horizonforbiddenwestcrashingps4| Tianli Lithium Energy products fell in price and lost 500 million yuan the next year. Four top executives questioned internal control defects and received inquiry letters

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Source: Changjiang Business Daily

Xu Jia, reporter of Changjiang Business Daily

Tianli Lithium Energy (301152Horizonforbiddenwestcrashingps4.SZ) lost money in the following year and was accused of internal control problems.

According to the annual report, Tianli Lithium can achieve operating income of 24% in 2023.Horizonforbiddenwestcrashingps44.3 billion yuan, down 8.43% from the same period last yearHorizonforbiddenwestcrashingps4Belong to shareholders of listed companiesHorizonforbiddenwestcrashingps4The net profit (net profit, the same below) is-503 million yuan, and the net profit after deducting non-recurrent profit and loss (deducting non-net profit, the same below) is-485 million yuan.

A reporter from the Yangtze River Business Daily noted that the price fluctuation in the lithium salt market, weak demand downstream, and the general decline in the price of lithium materials led to a decline in gross profit margin, while superimposed asset impairment and other factors, which became the main reasons for the sharp decline in Tianli's lithium performance.

It is worth noting that shortly after the release of the annual report, Tianlili was able to receive supervision letters from the company's independent directors and audit committee. Three independent directors and one non-independent director of the company found defects in the company's internal control in the course of their duties and urged the company to carry out rectification. Among them, Qianchuan Power, a subsidiary of Tianli Lithium Energy holding Company, provided 25 million yuan of funds to its subsidiaries in February this year, and whether there is a problem of forming non-holding shareholding companies to occupy funds of listed companies.

On May 22, the Shenzhen Stock Exchange issued an inquiry letter to Tianli LiNeng, inquiring in detail about the reasons for the sharp decline in the company's performance, the existence of non-operating funds or financial assistance, as well as the internal control issues mentioned in the above supervision letter.

Gross profit margin fell sharply and fell into losses

Data show that Tianli Lithium has been engaged in the research, development, production and sales of lithium battery materials, and its main products include ternary materials, lithium iron phosphate, lithium carbonate and other lithium battery materials. At present, its products are mainly ternary materials, which are mainly used in the manufacture of lithium-ion batteries such as power batteries and energy storage batteries, and are finally used and widely used in new energy vehicles, electric bicycles, power tools and 3C and other related fields.

Prior to this, with the rapid development of the new energy industry, the price of the main raw materials of Tianli lithium energy products rose sharply, leading to an increase in product sales unit price and net interest rate, and the company's profitability showed a trend of rapid growth.

From 2018 to 2021, Tianli LiNeng's operating income and net profit increased from 936 million yuan and 40.796 million yuan to 1.663 billion yuan and 84.85 million yuan, respectively.

In August 2022, Tianli Lithium can break through IPO listed on the gem. In the first year of listing, Tianli LiNeng's performance reached its peak, with operating income of 2.668 billion yuan, up 60.47%, net profit of 132 million yuan, up 56.16%, and non-net profit of 115 million yuan, up 5.89% over the same period last year.

Since 2023, with the decrease of downstream market demand and the great fluctuation of lithium salt market price, Tianli Lithium Energy performance has changed. According to the annual report, Tianli LiNeng achieved operating income of 2.443 billion yuan that year, down 8.43% from the same period last year; net profit was-503 million yuan, deducting non-net profit-485 million yuan, down 479.63% and 522.39% respectively from the same period last year.

For the loss in 2023, Tianli LiNeng said that the main reason is that, on the one hand, affected by the sharp drop in the price of lithium sources of major raw materials during the reporting period, the price of the company's products dropped accordingly, under the background of slower growth of downstream demand and intensified competition in the industry. the gross profit of the company's products has declined; the higher-priced raw material bank accumulated by the company in the early period has a large amount of impairment loss during the reporting period. On the other hand, some of the company's fund-raising projects have been completed and put into production, resulting in an increase in fixed costs.

