Market Overview - The chemical products sector increased by 1.38% on October 29, with JinHua New Materials leading the gains [1] - The Shanghai Composite Index closed at 4016.33, up 0.7%, while the Shenzhen Component Index closed at 13691.38, up 1.95% [1] Top Performers - JinHua New Materials (Code: 920015) closed at 62.92, up 30.00% with a trading volume of 135,600 shares and a turnover of 746 million [1] - WeiLan Bio (Code: 603739) closed at 15.51, up 10.00% with a trading volume of 96,900 shares and a turnover of 148 million [1] - YiNuoWei (Code: 920261) closed at 16.34, up 7.08% with a trading volume of 48,000 shares and a turnover of 75.93 million [1] Underperformers - XianFeng New Materials (Code: 300163) closed at 4.61, down 7.62% with a trading volume of 1,672,400 shares and a turnover of 787 million [2] - JinJi Co., Ltd. (Code: 300798) closed at 7.63, down 5.92% with a trading volume of 230,600 shares and a turnover of 178 million [2] - KaiLi New Materials (Code: 6888889) closed at 41.10, down 5.30% with a trading volume of 40,900 shares and a turnover of 170 million [2] Capital Flow - The chemical products sector experienced a net outflow of 84.36 million from institutional investors, while retail investors saw a net inflow of 87.49 million [2][3] - Major stocks like KaiMeiTeQi (Code: 002549) had a net inflow of 200 million from institutional investors, while DeMeiHuaGong (Code: 002054) saw a net outflow of 155 million [3]

Group 1 - The chemical sector experienced a significant rally on October 29, with the chemical ETF (516020) rising by 2.8% during the trading day [1][2] - Key stocks in the sector included Guangdong Hongda and Yuntianhua, both of which surged over 7%, while Yangnong Chemical increased by over 6% [1][2] - The Ministry of Industry and Information Technology emphasized the need for systematic development of next-generation battery technologies, including solid-state batteries, which is expected to enhance the competitive position of Chinese companies in the global market [1][3] Group 2 - Solid-state batteries are seen as a core direction for next-generation power batteries, offering advantages such as high energy density and safety, which could accelerate the replacement of traditional lithium-ion batteries [3] - As of October 28, the price-to-earnings ratio of the chemical ETF's underlying index was 20.08, indicating a low valuation compared to the past decade, suggesting a favorable long-term investment opportunity [3] - Analysts predict structural optimization in supply, with domestic policies frequently addressing supply-side requirements, while international uncertainties may impact chemical supply chains [4] Group 3 - The chemical industry is expected to enter a recovery phase, with low inventory levels and gradually improving demand, leading to a potential rebound in profitability [5] - The chemical ETF (516020) tracks the CSI segmented chemical industry index, with nearly 50% of its holdings in large-cap stocks, providing investors with exposure to leading companies in the sector [5] - The macroeconomic price index is anticipated to improve post-2025, which may stabilize chemical prices and support the overall industry [4][5]

Core Insights - The report from the fund managed by Zhu Shaoxing under the Fuqua Fund indicates a net value growth rate of 15.18% over the past year [1] Fund Holdings Summary - New additions to the top ten holdings include Zhongchuang Zhiling, Luxshare Precision, and Guoci Materials, while Ningbo Bank remains the largest holding at 5.47% [1] - The fund has reduced its positions in major stocks such as Midea Group, Guangdong Hongda, and Blue Sky Technology, which have exited the top ten holdings [1] Detailed Holdings Changes - Zhongchuang Zhiling (601717): New entry with 26 million shares valued at 646 million [1] - Luxshare Precision (002475): New entry with 10 million shares valued at 647 million [1] - Guoci Materials: New entry with 22 million shares valued at 491 million [1] - Ningbo Bank (002142): Reduced by 1.96% with 50 million shares valued at 1.321 billion [1] - Kweichow Moutai: Reduced by 15.0% with 850,000 shares valued at 1.227 billion [1] - CATL (300750): Increased by 8.0% with 2.7 million shares valued at 1.085 billion [1] - Jerry Holdings (002353): Increased by 23.33% with 18.5 million shares valued at 1.03 billion [1] - Spring Power: Reduced by 35.59% with 3.2203 million shares valued at 864 million [1] - Binjiang Group: Reduced by 5.66% with 50 million shares valued at 628 million [1] - Ruifeng New Materials: Reduced by 27.54% with 10 million shares valued at 530 million [1]

