"the industry has its ups and downs, so thatNationalcasinonodepositbonusWe also took us by surprise. " On the afternoon of May 20, at Yahhua Group (002497) (SZ002497, share price 11Nationalcasinonodepositbonus.06 yuan, with a market capitalization of 127Nationalcasinonodepositbonus.47 billion yuan) at the annual shareholders' meeting in 2023, the company's chairman, Zheng Rong, lamented the lithium industry from 2023 to the present.
A reporter from the Daily Business News noted that in 2022, the price of lithium salt rose all the way up to 600000 yuan per ton. In 2023, there was an imbalance between supply and demand in the market, and the price of lithium salt accelerated to fall, and now it has gradually fallen back to about 110000 yuan per ton. As a company that derives almost 70% of its revenue from the lithium salt business, Yahhua's revenue and net profit both declined in 2023.
Every photo taken by reporter Fan Qianqian
The price of lithium salt has been low since 2024, and there is still great uncertainty about when it will return to high levels through the cycle. In this regard, Zheng Rong believes that in the face of uncertainty, as long as the company does its own thing well, regardless of the wind and waves, it can remain the same. She also stressed that in the face of a difficult environment, the company remained profitable in the first quarter of 2024 and will formulate measures to enhance profitability in 2024 according to market changes.
Provision for impairment of inventory last year
Starting from the traditional civil explosion industry and stepping into the emerging lithium power industry, Ya Hua Group has formed a "double main industry" development trend of lithium industry and civil explosion industry.
According to the disclosure of Yahua Group, in terms of lithium salt, the company focuses on the research and development, production and sales of lithium hydroxide, as well as lithium carbonate production capacity, with a comprehensive design capacity of about 73000 tons. At the same time, the company is currently building Ya'an Lithium Industry Phase III high-grade lithium salt production line construction project by stages.
For lithium salt enterprises, the self-sufficiency rate of lithium ore resources determines the ability of cost control and the competitiveness of future development. In recent years, Ya Hua Group has also been expanding the supply of lithium resources through a variety of channels, including obtaining underwriting rights and holding lithium ore resources.
One of the most watched by the market is its self-controlled Kamativi lithium mine project in Zimbabwe. It is reported that the first stage of the lithium ore mining and separation project with an annual output of 2.3 million tons has been completed and put into production, and the first batch of goods will be transported to China soon; the second phase will be completed and put into production within 2024. According to the plan disclosed by the company, the completion and commissioning of the second phase of the project in 2024 will achieve an annual supply of more than 350000 tons of self-controlled lithium concentrate, and the self-sufficiency rate of lithium concentrate will exceed 60%.
It is well known that the price of lithium salt gradually fell from a high in 2023 after a rise in 2022, which also affected the performance of Yahhua Group in 2023 to some extent. In 2023, Yahua Group's revenue was 11.895 billion yuan, down 17.72%, and its net profit was 40.2147 million yuan, down 99.11% from the same period last year. Revenue from the lithium business, which accounts for nearly 70 per cent of revenue, fell 26.15 per cent year-on-year, and gross profit margin fell more than 43 percentage points year-on-year.
"Lithium salt products (prices) experienced a roller coaster last year.NationalcasinonodepositbonusThe impact of our profits is very big. " Zheng Rong said at the shareholders' meeting that at the same time, because the company bought lithium ore at a high price, the cost of inventory also lost a lot of money, and the company also prepared for inventory impairment in 2023. According to the annual report, the inventory price of Ya Hua Group lost 1.161 billion yuan in 2023.
The price of lithium salt is still low at present.
As for the reasons for the decline in lithium salt prices since 2023, Ya Hua Group has also analyzed in the annual report that the global release of lithium resources has accelerated, while downstream demand has not increased synchronously, the growth rate of new energy vehicles has slowed down, and the growth rate of energy storage has been lower than expected. as a result, the lithium industry chain has fallen into a phased oversupply, lithium ore prices have continued to fall, and the spot price of lithium carbonate has fallen by more than 80%.
In the first quarter of 2024, the price of lithium salt was still at an all-time low, and Yahhua's performance was still down from a year earlier, but its net profit remained profitable. "We also made a profit in the first quarter of this year. With the changes in the market, this year we will also formulate some corresponding measures to enhance profitability. " Zheng Rong said.
"the industry has a lot of ups and downs, which takes us by surprise." In Zheng Rong's view, in the face of uncertainty, as long as the company does its own thing well, regardless of the wind and waves, it can remain the same. And Yahua Group has a characteristic, that is, it will not participate more in the hype of the capital market, will strictly implement in accordance with the normative requirements of listed companies, maintain the principle of caution, and ensure adequate cash flow.
With regard to the future trend of the lithium industry, Dong Mi Zhai Xiongying of Ya Hua Group believes in the exchange that at this stage, many lithium salt or lithium mining enterprises are facing suspension of production, and the industry will certainly move towards a new balance in the future. in other words, the whole industrial chain enterprises of lithium electricity, including lithium ore, lithium salt, positive and negative materials, can make money, and the new balance also means new prices.
He analyzed that at the current price of 110000 to 120000 yuan per ton of lithium salt, there will be a little profit for lithium salt production enterprises, but it will not be as high as before; for lithium mining enterprises, if the mining cost is high, it may not necessarily make money, so it is possible to stop production, and there are not many mines with low mining costs, which means that lithium ore prices will certainly rise again, thus forcing lithium salt prices to rise.
"as for when this balance will come, the market is an invisible grasp, it is constantly leaning in this direction, but the future must be in this direction." Zhai Xiongying said.