a mining elevation of 4400m~3960m. According to the China Mineral Resources Report 2018, the quartz type lithium mine of charcoal gutter vein has 427,000 tons of Li2O resources (equivalent to 1.054 million tons of LCE), with a grade of 1.20%.

3. The uncertainty of overseas development has increased, and the long-term prosperity of lithium resources has risen

3.1 The supply and demand of spodumene is tight, the proportion of spot circulation is low and the supply concentration is high; the price of minerals is easy to rise and difficult to fall

The supply and demand of spodumene is tight, the proportion of spot circulation is low and the supply is highly concentrated; the supply and demand of lithium concentrate has become "difficult" in 23 years. A few Australian miners dominate the majority of new production capacity. In the context of the fact that miners have large-scale production increase and price reduction, the optimal strategy of the middle and lower reaches may give priority to resources, and the sub-optimal strategy is to prepare for supply in advance, and the mineral prices are easy to rise and difficult to fall.The main three points are: In terms of supply and demand of

, when spodumene production capacity is tight, lithium salt processors may face "short of rice to cook", large factories lock in mainstream production capacity ahead of schedule, and small factories may face spot market uncertainty: (1) Insufficient supply of lithium ore: According to Baichuan Yingfu data, as of July 15, the operating rates of lithium carbonate and lithium hydroxide were 75% and 60% respectively, and the production capacity is still not fully saturated, mainly due to the shortage of raw material lithium concentrate (rather than insufficient demand). (2) Almost all existing production capacity is bound to long-term contracts, and spot circulation accounts for less than 10%: the proportion of long-term contracts and underwriting in mining industries is currently 94%, and only the Altura project under Pilbara has not yet been signed. In the future, with the acceleration of integration of upstream and downstream integration, the circulation volume of lithium concentrate spot market is expected to remain tight. According to our statistics, the planned long-term contract and underwriting ratio of planned capacity will reach 90%. (3) In the future, the new capacity will be mainly digested by shareholders, and the trend of mining companies extending their layout to the downstream has emerged; with the increase in the discourse power of overseas mining companies, many companies rely on their resource advantages to extend their layout of lithium salt processing to the downstream. For example, Pilbara, Allkem, AMG, LTR, etc. have proposed lithium salt processing capacity construction plans. In the future, the spot stock of high-quality and low-cost lithium ore in the market will become increasingly short of. According to the pricing mechanism of

pricing mechanism, in 23 years, we must prepare for the sustainability and even emergencies of high mineral prices: (1) With the auction platform lithium mine prices gradually rising, the global mainstream lithium mine transaction prices gradually keep up, and the pricing power of lithium salt may gradually shift from "domestic lithium salt supply and demand pricing" to "upstream lithium mine supply and demand pricing"; in the context of strong demand and short supply of goods, lithium miners are reluctant to actively increase production and lower prices, and enterprises should make full preparations in advance; (2) The opportunity for price reduction lies in the unsalable sales of lithium mines and the dumping and collection of goods owners at low prices (similar to the situation where demand suddenly "disappeared" in 2019). In the context of high increase in electrification demand in 23 years, it is difficult to reproduce. (3) On the other hand, the world's mainstream transaction lithium concentrate mainly depends on the price adjustment model of the average price of lithium salts last month or last quarter. The high lag of lithium mineral pricing also determines from the trading mechanism that the prices of lithium minerals and lithium salts will remain high in 23 years, and it is difficult for lithium salt prices to experience a peak decline.

is expected to 40% of the global lithium resource supply in 2022 from Australia. Among them, the "Tianqi + Yabao" combination controls about 60% of the spodumene supply scale in Australia, and has a huge impact on the global spodumene supply supply. (1) According to our statistics, the global lithium resource supply will be approximately 780,000 tons of LCE in 2022, and the supply of spodumene of Australia will reach 310,000 tons of LCE, accounting for 40%; it is estimated that the supply of spodumene of Australia will be 31/42/520,000 tons/LCE in 2022-2024, accounting for 40%/39%/32%. (2) The Greenbushes mine, a subsidiary of "Tianqi & Yabao", is Australia's largest spodumene deposit, is expected to produce 19/20/270,000 tons of LCE in 2022-2024. "Tianqi + Yabao" accounts for about 60%, 58%, and 57% of Australian mine supply from 2022 to 2024, and is the main force in increasing production of Australian mines. (3) We believe that in the face of the rapid expansion of the downstream EV industry chain, high-quality lithium ores naturally have a "deflation tendency", and the main mines are more inclined to maintain production and maintain prices, and have the ability to have an important impact on spodumene prices.

3.2 The influence of Chinese enterprises in controlling overseas lithium resources has been greatly improved, and a common cultural foundation is easier to form. Strategic coordination

In addition to the main production areas of Australia, Chinese-funded enterprises have first-movered advantages in the development of overseas lithium resources in South America, Africa and other regions, and the influence of overseas lithium resources industry has been greatly improved. We believe that in the future, Chinese companies will have a very high voice in the development and even pricing of overseas lithium resources; common cultural foundations will be easier to form strategic coordination.

