Yahua Group(002497) 华福证券·2025-02-24 13:33Investment Rating - The report gives a "Buy" rating for the company, marking its first coverage [5][6]. Core Views - The company operates with a dual business model focusing on civil explosives and lithium, providing both stability and growth potential. The civil explosives business has shown steady growth, while the lithium segment offers significant growth elasticity [3][4][5]. Summary by Sections Company Overview - The company started with civil explosives and has expanded into the lithium industry through acquisitions. It has two major self-owned lithium mines and a lithium salt production capacity of 73,000 tons. The civil explosives business has a CAGR of 12.3% from 2010 to 2023, while the lithium business has a CAGR of 116% from 2014 to 2023 [3][4][15]. Lithium Business - The company has a rich supply of lithium ore, ensuring resource availability for lithium salt production. It holds stakes in several lithium mines, including a 27.9% stake in the Li Jiagou spodumene mine and a 60% stake in the Kamativi mine in Zimbabwe. The Kamativi project is expected to produce 350,000 tons of lithium concentrate annually by late 2024, increasing the company's self-sufficiency in lithium to 60% [4][87][90]. Civil Explosives Business - The company has a market share of over 5% in industrial explosives and over 10% in electronic detonators. It operates 20 production sites in China and has expanded internationally through acquisitions. The civil explosives business has shown stable growth, contributing to the company's long-term cash flow [4][29][68]. Financial Forecast and Investment Advice - The company is projected to achieve a revenue CAGR of 30% from 2024 to 2026, with net profit CAGR expected to be 106%. The estimated net profits for 2024, 2025, and 2026 are 320 million, 990 million, and 1.37 billion yuan, respectively. The report highlights the company's valuation attractiveness, with projected P/E ratios of 45, 15, and 11 for the same period [5][10][12].