Yahua Group(SZ:002497) KAIYUAN SECURITIES·2025-10-31 14:42Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown significant growth in Q3, with a quarter-on-quarter net profit increase of 271.83%. The report maintains a positive outlook on the company's long-term growth potential, driven by the recovery of lithium prices, increased self-sufficiency in lithium concentrate, and ongoing expansion in the overseas market for civil explosives [6][7]. Financial Performance Summary - For the first three quarters of 2025, the company achieved revenue of 6.047 billion yuan, a year-on-year increase of 2.07%, and a net profit attributable to the parent company of 334 million yuan, up 116.02% year-on-year. In Q3 alone, revenue reached 2.624 billion yuan, a year-on-year increase of 31.97% and a quarter-on-quarter increase of 39.17%. The net profit for Q3 was 198 million yuan, reflecting a year-on-year increase of 278.06% and a quarter-on-quarter increase of 271.83% [6][7]. Lithium Product Development - The company has successfully developed a new process for synthesizing lithium sulfide using a gas-solid method, which is expected to lead to the construction of a pilot line for lithium sulfide in 2026. This advancement is anticipated to enhance the company's long-term growth prospects [8]. Market Conditions - In Q3 2025, lithium salt prices rebounded significantly due to the suspension of some lithium mines in Jiangxi and the gradual release of production from the company's Zimbabwe Kamativi lithium mine. The average market price for industrial-grade lithium carbonate rose from 63,500 yuan/ton in Q2 to 71,100 yuan/ton in Q3, a quarter-on-quarter increase of 12.03%. The battery-grade lithium carbonate price also increased from 64,600 yuan/ton to 72,400 yuan/ton, reflecting a similar growth trend [7]. Future Earnings Projections - The report maintains its earnings forecast for the company, projecting net profits attributable to the parent company of 580 million yuan, 870 million yuan, and 1.202 billion yuan for 2025, 2026, and 2027, respectively. The expected earnings per share (EPS) for these years are 0.50 yuan, 0.75 yuan, and 1.04 yuan, with corresponding price-to-earnings (P/E) ratios of 40.4, 26.9, and 19.5 times [6][9].