Lithium salt prices slumped, Shengxin Lithium Energy 2023 revenue and net profit fell sharply, lithium products gross margin fell by nearly half year-on-year. Although the price of lithium salt rebounded after the Spring Festival, but the long-term view is still oversupply. Shengxin Lithium Energy needs a lot of lithium concentrate after the new capacity is put into production, but the self-sufficiency rate is very low. The company still intends to make profit distribution. After the Spring Festival this year, lithium salt prices ushered in a wave of increases and recovered 100,000 yuan / ton mark, but the industry generally believes that this is only a short-term rebound. In the long term, lithium is still in the trend of oversupply.

Production of lithium carbonate requires a large amount of lithium concentrate, Sheng new lithium energy after the commissioning of new production capacity, 137,000 tons of lithium salt production capacity theoretically need to consume 1.096 million tons of 6% grade lithium concentrate. But in 2023, the company's lithium concentrate production of only 173,000 tons, the self-sufficiency rate is still very low.

Shengxin lithium can actively enhance the self-sufficiency of lithium resources, global layout of lithium resources. In western Sichuan, through the Oino Mining Industry, the company holds the mining and prospecting rights of Yelonggou lithium pyroxene mine and Sun Hekou lithium polymetallic mine. At the same time, it holds 48.06% equity in Huizhong Mining, which is involved in Asia's largest hard rock-type monolithic lithium mine, with Li2O resources amounting to 989,600 tons. In addition, the company also independently operates the SDLA Salt Lake Project in Argentina, with an annual production capacity of 2,500 tons of lithium carbonate equivalent.

Finding and mining can not be completed in the short term, in the next many years, Shengxin Lithium may have to continue to purchase lithium resources, to maintain a stable source of supply is necessary. February 8, Shengxin Lithium has just reached an agreement with Pilbara to underwrite more than 380,000 tons of lithium concentrates, the company will be in the period of 2024-2026, Pilbara's wholly owned subsidiary, Pilgangoora, lithium feldspar procurement concentrates of 85,000 tons, 150,000 tons, and 150,000 tons.