In-depth Analysis Report on Tinci Materials' Customer Diversification Strategy

Now let me present to you the in-depth analysis report on Tinci Materials’ customer diversification strategy.

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Tinci Materials’ customer diversification strategy

, with its dependence on CATL dropping significantly from the early 60-70% to approximately 21%. The newly signed long-term supply agreements (totaling over 2.945 million tonnes from 2026 to 2030) can effectively support its capacity expansion plan. However, the strategy still faces risks such as industry cyclical fluctuations and technological substitution by solid-state batteries, which require continuous attention.

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According to my analysis, Tinci Materials has successfully achieved a fundamental transformation in its customer structure:

Time Node	CATL Order Proportion	Customer Coverage	Change Assessment
Before June 2024	Approximately 60-70%	Single customer dependence	High risk concentration
June 2024	Added 800,000 tonnes	Diversified to 2 customers	Began decoupling
July-November 2025	Added 2.155 million tonnes	Diversified to 5 customers	Accelerated diversification
End of 2025	Approximately 21%	Diversified pattern formed	Significant risk reduction

As can be clearly seen from the chart above, Tinci Materials’ customer structure has transformed from over-reliance on a single customer to a relatively balanced diversified layout [0].

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Since June 2024, Tinci Materials has intensively signed long-term supply agreements with multiple leading battery companies:

Signing Time	Customer Name	Supply Period	Order Volume (10,000 tonnes)	Order Nature
June 2024	CATL	-	80	Existing Agreement
July 2025	Chuna New Energy	Until the end of 2030	≥55	New Long-Term Order
September 2025	REPT BATTERO	Until the end of 2030	≥80	New Long-Term Order
November 2025	Gotion High-Tech	2026-2028	87	New Long-Term Order
November 2025	CALB	2026-2028	72.5	New Long-Term Order

[1]

These agreements adopt a dynamic pricing mechanism of “linking to the SMM index + cost range”, allowing prices to fluctuate within a certain range, and setting flexible volume adjustment clauses to respond to market fluctuations [2].

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Indicator	2024	2025(E)	2026(E)	2027(E)
Electrolyte Capacity (10,000 tonnes)	85	90	100	110
YoY Growth (%)	15	5.9	11.1	10
Lithium Hexafluorophosphate Capacity (10,000 tonnes)	11	11	12	13
Market Share (%)	31.6	32.2	33+	34+

Tinci Materials currently has an annual electrolyte capacity of 850,000 tonnes and an annual lithium hexafluorophosphate capacity of 110,000 tonnes. Its electrolyte shipment volume has ranked first in the industry for 10 consecutive years, and its market share further increased to 32.2% in 2025 [1].

From the comparison of order demand and capacity:

• Current Capacity
  : 850,000 tonnes
• Pre-sold Capacity
  : Approximately 680,000 tonnes (80%)
• Remaining Salable Capacity
  : Approximately 170,000 tonnes (20%)
• 2026 Target Capacity
  : 1,000,000 tonnes
• Order Coverage Rate
  : Approximately 105-110%

Analysis shows that approximately 80% of Tinci Materials’ capacity has been “pre-sold” through long-term agreements. Based on the current customer structure, it is unlikely that the remaining 20% of capacity will be renewed in a long-term order with CATL; instead, it will flow to other small and medium-sized battery enterprises or be used as flexible allocation resources [1].

: The 2026 1 million tonne capacity target can basically achieve full production and sales, with an order coverage rate of over 100%.

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Year	Non-Recurring Profit and Loss Excluded Net Profit (RMB 100 million)	YoY Change	Background Factors
2022	55.0	Historical Peak	Lithium battery industry boom cycle
2023	12.0	-78%	Industry overcapacity, price war
2024E	3.8	-68%	Sustained bottom oscillation
2025E	8.5	+124%	Cycle reversal, simultaneous volume and price increase
2026E	18.0	+112%	Expected continuous recovery

Financial analysis shows that Tinci Materials adopts conservative accounting policies with low debt risk [0]. The non-recurring profit and loss excluded net profit dropping to RMB 380 million in 2024 is mainly affected by the industry cycle, but as the price of lithium hexafluorophosphate rebounds to approximately RMB 160,000 per tonne and the electrolyte price rises to approximately RMB 60,000 per tonne, the company’s profitability is expected to recover significantly [3].

Tinci Materials has an annual lithium hexafluorophosphate capacity of 110,000 tonnes, basically achieving full self-sufficiency in raw materials. This vertical integration layout allows it to fully enjoy the dividends brought by the simultaneous price increase of raw materials and products, building a strong profit defense line [1].

