Yahua Group made a net profit of 330 million in the first half of the year and achieved revenue of 836 million from lithium salt materials.

On August 30th, Ya Hua Group (002497) released its semi-annual report for 2021. In the first half of this year, the company achieved operating income of 2.124 billion yuan, an increase of 64.35% over the same period last year. The net profit belonging to shareholders of listed companies was 330 million yuan, up 151.01% from the same period last year.

According to the semi-annual report, Ya Hua Group has formed a trend of joint development of civil explosion industry and lithium industry. In the lithium industry, the company has three production sites of lithium industry science and technology and national management company, Xingsheng lithium industry and Ya'an lithium industry, specializing in the research and development, manufacture, sales and trade of lithium salt products, the main products include battery-grade lithium hydroxide, battery-grade lithium carbonate and so on, which are widely used in new energy, medicine and new materials.

In the first half of this year, the revenue of lithium salt materials of Yahua Group reached 836 million yuan, an increase of 257.22% over the same period last year, accounting for 39.36% of the operating revenue.

Ya Hua Group said that the income and profits of its subsidiaries Lithium Technology and Ya'an Lithium Industry increased significantly compared with the same period last year, mainly due to the strong demand for lithium salt market in the context of vigorously developing the new energy vehicle industry. Lithium salt product prices are rising, lithium business profits have increased significantly, thus improving the overall operating performance of the company.

According to the analysis of Caixin Securities Research report, the lithium hydroxide production capacity of Yahua Group is the third in the world, the second in China, and second only to Ganfeng lithium industry in China. The company has many high-quality customers in the industry, and has reached a good cooperative relationship with Umicor, Zhenhua New Materials, Beitre, BYD, Xiamen Tungsten Industry and other high-quality customers. The company issued an announcement on December 30th, 2020. the Ya'an Lithium Industry Co., Ltd., a wholly-owned subsidiary of Ya'an, signed a supply contract for battery-grade lithium hydroxide with Tesla of the United States, agreeing to start from 2021 to 2025. Tesla buys battery-grade lithium hydroxide products with a total value of US $630 million-US $880 million from Ya'an Lithium Industry.

According to the information of the research activities of Yahua Group on July 23rd, the company currently has a total production capacity of about 43000 tons of lithium salt products, and is preparing to use non-public offerings to raise funds to build a new project of 50, 000 tons of battery-grade lithium hydroxide and 11000 tons of lithium chloride and its products. The project has started construction, and by 2025, the company's comprehensive production capacity of lithium products will reach more than 100000 tons.

While continuously expanding the scale of lithium salt processing capacity, in order to ensure the production of the existing production line of lithium business and the expansion of subsequent production lines, Ya Hua Group also expanded the supply of lithium resources through multiple channels.

At present, Ya Hua Group has renewed the lithium concentrate off-take agreement with Galaxy Lithium Industry, and the implementation period of the agreement has been extended to 2025. Galaxy Lithium Industry provides no less than 120000 tons of lithium concentrate every year according to our production needs. Yahhua International has the right of preemption under the same conditions. In addition, the Lithium Industry which the company participates in owns the mining right of Lijiagou spodumene mine. According to the agreement, the lithium concentrate mined and processed by Lijiagou Lithium Mine in the future will give priority to the production of the State Management Company. In addition, the company participates in Core of Australia and signs an off-take agreement for lithium concentrate. Core has completed the final feasibility study. Its lithium mine has lower mining costs and higher mining value, and Core will also speed up the mining process. The company said that it will continue to seek cooperation with other domestic and foreign lithium mines and salt lakes to actively expand the reserves of upstream lithium resources.