Debt Structure Optimization Analysis Report for Tianqi Lithium (SZ002466)

Based on the obtained data and market information, I will systematically analyze the debt structure optimization of

for you:

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According to the Q3 2025 financial report, Tianqi Lithium’s total liabilities amount to

[1], with the liability structure as follows:

Liability Category	Amount (RMB 100 million)	Proportion	Main Components
Current Liabilities	44.70	19.8%	Short-term borrowings of RMB 1.191 billion, non-current liabilities due within one year of RMB 0.962 billion, accounts payable of RMB 1.538 billion
Non-Current Liabilities	180.88	80.2%	Long-term borrowings of RMB 13.683 billion, deferred income tax liabilities of RMB 2.076 billion, lease liabilities of RMB 0.938 billion

Indicator	Value	Industry Benchmark Comparison	Evaluation
Current Ratio	3.18	>2.0 is considered good	Excellent
Quick Ratio	2.59	>1.0 is considered good	Excellent
Asset-Liability Ratio	30.52% (Q3 2025)	Industry average approx. 45%	Good
Current Liabilities/Total Liabilities	19.8%	-	Low short-term debt repayment pressure

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Tianqi Lithium’s asset-liability ratio shows a

[2]:

Year	Asset-Liability Ratio	YoY Change
2020	82.32%	Base year
2021	58.42%	-23.90%
2022	48.12%	-10.30%
2023	35.67%	-12.45%
2024	24.48%	-11.19%
Q3 2025	30.52%	+6.04%

: In 2024, through the introduction of a , the asset-liability ratio dropped sharply from 35.67% in 2023 to 24.48%, a decrease of [2].

Optimization Measure	Time	Effect	Financing Cost
IGO Capital Increase	2024	Reduced liabilities by RMB 9.85 billion	Equity financing (no interest)
Short-Term Commercial Paper Issuance and Redemption	2024-2025	Issued RMB 0.3 billion with an interest rate of 2.35%	Low-cost financing
Sci-Tech Innovation Bond	July 2025	Issued RMB 0.6 billion with an interest rate of 2.48%	Medium- to long-term low-cost capital
Termination of Kwinana Phase II Project	January 2025	Saved approx. RMB 1.5 billion in invalid investment	Avoided future liabilities
Lithium Concentrate Inventory Optimization	2024-2025	Reduced inventory costs by approx. RMB 0.8 billion	Reduced capital occupation

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Since taking office in 2024, the new Chairman

has implemented a “quality over quantity” strategy[2]:

1. Project Contraction and Optimization
   : Terminated the construction of the Kwinana Phase II plant in Australia to avoid ineffective resource investment
2. Inventory Cost Optimization
   : Adjusted the lithium concentrate pricing cycle to align inventory costs with market prices
3. Industrial Chain Upgrade
   : Focused on next-generation technologies such as solid-state batteries to improve asset quality

Tianqi Lithium has actively expanded

[1]:

• Short-Term Financing Instruments
  : 2024 Phase I Short-Term Commercial Paper of RMB 0.3 billion with a coupon rate of 2.35%
• Innovative Financing Products
  : 2025 Phase I Sci-Tech Innovation Bond of RMB 0.6 billion with a coupon rate of 2.48% and a term of 3 years
• Equity Financing
  : Secured a $1.395 billion capital increase by introducing strategic investor IGO

H1 2025 results show[2]:

• Return to Profit
  : Net profit attributable to shareholders was RMB 84.4106 million, representing a YoY increase of 101.62%
• Reversal of Investment Income
  : The negative impact of the SQM tax ruling was eliminated, with investment income turning from a loss of RMB 1.121 billion to a profit of RMB 0.205 billion
• Improvement in Financial Expenses
  : The Australian dollar strengthened against the US dollar, turning financial expenses from an outflow of RMB 0.229 billion to a net income of RMB 0.268 billion

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Risk Type	Specific Performance	Risk Level
Lithium Price Fluctuation Risk	Lithium prices have fallen by over 80% from their 2022 peak, affecting revenue and solvency	Medium
Exchange Rate Risk	Overseas business revenue is denominated in USD/AUD; exchange rate fluctuations affect financial expenses	Medium
Short-Term Debt Repayment Pressure	Non-current liabilities due within one year in Q3 2025 were RMB 0.962 billion	Low
High Proportion of Non-Current Liabilities	Non-current liabilities account for 80.2%; the debt maturity structure needs optimization	Medium-Low

Recommendation Direction	Specific Measures	Expected Outcome
Extend Debt Maturity	Issue medium- to long-term corporate bonds, convertible bonds	Reduce short-term debt repayment pressure
Continue Reducing Asset-Liability Ratio	Appropriately repay high-interest debt and optimize capital structure	Save on financial expenses
Improve Profitability	Optimize product structure and increase the proportion of high-value-added products	Enhance endogenous solvency
Strengthen Exchange Rate Management	Use tools such as forward foreign exchange contracts to hedge exchange rate risks	Stabilize financial expenses

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Indicator	Value	Industry Position
Market Capitalization	$96.19 billion	Leading enterprise in the lithium industry
P/E Ratio	-47.49x	In a loss-making state (expected to improve)
P/B Ratio	2.27x	Below historical average
1-Year Price Increase	77.28%	Strong rebound in stock price

1. Significant Improvement in Debt Structure
   : Asset-liability ratio dropped from 82.32% to below 30%, significantly reducing financial risks
2. Adequate Liquidity
   : Current ratio of 3.18x, with strong short-term solvency
3. Solid Leading Position in the Lithium Industry
   : Controls Talison, the world’s largest spodumene mine, with superior resource endowment
4. Strategic Transformation Taking Effect
   : New management promotes high-quality development and focuses on core technologies

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Tianqi Lithium has successfully optimized its debt structure through three core strategies:

. Its asset-liability ratio dropped from 82.32% in 2020 to 24.48% in 2024, a decrease of , achieving a fundamental improvement in financial conditions[2]. As the lithium industry cycle rebounds and the company’s strategic transformation deepens, Tianqi Lithium’s debt risks have been significantly reduced, and its medium- to long-term investment value is gradually emerging.

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[1] Tianqi Lithium Corporation 2025 Third Quarter Report (http://static.cninfo.com.cn/finalpage/2025-10-30/1224762331.PDF)

[2] Tianqi Lithium: From the Bottom of the Cycle to Strategic Restructuring (http://mp.cnfol.com/51345/article/1756864100-141992799)