(Yicai Global) Aug. 24 -- Shares of Chinese fine chemicals producer Tinci Materials Technology jumped to a historic high after the firm which counts Tesla, BMW, and Sweden's Northvolt as some of its clients revealed its CNY5.3 billion (USD813 million) plan for more battery raw materials.

Tinci's stock price [SHE: 002709] jumped 10 percent to CNY140.84 (USD21.70) intraday. The shares have more than tripled in value in the past five months, and risen by about 15 times in the past three years amid the firm's increasing product demand.

The Guangzhou-based company unveiled three projects to hike its output of battery raw materials and one to recycle used batteries, according to its statement released yesterday. Moreover, the firm reported promising earnings results for the first half of this year.

Three Plants

Two of Tinci's production facilities in northwestern China's Jiujiang will be upgraded for about CNY3 billion. After that, the factories will be able to produce 200,000 tons of electrolytic material lithium hexafluorophosphate a year, as well as 300,000 tons of LiFSI and other additives.

Moreover, the firm will spend CNY1.8 billion to build a new plant in eastern China's Nantong. The facility will be making 200,000 tons of electrolytes, and 20,000 tons of LiFSI a year. It should take 24 months to get the plant up and running.

The above-mentioned projects are expected to bring the firm around CNY22.9 billion (USD3.5 billion) in revenue and CNY2.7 billion in net profit each year, Tinci predicted.

Recycling

One of the new undertakings involves recycling. Tinci will invest CNY551 million (USD84.9 million) over 18 months to establish a facility to recover materials from used batteries.

The resources should include 27,200 tons high-purity lithium carbonate, 17,600 tons of battery-grade iron phosphate, and 7,600 tons of nickel-cobalt-manganese salt per year. The project should bring the firm CNY2 billion in annual revenue and CNY237 million in net profit.

Earnings

Tinci has been having a great year.

The company almost tripled its net profit to CNY783 million in the first half from a year ago due to strong demand and rising prices, according to its earnings report published yesterday. Revenue more than doubled to CNY3.7 billion and cash flow from operating activities nearly tripled to CNY719 million.

The chemicals firm offered earnings guidance. In the third quarter, Tinci expects to see its net profit increase to a sum between CNY620 million and CNY820 million, up about 200 percent from a year ago.

Rising Battery Raw Material Demand

Tinci is a big provider of lithium hexafluorophosphate, a core material of battery electrolytes.

Prices of the salt jumped to CNY400,000 (USD61,767) per ton late last month from CNY100,000 early this year amid the booming new energy vehicle market. Thus, many firms have revealed plans to raise their outputs.

Tinci had a 32 percent market share of battery electrolytes in China, and a 20 percent market share in the world as of December 2020, according to public information. The company's capacity was 106,000 tons of lithium-ion battery electrolytes, but it was expanding it by 350,000 tons at that time.

The domestic market is enlarging. China produced 21,320 tons of lithium hexafluorophosphate in the first half, more than two times that of the first six months of 2020, according to industrial data provider Iccsino.Com.

Editor: Emmi Laine, Xiao Yi