Tianqi Lithium Corporation has announced plans to raise capital through a placement of new H-shares and the issuance of convertible corporate bonds, alongside the potential sale of its stakes in China Innovation Airlines and SQM. Combined, these financial maneuvers are expected to generate over 7 billion yuan in funds.
An analysis of the company's current financial metrics suggests that Tianqi Lithium does not face significant liquidity or debt pressure. The company indicated that the raised capital will be used for further mergers and acquisitions in lithium resources. This move comes as lithium carbonate prices have surged significantly over the past year, raising questions about whether the company is positioning itself for strategic buying low and selling high.
In April 2024, second-generation leader Jiang Anqi took over as chairperson, promoting a long-term strategy focused on strengthening the upstream sector, enhancing the midstream, and penetrating the downstream market. However, shortly after her appointment, Jiang halted the second phase of the Kwinana hydroxide lithium project in Australia and recorded a full impairment of 1.484 billion yuan. The company is now also divesting its stake in China Innovation Airlines, a leading downstream battery manufacturer.
Furthermore, Tianqi Lithium's research and development expenditure has consistently been substantially lower than that of its peer Ganfeng Lithium. This stands in stark contrast to Ganfeng's active pursuit of an integrated lithium-ion battery industry chain, suggesting Tianqi may still be heavily betting on upstream resources.
The company announced plans to place 65.05 million new H-shares to independent investors at HKD 45.05 per share, while also issuing convertible bonds with a total principal value of 2.6 billion yuan. The initial conversion price for the bonds is set at HKD 49.56 per H-share. If the share placement is fully subscribed and all bonds are converted, the net proceeds are estimated to reach approximately HKD 5.829 billion. These funds are intended for strategic development within the lithium sector, potential acquisitions of quality lithium mining assets, and supplementing working capital.
On the same day, Tianqi revealed its intention to divest its stake in China Innovation Airlines, valued at approximately 459 million yuan, and a portion of its stake in SQM, valued around 1.433 billion yuan, totaling roughly 1.892 billion yuan.
Despite these substantial fundraising activities, Tianqi Lithium's financials show limited strain. For the first three quarters of 2025, the company returned to profitability, with net operating cash flow reaching 2.193 billion yuan. As of the end of Q3 2025, its asset-liability ratio stood at 30.50%, significantly lower than the industry average, which includes peers like Ganfeng Lithium.
It is noteworthy that lithium carbonate prices have experienced substantial volatility recently, with peak increases exceeding threefold within a year. Tianqi stated that the net proceeds from the share placement and bond issuance are earmarked for strategic initiatives in the lithium field, including capital expenditure for project development and optimization, acquisitions of premium lithium mineral assets, with the remainder allocated for working capital and general corporate purposes. The timing of these significant capital operations during a period of sharp lithium price fluctuations invites scrutiny regarding potential market-timing strategies.
Following her appointment in April 2024, Chairperson Jiang Anqi appears to be continuing the "resources-first" development strategy championed by her father, Jiang Weiping. In January 2025, merely months after she took the helm, Tianqi Lithium terminated the Kwinana Stage II project and recognized the full impairment of the 1.484 billion yuan already invested.
The decision to sell its stake in China Innovation Airlines, a major player in the power battery sector with which Tianqi could have synergistic upstream-downstream benefits, may signal a deliberate move away from deep integration with key downstream customers. This highlights a potential strategic limitation centered on focusing upstream while distancing from the downstream market.
In recent years, Tianqi Lithium's R&D investment, both in absolute terms and as a proportion of revenue, has remained considerably lower than that of Ganfeng Lithium. Ganfeng has established a vertically integrated system encompassing lithium resource development, lithium chemical processing, lithium battery manufacturing, and recycling. By the end of 2024, Ganfeng held global lithium resource reserves equivalent to 49.5 million tonnes of lithium carbonate equivalent (LCE) and had deployed an annual lithium battery production capacity of 35 GWh, covering power, energy storage, and consumer applications, including 1 GWh of mass-produced solid-state battery capacity. This comprehensive产业链布局 helps mitigate cyclical industry risks. In contrast, Tianqi Lithium's strategy seems persistently focused on a high-stakes bet on upstream resources.