09696 Overview

Export Suspension: Zimbabwe's mines ministry has suspended all exports of raw minerals and lithium concentrates due to improper conduct during the export process, affecting all minerals in transit and deemed necessary for national interest.

Market Reaction: Following the announcement, the main contract for lithium carbonate in mainland China surged over 11%, while Hong Kong lithium mining stocks also experienced significant increases.

Disposal Proposal: TIANQI LITHIUM's board has approved a proposal to dispose of part of its equity interest in SQM, planning to sell up to approximately 3.566 million Class A shares, which is about 1.25% of SQM's total shares.

Regulatory Compliance: The share disposal will be conducted in a manner that avoids triggering the need for shareholder approval under the relevant Listing Rules and regulations.

New Fundraising Plans: TIANQI LITHIUM plans to raise approximately USD375 million through the placement of new H-shares and the issuance of zero-coupon convertible bonds due in 2027.

Equity Dilution Impact: The share placement is expected to cause an equity dilution of about 3.7-3.8%, while full conversion of the convertible bonds could lead to an additional dilution of 2.9-3.2%.

M&A Activity Speculation: JPMorgan suggests that the likelihood of TIANQI LITHIUM pursuing mergers and acquisitions has increased following the fundraising activities.

Stock Price Outlook: The broker has set a target price of HKD52 for TIANQI LITHIUM, maintaining a Neutral rating, while cautioning investors about potential short-term pressure on the stock due to combined dilution effects.

Trading Halt: TIANQI LITHIUM's H shares trading was halted at 9:04 a.m. for an unannounced reason, with short selling amounting to $9.31 million and a ratio of 6.206%.

New Share Issuance: The company plans to issue 65.05 million new H shares at a 9% discount and zero-coupon convertible bonds, aiming to raise approximately HKD5.83 billion.

Share Disposal Proposal: TIANQI LITHIUM's Board approved a proposal to dispose of up to 3.566 million Class A shares in SQM, representing 1.25% of SQM's total shares.

Recent Share Sales: The company has already sold over 748,000 Class B shares in SQM, amounting to 0.29% of SQM's total shares, through its subsidiary Tianqi Lithium HK.

Current Holdings: TIANQI LITHIUM currently holds approximately 62.5566 million Class A shares in SQM, which is about 21.9% of SQM's total shares.

Management Authorization: The Board has authorized management to sell all of its SQM Class A shares within the next year.

Share Placement Announcement: TIANQI LITHIUM plans to place 65.05 million new H-shares at HKD45.05 per share, a 9% discount from the previous closing price of HKD49.5.

Convertible Bonds Issuance: The company intends to issue USD-settled zero-coupon convertible bonds due 2027, with a total principal amount of RMB2.6 billion and an initial conversion price of HKD49.56 per share.

Impact of Conversion: Full conversion of the bonds will result in approximately 59.09 million new shares, representing 3.48% of the enlarged total issued shares.

Expected Proceeds: The net proceeds from both the share placement and convertible bond issuance are anticipated to be nearly HKD5.829 billion.