The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the securities discussed here were, or will prove to be, profitable.
Video Transcript
Guanzhou Tinci is one of the fastest growing companies held in TEMIT and also one of its largest holdings. The Chinese company is the world’s largest electrolyte supplier for electric vehicles batteries with over 30% market share and management are targeting over 40% market share in future years. Electrolytes are one of the 4 key components in Lithium-ion batteries – sitting alongside the anode, cathode and separator.
We like the company for two key reasons – first, it gives us exposure to the secular growth opportunities in electric vehicles and energy storage – two critical components of the transition to lower emissions. And secondly – from a competitive perspective, Tinci is well positioned in the market.
Their advantage comes from having a production cost that is much lower than the industry average. This is driven by their vertical integration strategy, from basic materials to solute and additives – two main components for electrolyte production.
Tinci is also well prepared for future technologies, including an ultra-high purity salt called LiFSI which possesses better technical characteristics than existing solutions in terms of conductivity, safety and lifecycle. We believe that demand for LiFSI will increase significantly due to the growth of high-nickel content batteries and the move towards fast-charging batteries. Tinci is currently the largest producer of LiFSI globally and the fastest mover in terms of new capacity expansion.
This technology leadership builds strong entry barriers against newcomers. We believe that Guangzhou Tinci’s competitive advantages should position it to capture robust demand from batteries needed for electric vehicles and energy storage, two of the fastest growing parts of the global economy.
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This information is issued and approved by Franklin Templeton Investment Management Limited (FTIML). It does not constitute investment advice. The information provided should not be considered a recommendation to purchase or sell any particular security. It should not be assumed that any of the security transactions discussed here were or will prove to be profitable. These opinions are not intended to be a forecast of future events, research, a guarantee of future results or investment advice. Past performance is not a guide to future returns. The return may increase or decrease as a result of fluctuations in the markets, in currency and/or in the portfolio.
Market and currency movements may cause the capital value of shares, and the income from them, to fall as well as rise and you may get back less than you invested. The analysis of Environmental, Social and Governance (ESG) factors form an important part of the investment process and helps inform investment decisions. The strategy does not necessarily target particular sustainability outcomes. The opinions contained in this document are those of the named manager(s). They may not necessarily represent the views of other managers, strategies or funds. Shares in investment trusts are traded on a stock market and the share price will fluctuate in accordance with supply and demand and may not reflect the value of underlying net asset value of the shares. The majority of charges will be deducted from the capital of the company. This will constrain capital growth of the company in order to maintain the income streams.