In-depth Analysis of the Reasons for Tibet Mining's Sustained Losses

Tibet Mining (stock code: 000762.SZ), as a lithium mining enterprise owning the world’s third-largest and Asia’s largest lithium salt lake - Tibet Zabuye Salt Lake, still faces sustained loss pressure amid lithium carbonate price fluctuations. The following is a systematic analysis from multiple dimensions.

According to the latest financial data, Tibet Mining achieved operating revenue of 622 million yuan in 2024, a year-on-year decrease of 22.76%; net profit attributable to parent company shareholders was 112 million yuan, a year-on-year decrease of 31.79%[0]. The company’s current price-to-book ratio is 4.65 times, price-to-earnings ratio is -286.88 times (negative value indicates it is still in a loss state), return on net assets is -1.61%, net profit margin is -20.05%, and operating profit margin is -47.27%[0]. These indicators show that the company’s profitability continues to be under pressure, and despite owning high-quality lithium resources, its financial performance has not fully reflected its resource advantages.

According to the latest financial data, Tibet Mining achieved operating revenue of 622 million yuan in 2024, a year-on-year decrease of 22.76%; net profit attributable to parent company shareholders was 112 million yuan, a year-on-year decrease of 31.79%[0]. The company’s current price-to-book ratio is 4.65 times, price-to-earnings ratio is -286.88 times (negative value indicates it is still in a loss state), return on net assets is -1.61%, net profit margin is -20.05%, and operating profit margin is -47.27%[0]. These indicators show that the company’s profitability continues to be under pressure, and despite owning high-quality lithium resources, its financial performance has not fully reflected its resource advantages.

Although the question mentions “rising lithium carbonate prices”, the actual situation is that lithium carbonate prices showed an overall downward trend in 2024. At the beginning of the year, lithium carbonate prices continued to be affected by oversupply and declining demand at the end of 2023, remaining at a low level. Although prices rebounded in the middle of the year with the continuous expansion of the global electric vehicle market, they still did not recover to the high point at the beginning of 2023[1]. In the first half of 2024, lithium carbonate inventory accumulated significantly, so the market supply-demand imbalance is difficult to fundamentally change in the short term, and prices fluctuated around 90,000-110,000 yuan/ton[2].

In 2024, Tibet Mining’s lithium product revenue was 326 million yuan, but the gross profit margin was only 31.85%, while the company’s lithium product gross profit margin was as high as 75.53% in the previous year[3]. This huge gap directly eroded the company’s profit margin. Compared with peer companies, Salt Lake Co., Ltd.'s lithium product gross profit margin was 50.68% in 2024, and Zangge Mining reached 45.44%, so Tibet Mining’s gross profit margin level is significantly behind its competitors[3].

In 2024, the company’s lithium salt production volume was 5,083.27 tons, a decrease of 34.61% compared with 7,773.35 tons in 2023[3]. The sales volume was 9,822.40 tons, an increase of 17.72% year-on-year, but the decline in production means that the company cannot fully grasp market opportunities. The inventory volume decreased from 9,863.20 tons in 2023 to 5,124.07 tons in 2024, a decrease of 48.05%[1].

Tibet Mining has not yet achieved a 10,000-ton capacity breakthrough so far. The company’s 2025 lithium salt production target is also lower than the actual production in 2023, indicating that capacity expansion faces major challenges[3]. As an enterprise owning Tibet Zabuye Salt Lake (the world’s third-largest and Asia’s largest lithium salt lake), its resource endowment advantage has not been effectively converted into production advantage.

Tibet Shigatse Zabuye Lithium Industry High-Tech Co., Ltd., a holding subsidiary of Tibet Mining, suffered a net profit loss of 10.0161 million yuan in 2024, a decrease of 104.93% compared with the same period last year. The main reason is that under the influence of weak terminal consumer demand, the price of lithium salt products dropped significantly year-on-year, leading to a sharp decline in net profit[1][3].

Baiyin Zabuye Lithium Industry Co., Ltd. suffered a net profit loss of 12.2147 million yuan in 2024, a decrease of 4290.18% compared with the same period last year, mainly due to the provision of fixed asset impairment losses and the handling of environmental protection historical legacy issues in 2024[1][3]. The company has been shut down for a long time, and most of the equipment in the factory area is seriously aging. According to the asset evaluation report, the asset evaluation of Baiyin Zabuye factory area was impaired, with a book value of 17.589 million yuan and a recoverable amount of only 13.542 million yuan[3].

The main buildings of the company were built from 2004 to 2019, and most of them are in a long-term idle state, lacking maintenance. After on-site investigation by evaluators, the buildings have problems such as wall cracking, roof lack of maintenance and overgrown weeds, difficulty in opening doors and windows, and most of them have rusted, and most of the supporting facilities can no longer be used normally[3]. Tibet Mining has tried to list the company for transfer at a price of 197 million yuan many times, but has never been able to successfully sell it.

Tibet Mining adopts conservative accounting policies, showing the characteristics of a high depreciation/capital expenditure ratio. Although lithium carbonate prices have fallen, the costs of raw materials, fuels, labor, etc. in the company’s costs have strong rigidity and are difficult to decline synchronously with product prices[0]. The company’s current ratio is 2.04 and quick ratio is 1.91, indicating that its short-term debt-paying ability is acceptable, but its cash flow situation continues to be tight, with the latest free cash flow being -407 million yuan[0].

To achieve a capacity breakthrough, Tibet Mining needs to continuously invest funds in infrastructure construction and technological transformation. During the period of low lithium prices, large capital expenditures have further exacerbated the company’s financial pressure.

Among salt lake lithium extraction enterprises, Tibet Mining faces fierce competition from Salt Lake Co., Ltd. and Zangge Mining. Relying on the resources of Qarhan Salt Lake, Salt Lake Co., Ltd.'s lithium product gross profit margin reached 50.68% in 2024; Zangge Mining also reached 45.44%, both significantly higher than Tibet Mining’s 31.85%[3]. This indicates that Tibet Mining has gaps with industry-leading enterprises in resource mining efficiency, operation management, cost control, etc.

The reasons for Tibet Mining’s sustained losses amid lithium carbonate price fluctuations are multiple: First, lithium carbonate prices were in an overall downward cycle in 2024, leading to a sharp drop in the company’s product selling prices; second, the 34.61% decline in production made it impossible to dilute costs through economies of scale; third, the gross profit margin plummeted from 75.53% to 31.85%, severely compressing the profit margin; fourth, the operational difficulties of subsidiaries and fixed asset impairment losses further eroded performance; finally, compared with industry-leading enterprises, the company has obvious gaps in operational efficiency and cost control.

Looking forward, the company needs to focus on solving capacity bottleneck problems, improve resource mining efficiency, optimize cost structure, and properly handle historical legacy issues to achieve performance reversal. The resource endowment advantage of Tibet Zabuye Salt Lake still exists, and how to effectively convert resource advantages into operational advantages and competitive advantages will be the key to the company’s future development.

[0] Jinling API Data - Company Financial Data and Market Indicators

[1] Full Text of 2024 Annual Report of Tibet Mining Development Co., Ltd. (http://static.cninfo.com.cn/finalpage/2025-04-02/1222982209.PDF)

[2] 2024 Semi-Annual Report of Zangge Mining Co., Ltd. (https://pdf.dfcfw.com/pdf/H2_AN202408091639222171_1.pdf)

[3] Securities Times - “Tibet Mining’s Net Profit Fell by Over 31% Last Year, This Year’s Lithium Salt Production Target is Lower Than the Actual Production of the Previous Year” (https://stcn.com/article/detail/1639142.html)