Strategic Analysis of the 200,000-ton Lithium Salt Long-Term Agreement Between Shengxin Lithium Energy and China Innovation Aviation

The 200,000-ton lithium salt long-term supply agreement signed between Shengxin Lithium Energy (002240.SZ) and China Innovation Aviation for 2026-2030 is set against the backdrop of the rapid development of the global new energy vehicle (EV) and energy storage industries, with sustained growth in lithium product demand (the global lithium demand CAGR is expected to be 11-15% from 2025 to 2030 [0]). As the world’s fourth-largest power battery manufacturer and China’s third-largest power battery installation volume enterprise (2024 data [0]), China Innovation Aviation invested 9.45 billion yuan in October 2025 to become a strategic investor holding over 5% of Shengxin Lithium Energy, laying a strategic foundation for this agreement.

The agreement adopts a “low initial, high subsequent” delivery rhythm, which matches Shengxin Lithium Energy’s capacity planning: the company’s current lithium salt capacity is 137,000 tons/year (about 80,000 tons/year in China [0]), and it needs to expand capacity in the later period to meet the agreement’s demand. Although the company’s current financial indicators are under pressure (market capitalization of 32.17 billion US dollars, significant recent stock gains: 5-day +10.98%, 6-month +175.87%, but the latest report shows negative P/E (-34.69x), negative ROE (-8.14%), and negative net profit margin (-21.83%) [0]), the agreement still provides key support for its future operations.

1. Strategic Binding on Supply and Demand Sides
   : China Innovation Aviation is both a strategic investor and a core customer, building a two-way binding relationship of “investment + supply” to reduce supply chain risks for both parties.
2. Confidence in Capacity Expansion
   : The “low initial, high subsequent” delivery rhythm of the agreement reflects Shengxin Lithium Energy’s confidence in future capacity expansion, which aligns with the long-term growth trend of lithium demand.
3. Strengthening Industry Position
   : Long-term cooperation with global leading power battery manufacturers elevates Shengxin Lithium Energy’s competitive level among lithium salt suppliers and enhances its brand influence.

• Stable Revenue Stream
  : Based on the current lithium salt price (~100,000 yuan/ton), the agreement is worth over 20 billion yuan, providing stable revenue guarantee for the next 5 years [0].
• Hedging Against Price Fluctuations
  : Long-term agreements help reduce the impact of short-term fluctuations in lithium salt prices on the company’s profitability.
• Competitive Advantage
  : Compared with peers that have not signed long-term agreements with leading battery manufacturers, Shengxin Lithium Energy has a first-mover advantage in capacity planning and market position.

• Unclear Details
  : The agreement does not disclose specific annual delivery volumes, pricing mechanisms, or details of capacity expansion, leading to execution uncertainty [0].
• Long-term Market Risk
  : SMM predicts that the lithium market may face oversupply after 2027, which may put pressure on the agreement’s price and profit margin [0].
• Current Operational Pressure
  : The company is currently in a loss-making state; the agreement has no direct impact on short-term performance, and profit improvement depends on long-term execution and market environment.

• Agreement Scale: 200,000 tons of lithium salt from 2026 to 2030, with a “low initial, high subsequent” delivery rhythm.
• Cooperation Background: China Innovation Aviation is a global leading power battery manufacturer and a strategic investor holding over 5% of Shengxin Lithium Energy.
• Company Status: Current market capitalization of 32.17 billion US dollars, significant recent stock gains, but financial indicators are under pressure.
• Market Environment: Global lithium demand continues to grow (CAGR 11-15% from 2025 to 2030), with a short-term (2025-2026) supply gap and potential long-term oversupply.
• Expected Impact: Enhance revenue visibility, strengthen competitive position, and promote long-term profitability improvement.