According to the annual report, in 2023, the gross profit margins of Tianli lithium energy ternary materials and lithium carbonate products were-9.43% and 2.84% respectively, down 21.59% and 11.14% respectively from the same period last year.

From a quarterly point of view, in the four quarters of 2023, Tianli Lithium can achieve operating income of 580 million yuan, 718 million yuan, 648 million yuan and 497 million yuan respectively, and net profit of 499500 yuan,-64.6801 million yuan,-480.84 million yuan,-391 million yuan.

In the first quarter of this year, Tianli Lithium achieved operating income of 438 million yuan, down 24.5% from the same period last year; net profit and deducted non-net profit were-46.2293 million yuan and-54.1507 million yuan respectively, still at a loss.

In the inquiry letter, the Shenzhen Stock Exchange first asked Tianli Lithium to explain the reasons and reasonableness of the sharp decline in performance in 2023 and the sharp decline in gross profit margins of major products, as well as the reasons and rationality of large fluctuations in financial data in each quarter.

Be urged by the independent director to rectify and reform.

Not only the poor performance, but also the internal control of Tianli LiNeng has also been put on the table.

On May 10, Tianli Lithium disclosed that the company had received supervision letters from the company's independent directors and audit committee. Three independent directors and one non-executive director found defects in the company's internal control in the course of performing their duties and are now urging the company to carry out rectification.

Changjiang Business Daily reporter noted that Tianli Lithium can be accused of internal control defects, mainly related to the funding provided by its subsidiaries. In February this year, Qianchuan Power, a subsidiary of Tianli Lithium Energy, provided 25 million yuan to its subsidiary.

According to the minutes of the board meeting, the board of directors expressed serious concern about whether there was a problem of non-holding shareholding companies occupying funds of listed companies in the 25 million yuan loan from Thai Investment Industrial Co., Ltd., and instructed the management of the company to further implement it.

In a letter of supervision, the above-mentioned executives asked Tianli LiNeng's board of directors to start the follow-up compliance process for loans to Pacific Investment Industrial related party transactions as soon as possible. Not only that, the supervision letter also shows that if Qianchuan Power does form control over Thai Investment Industry, the listed company should deal with the relevant industrial and commercial changes as soon as possible, and the equity ratio reflects the control of listed companies over Qianchuan Power and Qianchuan Power. If it is finally determined that Qianchuan Power can not control Thai Investment Industry, Qianchuan Power's 25 million yuan loan to Thai Investment Industrial belongs to the occupation of funds, which should be dealt with in strict accordance with the relevant laws and regulations on the management of listed companies and disclosed in a timely manner.

According to the announcement disclosed by Tianli LiNeng, on February 4 this year, Tianli LiNeng signed an agreement with relevant shareholders of Qianchuan Power, in which Tianli LiNeng intends to hold a 51% stake in Qianchuan Power in the form of a capital increase.

In the inquiry letter from the Shenzhen Stock Exchange, the regulatory authorities also asked Tianli Lithium about whether there was any non-operating capital occupation or financial assistance provided by Qianchuan Power to Taitou Industrial, and the effectiveness of the company's internal controls. At the same time, the Shenzhen Stock Exchange also asked Tianli Lithium to explain the impact of the above-mentioned transaction to hold shares of Qianchuan Power on the company's operation and management, asset business and other aspects, whether there are any synergy effects and specific manifestations of the synergy effects.

In addition, the above-mentioned senior executives also pointed out in the urging letter that Tianli Lithium Energy's futures investment from 2023 to 2024 violated the relevant management regulations and internal governance regulations of listed companies, and was not approved and authorized by the board of directors. The company immediately stopped this high-risk investment behavior.

The annual report shows that in 2023, the actual profit and loss of Tianli Lithium Energy's derivative investment for hedging purposes will be-38.3307 million yuan.