China-Arab relations continue to heat up, and Argentina has become a hot spot for Chinese-funded enterprises to deploy lithium resources.(1) China and Argentina have been 50 years since the establishment of diplomatic relations in 1972. The two sides established a strategic partnership in 2004. From 2003 to 2013, the trade volume of China-Arabia increased from US$3.18 billion to US$14.84 billion. In 2009, the two sides signed a currency swap agreement, and cooperation in the fields of trade, investment and finance became increasingly close. In 2014, bilateral relations upgraded to a comprehensive strategic partnership. Since 2014, Argentina has experienced three governments and belongs to the left and right wing camps, but both tried to develop China-Arab relations and were basically not affected by government changes. In February 2022, Argentina joined the "Belt and Road" initiative. Currently, China is Argentina's second largest trading partner and Argentina's second largest importer. In July, State Councilor and Foreign Minister Wang Yi went to the G20. During the Foreign Ministers' Meeting, China officially confirmed its support for Argentina to become a member of the BRICS countries, and injected new impetus into higher-level cooperation. (2) The Chinese army seized the "strategic highland" for the development of lithium resources in Argentina. The lithium resources controlled by Chinese-funded enterprises such as Ganfeng, Zijin, Tibet Everest, and Qingshan in Argentina reach 63.94 million tons of LCE, accounting for 45%, and the planned production capacity is 330,000 tons of LCE, accounting for 33%; it is estimated that 4 of the six projects put into production in Argentina before 2023, with a total production capacity of 130,000 tons, including Ganfeng 60,000 tons/Zijin 20,000 tons/50,000 tons/Summit Everest.

African lithium resource development is becoming increasingly important. Chinese-funded mining companies are expected to dominate the development of African hard rock lithium mine resources. All existing projects to be developed have a background of Chinese-funded enterprises. (1) Africa is rich in copper, lithium, cobalt, gold and other high-quality metal ores. Chinese-funded enterprises such as China Semiconductor Group, Jinchuan, Zijin and Luomolybdenum have many years of experience in mining development and government cooperation in Africa, and have unique advantages in lithium resource development. Considering that domestic hard rock lithium ore is mostly concentrated in Sichuan, Xinjiang and other places, the development difficulty and resource endowment are weaker than overseas. In 2020, with the introduction of new Australian FIRB review regulations and the development of domestic hard rock lithium ore is slow and the resource carrying capacity is insufficient, the importance of African lithium ore resource development is increasing. (2) All existing projects to be developed have a background in Chinese-funded enterprises. Currently, except for the two Australian mines of Tianqi, Ganfeng Banner, Greenbushes and Marion, and TANCO, a subsidiary of China Mining Resources, Chinese-funded enterprises are located in Africa, and all of the five mines to be developed in Africa have Chinese-funded enterprises; the current control of the Chinese Legion is 39.65 million tons of LCE, accounting for 57% of the overseas spodumene resources, and the planned production capacity is 5.63 million tons (about 700,000 tons of LCE), accounting for 49%. In terms of production progress, greenland projects will be concentrated in 2024, mainly due to interference from factors such as weak local infrastructure conditions and political turmoil.

3.3 Demand side: "Product-driven + policy-oriented", EV& Energy Storage long-term demand prosperity has established the dual mode of "Product-driven + policy-oriented", and the new energy vehicle industry has entered a period of accelerated development. According to statistics from the China Association of Automobile Manufacturers, the domestic production/sales of new energy vehicles in 2021 reached 3.545/3.521 million units, an increase of 159.5%/157.5% year-on-year, with a penetration rate of 14.8%. The trend of new energy vehicles replacing fuel vehicles is becoming more and more obvious. Referring to the SUV market in the early 2010s, new energy vehicles are still in an accelerated penetration period. From the medium term, the performance of enterprises with resource advantages and capacity expansion advantages in the lithium industry chain has entered a period of rapid release, and it is highly likely that they will continue to enjoy the valuation premium until the penetration rate increases and slows down.

compares the SUV market import situation and after the new product market penetration exceeds 10%, it often enters a period of accelerated penetration. 1) Introduction period (2003-2010): In 2003, the SUV concept began to be introduced, and off-road SUVs began to be launched, but there were fewer models and the market capacity was small. By 2010, the penetration rate was only 9.6%; 2) Growth period (2011-2017): After 7 years of market education, SUVs have gradually been recognized by consumers for their sportiness and multifunctionality. As SAIC, Geely and others entered the market segment and launched their own brand SUVs, the joint venture brands have also been updated. In 2011, the penetration rate of SUV exceeded single digits to 11.2%, and then entered the accelerated penetration period. Until the penetration rate reached 41.7% in 2017, the market growth began to slow down, and the 6-year compound growth rate of sales volume reached as high as 36%.