Sichuan Yahua Industrial Group Co.,Ltd. (ASX: 002497) disclosed that it received a site visit from several institutional investors, including representatives from GTHT and CICC, on July 7, 2026.

Key Discussion Points from the Investor Meeting

First Half Performance Forecast and Drivers

The company forecasts net profit attributable to shareholders for the first half of the year to be between 1.1 billion and 1.3 billion yuan, representing a year-on-year increase of 710.17% to 857.48%. Adjusted net profit is projected to be between 1.125 billion and 1.315 billion yuan, up by 1392.73% to 1644.84% compared to the same period last year. The second quarter alone is expected to contribute between 760 million and 960 million yuan, a sequential increase of 124.65% to 183.68%.

This significant growth is primarily attributed to the continued rise in lithium salt market prices, coupled with increased sales volume and average selling prices for the company's lithium salt products. Furthermore, the company has enhanced the balance between mining, production, and sales, continuously optimized production efficiency, and strictly controlled production costs, leading to a synchronous improvement in profitability.

Current Lithium Resource Strategy

The company has established a diversified lithium resource supply system comprising self-controlled mines and externally sourced ore. For self-controlled resources, its Kamativi lithium mine in Zimbabwe was fully completed in 2024, achieving an annual ore processing capacity of 2.3 million tonnes, with the produced lithium concentrate already being used in domestic lithium salt production. Additionally, the company holds a priority supply right for lithium concentrate through its stake in the Sichuan Lijiagou lithium mine.

For external sourcing, the company secures offtake rights for lithium ore through long-term agreements with partners such as Australia's Pilbara, Africa's DMCC, Brazil's Atlas, and Brazil's MGLIT. These resources collectively ensure the current lithium salt production needs. The company remains actively engaged in seeking high-quality lithium resource projects to further increase its self-sufficiency rate in lithium concentrate.

Exploration Potential at the Kamativi Mine

The company is currently conducting exploration in the peripheral areas of the Kamativi lithium mine in Zimbabwe. Should subsequent exploration results meet disclosure requirements, the company will promptly fulfill its information disclosure obligations.

Impact of Zimbabwe Export Ban and Concentrate Shipment Status

Existing lithium concentrate inventory is sufficient to ensure normal production requirements for domestic lithium salt. The Kamativi mine maintained normal production during Zimbabwe's export ban period, with output unaffected. Following the acquisition of the necessary export quotas and procedures, shipments to China were initiated promptly and are currently in transit.

Progress on Zimbabwe Lithium Sulfate Plant Construction

KMC in Zimbabwe is accelerating the construction of its lithium sulfate deep-processing project. This project includes a smelter and a lithium sulfate plant, with a designed annual processing capacity of 350,000 tonnes of lithium concentrate, equivalent to 75,000 tonnes of lithium sulfate annually. It is scheduled to commence operations in 2027. Processing concentrate into lithium sulfate before shipping is expected to reduce freight volume and cross-border logistics costs, positively impacting the company's overall cost structure.

Associated Minerals at the Kamativi Mine

The Kamativi lithium mine hosts associated polymetallic minerals, including tin, tantalum, and niobium. KMC is concurrently constructing a tin-tantalum-niobium separation project to achieve comprehensive recovery of mineral resources. This project is expected to be completed and operational in October of this year.

Acquisitions in the Industrial Explosives Segment

A wholly-owned subsidiary, the Industrial Explosives Group, acquired a 51% equity stake in Weifang Longhai Security Technology Co., Ltd. in April 2026. This acquisition further increased the company's industrial explosive production capacity from 260,000 tonnes to approximately 330,000 tonnes, maintaining its leading position within the domestic industry. The company will actively respond to government guidelines for high-quality development in the sector and continue pursuing mergers and integrations to sustain its industry leadership.

Company Overview and Recent Financials

Sichuan Yahua Industrial Group Co.,Ltd. operates two main business segments: lithium and industrial explosives. The lithium business encompasses lithium mining and lithium salt processing. The industrial explosives business is divided into production/operation and blasting services, with additional involvement in hazardous chemical transportation.

According to its Q1 2026 report, the company achieved operating revenue of 2.83 billion yuan, a year-on-year increase of 84.16%. Net profit attributable to shareholders was 339 million yuan, up 310.87% year-on-year. Adjusted net profit reached 357 million yuan, rising 419.73% year-on-year. The debt-to-asset ratio stood at 24.97%, with investment income of 42.35 million yuan and financial expenses of 33.64 million yuan. The gross profit margin was 24.59%.

Over the past 90 days, four institutions have issued ratings on the stock, all being "Buy" recommendations, with an average institutional target price of 42.0 yuan. Financing data shows a net inflow of 264 million yuan into margin financing over the last three months, increasing the margin balance. Securities lending also saw a net inflow of 11.47 million yuan, increasing the securities lending balance.