\u3000\u3 China Vanke Co.Ltd(000002) 497 Sichuan Yahua Industrial Group Co.Ltd(002497) )
Civil explosion is the shield and lithium industry is the spear Yahua double main industry layout. Yahua was founded in 1952 and listed on Shenzhen Stock Exchange in 2010. At present, a dual main business layout of civil explosion + lithium salt business has been formed. Among them, the civil explosives business focuses on the R & D, production and sales of various civil explosives, provides customers with specific engineering blasting schemes, and has a professional transportation company, which can provide customers with safe and fast dangerous goods transportation services. At present, the lithium business has a lithium salt production capacity of 43000 tons. In the long term, it is planned to expand the production of 50000 tons of lithium hydroxide and 11000 tons of lithium chloride in Ya’an phase II. The total capacity of lithium salt is expected to exceed 100000 in 2025.
Core concern of the market: will lithium hydroxide be surplus in 22-23 years?
Iron lithium has no modularization to improve the energy density, and is favored by auto enterprises in the short term by virtue of cost advantage. We expect that lithium iron phosphate will remain hot next year, but subject to the carbon coating patent in Quebec, Canada, the demand for lithium hydroxide 22 will remain firm. At the same time, in the short term: the implementation of the US subsidy act in 22 years is expected to achieve large production and marketing of new energy vehicles, and electric SUVs and pickups will significantly drive the demand for high nickel ternary batteries next year. In the medium term, the rapid development of iron and lithium forces ternary to move towards high nickel, and the improvement of high nickel permeability is expected to continue to drive the demand for lithium hydroxide.
Where will lithium hydroxide processing go?
It is true that the short-term shortage of lithium ore is the core constraint of lithium hydroxide processing enterprises, but we believe that under the wave of blindly pursuing “mining is good” in the market, the genes of lithium hydroxide processing enterprises still belong to the manufacturing industry and are not good at upstream resource development. In the long term, capex of lithium hydroxide processing enterprises will still focus on capacity expansion and technology improvement. From the perspective of the development of lithium hydroxide processing industry, we believe that the long-term trend of lithium hydroxide industry will be divided into two main lines: 1) lithium hydroxide will move towards high refinement, and lithium hydroxide processing enterprises with know-how barriers and bound to the downstream industrial chain will enjoy a premium. 2) Lithium hydroxide processing will have a global layout, and enterprises with strong global management ability will be better.
Why are we firmly optimistic about elegance?
1) in the short term, the upstream of Yahua has locked in mineral resources such as Galaxy resources, core and Lijiagou. At the same time, the downstream is deeply bound to Tesla and actively expand production. Only lithium hydroxide processing enterprises with long-term supply of high quality and stable output can pass the certification of head battery factory / OEM factory. Enterprises that deeply bind the downstream industrial chain and expand production synchronously with matching large customers in the long term should enjoy a premium.
2) Yahua has gradually developed from a single civil explosive plant in Sichuan to a global civil explosive leader with subsidiaries such as red bull of New Zealand and Yahua Australia, which is enough to show its global multi territorial production and management capacity. Compared with the rest of China’s lithium hydroxide layout focusing on a single lot, Yahua is expected to achieve global high-quality lithium hydroxide production and operation with the help of its years of global manufacturing and management experience in civil explosion.
Investment suggestion: considering the expansion of Ya’an, we predict that the net profit attributable to the parent company in 20222023 will be 4.052/4.978 billion respectively, corresponding to pe10x / 8x, giving 15x for 22 years, corresponding to the stock price of 52.8 yuan, and giving a “buy” rating for the first coverage.
Risk tip: the risk of repeated epidemic, the risk that the sales volume of new energy vehicles is lower than expected, the risk of lithium price falling, and the risk of abnormal stock price fluctuation.
