On the evening of April 25th, Sichuan Yahua Industrial Group announced that due to the growing demand for lithium salt products, in order to continue to meet the needs of downstream customers, it is proposed to make appropriate adjustments to its original investment project, "additional annual production of 20, 000 tons of battery-grade lithium hydroxide, 11000 tons of lithium chloride and its products", increasing the capacity of battery-grade lithium hydroxide from the initial 20, 000 tons to 50, 000 tons, the latter remains unchanged.
It is reported that after the adjustment of the project, the construction will be divided into two phases, with a total investment of 2.362 billion yuan, of which the first phase will build a 30, 000-ton battery-grade lithium hydroxide production line with a construction time of 2 years; the second phase will build a production line of 20, 000 tons of battery-grade lithium hydroxide and 11000 tons of lithium chloride and its products, and start construction after the first phase reaches production, with a construction time of 2 years. After the project reaches production, it will achieve an annual sales income of 4.487 billion yuan and an average annual net profit of 583 million yuan.
Public data show that the lithium business of Yahua Group is mainly the research and development, production and sales of deep-processed lithium products, including battery-grade lithium hydroxide, battery-grade lithium carbonate and other lithium products.
On the same day, Yahua Group also released its annual report for 2020, which showed that the company achieved revenue of 3.25 billion yuan in 2020, an increase of 1.67% over the same period last year. Net profit belonging to shareholders of listed companies was 324 million yuan, up 351.79% from the same period last year.
According to the annual report of Yahua Group, the lithium industry was affected by the epidemic in the first half of 2020, the operating rate of cathode material factory was low, the price of lithium salt products continued to fall, most enterprises in the industry had operational difficulties, demand did not increase in the second half of the year, and prices continued to fall. With the increase in domestic production and sales of new energy vehicles and electric bicycles in September, lithium carbonate prices began to rise, and the industry gradually came out of the trough. This is also shown incisively and vividly in the historical price trend of SMM metals. Take battery-grade lithium carbonate as an example, according to the historical price of SMM, the price of battery-grade lithium carbonate has been falling since 2020, reaching the lowest point around July 27, 2020, and did not begin to rise steadily until near the end of the year, and finally reached the highest point on April 7, 2021, with an average price of 90000 yuan / ton. As of April 26, the average price of SMM battery-grade lithium carbonate was 89000 yuan / ton, down 1000 yuan / ton from April 23.
"Click to see more SMM spot prices
Therefore, in the 2020 annual report, even though the production and sales of lithium products of Ya Hua Group showed an upward trend, the income of its lithium business was dragged down by the early epidemic, which was slightly less than that of the public explosion, which accounted for as much as 70% of the income of the private explosion business of Ya Hua Lithium.
However, it is worth mentioning that on April 12, Ya Hua Group announced that thanks to the effective control of the domestic epidemic and the pull of the internal circular economy, the company's two main industries, civil explosion and lithium industry, showed a good trend of development. as a result, the net profit in the first quarter of 2021 is expected to be 77.324 million yuan to 80.298 million yuan, an increase of 1200% over the same period last year.
In addition, in the second half of 2020, with the increasing popularity of the field of new energy vehicles, at the end of 2020, Yahua lithium industry successfully cut into the supply chain of international well-known car companies, and established close cooperative relations with a number of world-renowned new energy vehicle companies, including BMW, Volkswagen and BYD, and has since entered the fast track of the development of the new energy industry.
While announcing the adjustment program, the company explained that "with the continued growth in sales of new energy vehicles in the future, the company's major customers will also plan to add new capacity, resulting in a significant increase in the demand for battery-grade lithium hydroxide."
And indeed, thanks to the popularity of new energy vehicles, battery-grade lithium hydroxide has soared since the end of 2020. as of April 26, the average price of battery-grade lithium hydroxide was 80000 yuan / ton, up 61.6 percent from the beginning of 2020.
"Click to see more historical prices of SMM Metals.
For the future price trend of lithium hydroxide, SMM expects that, taking into account the recent lithium hydroxide smelter quotation has not significantly improved, coupled with less trading volume, the market transaction price has stabilized. In addition, the price difference between lithium carbonate and lithium hydroxide is about to disappear, superposing a small accumulation of lithium hydroxide in March and April, and the upward speed of lithium hydroxide price is expected to slow down. "View details
As of 14:33 on April 26th, Yahua Group rose 1.51 per cent to 18.81yuan per share.
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