(Yicai Global) April 28 -- Shares of Youngy declined after the Chinese lithium mine operator and processor of lithium salts used in batteries revealed a 76 percent profit plunge in the first quarter due to falling product prices.

Youngy's equity price [SHE: 002192] closed 2.4 percent lower at CNY70.50 (USD1.20), dipping to levels close to the bottom since June 2021. The shares have fallen about 61 percent since early July 2022.

Net profit slumped by more than three-quarters to CNY62.1 million (USD9 million) in the first quarter from a year ago, the Guangzhou-headquartered company said in its earnings report yesterday. Revenue decreased by 59 percent to CNY194 million (USD28.1 million) as prices of lithium salts fell. Net cash flow from operating activities was negative CNY235 million (USD34 million).

The hardships come after a stellar year. In 2022, Youngy's net profit surged almost 36 times to CNY2.4 billion (USD347 million) from 2021 while revenue more than tripled to CNY3 billion due to the rising prices of lithium salts. Net cash flow from operating activities stood at CNY1.3 billion.

The upward swing of battery material prices has reversed since the beginning of this year, as prices of battery-grade lithium carbonate collapsed below CNY200,000 (USD28,893) per ton early this month, after rising more than 300 percent last year and peaking at almost CNY600,000 per ton in November 2022, according to data released by the Ministry of Industry and Information Technology.

In order to diversify, Youngy announced in another statement yesterday that it is ready to foray into the downstream part of the cathode material manufacturing field which uses lithium carbonate as the main ingredient. The company will build a plant with an annual production capacity of 40,000 tons and the fixed-asset investment is expected to be at least CNY900 million.

Youngy's actual controller Lv Xiangyang is one of the co-founders of the world's largest electric vehicle maker BYD and he still holds 8.2 percent of the latter's equity. Meanwhile, Youngy's parent company Youngy Investment Holding Group holds a 5.3 percent stake in the carmaker, according to information from the Shenzhen Stock Exchange.

Editor: Emmi Laine, Xiao Yi