In the first three quarters of 2025, Tinci Materials’ R&D expenses reached RMB 616 million, far exceeding that of its peer Capchem (RMB 360 million). The company adopts a dual-route layout of sulfide and oxide in the field of solid-state battery electrolytes. Sulfide electrolytes have entered the pilot test stage, with a global market share of over 60% for sulfide precursors, and the cost is 40% lower than that of Japanese enterprises [1][4].

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The lithium battery industry is undergoing in-depth adjustment. In January 2026, four ministries including the Ministry of Industry and Information Technology jointly held a symposium on the power and energy storage battery industry, warning of the risk of disorderly competition, with 16 enterprises including CATL, BYD, and Tinci Materials participating [5]. The proportion of profitable enterprises in the lithium iron phosphate industry is only 16.7%, and the five leading listed lithium iron phosphate enterprises have accumulated losses of over RMB 10.9 billion from 2023 to 2025 [2].

Tinci Materials has actively slowed down the pace of traditional capacity expansion:

• The 41,000 tonne annual production project has been postponed to July 2026
• The 300,000 tonne electrolyte project has been reduced to 250,000 tonnes
• Canceled the construction of the 100,000 tonne battery disassembly and recycling project [1]

The accelerated commercialization of solid-state batteries may impact the market pattern of traditional electrolytes. Although Tinci Materials has a layout in the solid-state electrolyte field, if technological iteration is too fast, it may face the risk of revaluation of existing capacity value [4].

Although the dependence on CATL has dropped to approximately 21%, the proportion of the top five customers is still relatively high, requiring continuous attention to customers’ payment capabilities and order execution status.

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Scenario	2026 Revenue (RMB 100 million)	Non-Recurring Profit and Loss Excluded Net Profit (RMB 100 million)	Capacity Utilization Rate
Optimistic	220-250	20-25	95%+
Neutral	180-200	15-18	85-95%
Pessimistic	150-170	8-12	75-85%

1. Volume Growth
   : Capacity reaches 1,000,000 tonnes in 2026, with market share increasing to 33%+
2. Price Growth
   : Continuous increase in lithium hexafluorophosphate price, linked price increase of electrolyte
3. Profit Margin Expansion
   : Cost reduction through vertical integration, release of dividends from raw material price increases
4. New Business
   : Solid-state battery electrolytes contribute incremental revenue

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:

• ✅
  Significant Reduction in Dependence Risk
  : CATL order proportion dropped from 60-70% to approximately 21%
• ✅
  Optimized Customer Structure
  : Formed a diversified matrix including Gotion High-Tech, CALB, REPT BATTERO, Chuna New Energy, etc.
• ⚠️
  Potential Risks
  : Industry cyclical fluctuations and technological substitution by solid-state batteries still require attention

:

• ✅
  Short-term (2026)
  : Order coverage rate of over 100%, full production and sales can be achieved for the 1,000,000 tonne capacity
• ✅
  Medium-term (2027)
  : Long-term agreements support the 1.1 million tonne capacity utilization rate
• ⚠️
  Long-term Risks
  : Need to continuously track changes in customer demand and technological iteration

1. Renewal status after the expiration of the CATL agreement at the end of 2025
2. 2026 electrolyte price trend and cost transmission of lithium hexafluorophosphate
3. Commercialization progress of solid-state battery electrolytes
4. Squeezing of small and medium-sized suppliers caused by the increase in CR5 of leading battery enterprises

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[0] Jinling AI Financial Database - Tinci Materials Financial Analysis Data

[1] Caifuhao - “Industrial Code and Future Chess Game Behind the Surge in Performance” (https://caifuhao.eastmoney.com/news/20260116093025070919040)

[2] Autohome - “Doubled in Half a Year, Approaching RMB 150,000 per Tonne! Behind the Skyrocketing Lithium Price, the Battery Industry Has Changed” (https://chejiahao.autohome.com.cn/info/24717447)

[3] EET-China - “Latest Bidding and Tendering Situation of CATL” (https://www.eet-china.com/mp/a468901.html)

[4] Sina Finance - “Investment Value Analysis of Solid-State Battery Sector: Industry Chain Panorama and Short-Term Opportunities” (https://cj.sina.cn/articles/view/7879848900/1d5acf3c401902mqwk)

[5] Sina Finance - “MIIT Leads Warning of Irrational Competition in Lithium Battery Industry” (https://finance.sina.com.cn/roll/2026-01-08/doc-inhfqyhi5220770.shtml)