Sichuan Yahua Industrial Group Co.Ltd(002497) consecutive good! A week ago, the company just released two “burst” performance Announcements: the net profit in the first quarter of 2022 increased by more than 10 times year-on-year, and the net profit in 2021 increased by 185.50% year-on-year. On the evening of February 27, the company made another positive move: the company’s subsidiary plans to subscribe for 3.4% shares of aby company in Australia.
The core assets of aby company are mainly the kenticha lithium mine in Ethiopia. The lithium resource scale of kenticha lithium mine is comparable to the pegmatite of talison, wodgina and other projects in Australia.
lock the exclusive right of lithium concentrate
Sichuan Yahua Industrial Group Co.Ltd(002497) 2 announced on the evening of 27 February that the company’s wholly-owned subsidiary Yahua International Investment Development Co., Ltd. plans to subscribe for 3.7 million shares of aby company in Australia at the price of a $0.75 per share, accounting for 3.4% of the total share capital of aby company before IPO. On February 27, the two sides signed the investment and share subscription agreement and the purchase and sale agreement.
Aby company is a battery metal company registered in Australia and has mineral resources in African countries such as Sudan and Ethiopia. The founder and core team of aby company have rich experience in the development of major mines in Africa, and the core assets are mainly kenticha lithium mine in Ethiopia (holding 51% equity).
According to the announcement, the mining of kenticha lithium mine began in 1990. The area has highly mineralized lithium cesium tantalum (LCT) pegmatite. It has proven 67.4 million tons of lithium resources and the average grade of lithium oxide is 1.03%. It is further exploring and developing. The total mineralized resources range from 80 million tons to 11000 tons of lithium resources, equivalent to more than 1 million tons of lithium oxide; The resources in the southern and Northern reserves have great potential for future growth, and the overall resource scale can be comparable to the pegmatites of talison, wodgina and other projects in Australia.
Source: Sichuan Yahua Industrial Group Co.Ltd(002497) announcement
The overall technical and operation team of kenticha lithium mine comes from the former Galaxy lithium industry in Australia and has long-term good cooperation with Sichuan Yahua Industrial Group Co.Ltd(002497) the lithium concentrate of phase I 200000 t / a (converted into 30000 T / a of lithium carbonate equivalent) production line will be delivered in the second quarter of 2023, and the mine life is expected to exceed 18 years.
According to the agreement, aby company develops the kentica project in Oromia state in southern Ethiopia and sells and delivers lithium concentrate products to Yahua international. Aby company provides no less than 120000 tons of lithium concentrate every 12 monthly contract years. If aby company has excess lithium concentrate in the future, both parties can provide additional lithium concentrate for Yahua international under the conditions agreed in writing.
Sichuan Yahua Industrial Group Co.Ltd(002497) said that the pre IPO equity subscription aims to lock in the lithium concentrate underwriting right of the kentica project and provide sufficient lithium resources for the future development of the company’s lithium industry.
multi channel lithium reserve
Sichuan Yahua Industrial Group Co.Ltd(002497) is reserving lithium resources through various channels, and the existing lithium resources can meet the company’s lithium salt production needs in 2022.
On the evening of December 14, 2021, Sichuan Yahua Industrial Group Co.Ltd(002497) announced that Yahua international, a wholly-owned subsidiary of the company, intended to subscribe for 80 million shares of EV Resources Co., Ltd. in Australia at a price of a $0.045 per share, accounting for 9.5% of the total share capital of EV company. EV company owns lithium resource projects such as Xiaohe lithium tin tantalum project in Australia, weinbeni project in Austria and lithium mine in the eastern Alps. The main purpose of EV company’s equity subscription is to cooperate with EV company to jointly develop its existing lithium mine resources.
Meanwhile, Sichuan Yahua Industrial Group Co.Ltd(002497) renewed the lithium concentrate underwriting agreement with Galaxy lithium until 2025. Galaxy lithium provides no less than 120000 tons of lithium concentrate according to the company’s production needs every year; The company also took shares in core, an Australian listed company, and signed a lithium concentrate underwriting agreement. At present, core has started mine construction. Its lithium ore has low mining cost and high mining value. It is expected to be mined in the fourth quarter of 2022.
Sichuan Yahua Industrial Group Co.Ltd(002497) participating energy investment lithium has the priority right to supply Lijiagou spodumene mine. According to the agreement, the lithium concentrate mined and processed by Lijiagou spodumene mine in the future will give priority to the production and supply of Guoli company, a holding subsidiary of the company.
In January 2022, Sichuan Yahua Industrial Group Co.Ltd(002497) when communicating with the organization, said that the current lithium resource supply channel can meet the company’s lithium salt production needs in 2022. The company is also continuing to follow up other lithium mines and Salt Lake projects outside China, actively layout upstream lithium resources, master the control over lithium resources, and establish a rich and stable lithium resource guarantee system for the company’s future lithium salt capacity expansion.
first quarter net profit increased by more than 10 times year-on-year
Since 2021, the prosperity of lithium industry has been continuously improved, new energy vehicles have developed rapidly, the demand for lithium products has continued to grow, the price of lithium salt has risen all the way, and the hot market has continued to this day.
According to the bulk list data of business society, as of February 24, 2022, the average price of industrial lithium hydroxide in China was 383300 yuan / ton, an increase of 39.39% compared with the price on February 1, 2022. Lithium hydroxide analysts of business society believe that at present, the rise of upstream lithium carbonate has boosted market confidence. Combined with the tight balance between supply and demand, it is expected that China’s industrial lithium hydroxide market may be dominated by strong operation in the short term.
Source: Official Website of business society
Driven by the big market, Sichuan Yahua Industrial Group Co.Ltd(002497) handed over a beautiful report card. On the evening of February 21, 2022, Sichuan Yahua Industrial Group Co.Ltd(002497) released the performance forecast of the first quarter of 2022 and the annual performance express of 2021. The performance forecast for the first quarter of 2022 shows that the company expects to realize a net profit of RMB 900 million-1.2 billion attributable to shareholders of listed companies from January to March 2022, with a year-on-year increase of 105367% – 143822%. The profit in the first quarter alone is expected to exceed the net profit for the whole year of 2021.
Source: Sichuan Yahua Industrial Group Co.Ltd(002497) announcement
The 2021 annual performance express shows that the company achieved a total operating revenue of 5.233 billion yuan in 2021, a year-on-year increase of 60.99%; The net profit attributable to the shareholders of the listed company was 925 million yuan, a year-on-year increase of 185.50%; The basic earnings per share is 0.81 yuan.
Source: Sichuan Yahua Industrial Group Co.Ltd(002497) announcement
On February 21, Sichuan Yahua Industrial Group Co.Ltd(002497) share price soared by 8.72%. After that, the limit rose for two consecutive trading days.
Anxin Securities said that Sichuan Yahua Industrial Group Co.Ltd(002497) 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 plans to work with Xtc New Energy Materials(Xiamen) Co.Ltd(688778) to layout lithium iron phosphate. The company may explore the road of industrial chain integration and continue to be optimistic about the development prospect of the company.
