Steady growth of civil explosion and gradual release of lithium salt performance — on the 21st, Sichuan Yahua Industrial Group Co.Ltd(002497) disclosed a super “strong” performance forecast for the first quarter of 2022.
The company expects the net profit attributable to the parent company in the first quarter of this year to be 900 million yuan to 1.2 billion yuan, with a year-on-year increase of 1053.67% – 1438.22%.
dual main business drive
Sichuan Yahua Industrial Group Co.Ltd(002497) said that the main reasons for the substantial growth of the company’s performance in the first quarter of 2022 compared with the same period of the previous year are: during the reporting period, the company’s civil explosive business continued to make steady progress and the performance increased steadily; The sales volume of lithium salt products increased gradually, and the profit of lithium business increased significantly.
In terms of civil explosive business, the company has a licensed production capacity of 228000 tons of explosives, a licensed production capacity of 203.92 million industrial detonators (including about 54 million electronic detonators), a licensed production capacity of 15 million meters of industrial detonators and 100 million meters of plastic detonators. The production capacity scale is among the top in the industry.
In terms of lithium business, the company has a lithium salt capacity of 43000 tons, including 33000 tons of lithium hydroxide and 6000 tons of lithium carbonate. The 30000 tons of battery grade lithium hydroxide capacity of Ya’an phase I is expected to be completed by the end of 2022, and the remaining 20000 tons of lithium hydroxide capacity will be started after phase I is put into operation. The 11000 ton lithium chloride and its products project has been started. By 2025, the company’s comprehensive capacity of lithium salt products will reach more than 100000 tons.
Also benefiting from the dual main business drivers of civil explosion and lithium salt business, the 2021 performance express disclosed by the company on February 21 is also bright.
The company estimates that the total operating revenue in 2021 will be 5.233 billion yuan, with a year-on-year increase of 60.99%; The net profit attributable to the parent company was about 925 million yuan, with a year-on-year increase of 185.5%; At the same time, the deduction of non net profit increased by more than twice.
the volume and price of lithium salt products rise simultaneously
In recent years, Sichuan Yahua Industrial Group Co.Ltd(002497) has gradually increased its lithium salt business and is gradually becoming a front-line enterprise in the lithium industry.
Since last year, benefiting from the explosive growth of new energy vehicles, lithium salt prices have continued to hit a record high, which has also effectively thickened the company’s profits.
Since February 2021, China’s lithium hydroxide has increased by more than 500%.
Since February 2021, battery grade lithium carbonate has increased by more than 400%.
According to Baichuan information monitoring, at present, China’s lithium hydroxide Market is still in short supply. The circulation of battery lithium hydroxide on the market is limited, the overall shipment is less, and the supply of goods is difficult to find. Its price is expected to continue to rise in the near future.
According to Soochow Securities Co.Ltd(601555) , the global effective supply of lithium carbonate will be about 750000 tons in 2022. Among them, 170000-200000 tons are newly supplied, which should meet the supply capacity of about 280 GWH batteries and meet the demand growth of about 60% of electric vehicles. In addition, from 2020 to 2021, the industry digested a large amount of previous inventory. This year, the supply of lithium carbonate is in a tight balance, and the price will continue to rise.
It is reported that in addition to the continuous expansion of smelting capacity, the company’s lithium salt customer structure is also continuously optimized. The client has been successfully embedded into global high-quality supply chains such as Tesla, Panasonic and LG, which confirms the excellent product quality of the company. With the continuous volume of overseas high nickel models in the future, the company’s performance will be released quickly.
At the same time, the company actively expands the layout of upstream lithium resources to provide guarantee for lithium salt production and strengthen its own industrial chain advantages.
In terms of upstream raw material procurement, the company renewed the lithium concentrate off take agreement with Galaxy lithium, and the annual procurement volume will not be less than 120000 tons by 2025. Lijiagou spodumene has an annual output of more than 170000 tons. After the implementation of the lithium concentrate mining and processing project, it will give priority to the production of Guoli company. Guoli company now has a lithium salt production capacity of about 17000 tons, and the demand for lithium concentrate under full production is expected to be about 135000 tons.
At the same time, the company is the largest shareholder of core company. After production, the company’s FeNiS project will purchase and manufacture 75000 tons of lithium oxide concentrate every year.
In addition, the company cooperates with Eastern iron industry to develop trigger Hill project and enjoys the priority of product procurement. The feasibility study scheme has not been announced.
Recently, Sichuan Yahua Industrial Group Co.Ltd(002497) also said on the investor interaction platform that the lithium resources currently available to the company can meet the normal production, and the company will also find more lithium resources through various channels to ensure the needs of lithium salt capacity expansion in the future
