\u3000\u3000 Sichuan Yahua Industrial Group Co.Ltd(002497) (002497)
The company's main business includes civil explosive business and lithium business, as well as transportation and other businesses. 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, we will actively allocate lithium resources, and the lithium salt smelting capacity may continue to increase. 1) The company underwrites MT cattlin lithium mine, shares Lijiagou lithium mine, shares core and locks in the sales volume of 75000 tons. It plans to jointly develop trigger Hill Lithium Tantalum project with Eastern iron. At the same time, 2021q4 shares EV company and makes a long-term layout around lithium resources. 2) 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 industrial and product structure of the civil explosive industry continues to be optimized, or there is still room for increment, and the replacement of electronic detonators is expected to accelerate. (1) According to the safety development plan of the civil explosives industry during the 14th Five Year Plan period, the supply side structural reform of the civil explosives industry will continue to be deepened and the industry structure will be continuously adjusted and optimized during the 14th Five Year Plan period. Comprehensively promote industrial digital electronic detonators. In addition to reserving a small amount of production capacity for export or other licensed special purposes, the production and sales of ordinary industrial detonators will be stopped before the end of June 2022 and August 2022. We will continue to increase the proportion of the permitted production capacity of on-site mixed explosives of enterprises, and the proportion will be increased from 30% to 35%. (2) The company's explosives are mainly used for the mining of coal, metal and non-metal mines, which account for more than 70% of the total sales of civil explosives. At present, with the support of the steady growth policy, infrastructure investment may increase steadily. At the same time, the prices of upstream metal and non-metallic raw materials may continue to stimulate capital expenditure, and there may still be incremental space for the demand for civil explosives. (3) As the main direction of product structure adjustment during the 14th Five Year Plan period, the output of electronic detonators may show an increasing trend, Sichuan Yahua Industrial Group Co.Ltd(002497) as a leading enterprise in the industry, it may benefit from the continuous improvement of penetration rate. The output of electronic detonators continued to rise in 2021. By 2021, the output of electronic detonators in China was 164 million, accounting for 18.43% of the output of industrial detonators. The concentration of electronic detonators also shows an increasing trend. In 2021, the production and sales of Sichuan Yahua Industrial Group Co.Ltd(002497) electronic detonators ranked first in China. In 2021, the production capacity of Sichuan Yahua Industrial Group Co.Ltd(002497) electronic detonators was about 54 million. According to the statistics of China blasting Association, Sichuan Yahua Industrial Group Co.Ltd(002497) has Mianyang industry and Jiyang company, with a total output of 30.33 million and a total sales volume of 30.49 million, accounting for 18.5% and 19.3% of the national production and sales of electronic detonators respectively, ranking first in China.
"Lithium + civil explosion" two wheel drive, the lithium business continues to expand or provide profit growth space, the revenue and expenditure base of the civil explosion industry expands steadily, the company's operating cash flow performance is considerable, or provide support for the company's overall operation. The contribution of civil explosive business to stable cash flow: in 2020, the revenue, cost and gross profit of the company's civil explosive industry (including industrial detonating equipment, explosives and engineering blasting) were 2.49 billion yuan, 1.594 billion yuan and 896 million yuan, accounting for 76.6%, 70.9% and 89.3% of the corresponding projects of the company. From the company's performance disclosure, industrial detonator products are included in the industrial detonating equipment project. In 2020, the income, cost and gross profit of the project are 403 million yuan, 223 million yuan and 180 million yuan, accounting for 16.2%, 14.0% and 20.1% of the corresponding projects in the civil explosive industry. In 2021, in order to ensure normal production and operation, the company increased cash payment for material procurement, and the operating cash flow may drop to a certain extent compared with 2020. However, the total amount of the first three quarters was 124 million yuan, which was still impressive. Lithium business may provide profit growth space: the performance of lithium business increased significantly in 2021. The average prices of SMM battery grade lithium carbonate and lithium hydroxide in the whole year were 121300 yuan / ton and 114100 yuan / ton respectively, with a year-on-year increase of 175.7% and 120.3%. In addition, the 20000 ton lithium hydroxide capacity of Ya'an lithium industry has reached the production capacity, and the gross profit in H1 of 2021 was 239 million yuan, benefiting from the rapid rise of lithium price in the second half of the year, The performance of lithium business in the whole year can be expected. At the same time, the capacity of lithium hydroxide is expected to expand to 83000 tons in the future, or provide profit growth space.
Investment suggestion: the civil explosive business contributes good cash flow, and the equity incentive of lithium business may promote the continuous and large-scale business. At the same time, it is planned to jointly Xtc New Energy Materials( Xiamen) Co.Ltd(688778) layout lithium iron phosphate, or explore the road of industrial chain integration, and continue to be optimistic about the development prospect of the company. We expect that the revenue growth rate of the company from 2021 to 2023 will be 71.2%, 112.6% and 21.9% respectively, and the net profit growth rate will be 185.5%, 166.4% and 26.3% respectively; The investment rating of overweight-a is given for the first time. The six-month target price is 32 yuan, which is equivalent to the dynamic P / E ratio of 14.75 in 2022.
Risk tip: the downstream demand is less than expected, the lithium price fluctuates sharply, and the project progress is less than expected