Core Insights - The company reported Q3 2025 results with revenues, net profit attributable to shareholders, and net profit excluding non-recurring items at 1.4552 billion, 653 million, and 643 million yuan respectively, showing year-on-year growth of 55.92%, 0.54%, and 5.49% [1] - In Q3 2025, the company achieved revenues, net profit attributable to shareholders, and net profit excluding non-recurring items of 540.1 million, 149 million, and 161 million yuan respectively, reflecting year-on-year changes of +44.14%, -36.93%, and -29.69% [1] - Profit performance was impacted by expenses and impairment provisions, with a credit impairment provision of 70 million yuan in Q3 2025, which affected overall profitability [1] Financial Performance - The company's gross profit margin in Q3 2025 was 20.07%, a decrease of 0.8 percentage points year-on-year, indicating relatively stable profitability [1] - Management expenses increased by 86 million yuan quarter-on-quarter, attributed to higher depreciation and overseas travel costs [1] Business Segment Insights - The mining service business faced revenue growth challenges due to declines in coal production in Xinjiang and overseas projects, with coal production in Xinjiang down by 13.8%, 10.5%, and 6.9% year-on-year for July to September 2025 [2] - The company has over 35 billion yuan in hand orders for its mining service business as of October 2025, with expectations for revenue recovery in Q4 due to a rebound in coal prices and narrowing production declines [2] - Accounts receivable, inventory, and contract assets grew significantly, with year-on-year increases of 93.86%, 288.71%, and 44.25% respectively [2] Profit Forecast and Investment Rating - The company is projected to achieve revenues of 19.131 billion, 22.274 billion, and 26.286 billion yuan for 2025-2027, with year-on-year growth rates of 40.13%, 16.43%, and 18.01% respectively [3] - Net profit attributable to shareholders is expected to be 1.047 billion, 1.260 billion, and 1.558 billion yuan for the same period, with growth rates of 16.68%, 20.30%, and 23.64% respectively [3] - The current stock price corresponds to PE ratios of 28, 23, and 19 for 2025-2027, maintaining a "strong buy" rating [3]

Group 1 - The report highlights that the Q3 2025 revenue exceeded expectations, with significant growth in overseas markets, particularly in North America, where the company is accelerating store openings [21][22][23] - The company achieved a year-on-year revenue growth of 245%-250% in Q3 2025, with overseas revenue increasing by 365%-370% [21] - The management's confidence is reflected in the recent share purchases by key stakeholders, indicating a positive outlook for future growth [27][29] Group 2 - The report indicates that the company has maintained a strong gross margin, with Q3 2025 gross margin at 55.62%, an increase of 4.42 percentage points year-on-year [31][32] - The company’s revenue for the first three quarters of 2025 reached 1.933 billion yuan, a year-on-year increase of 2.20% [31] - The life sciences segment is expected to drive future growth, with a planned investment of 1.15 billion yuan in a new high-end materials industrial park [33] Group 3 - The report notes that the company has seen a significant increase in net profit, with a year-on-year growth of 0.5% for the first three quarters of 2025, despite challenges in the mining services and defense sectors [36] - The company is actively pursuing a strategy to integrate its civil explosives business and is focusing on military transformation, which is expected to enhance long-term growth prospects [39][41] - The report emphasizes the importance of expanding domestic demand and the potential for increased consumer spending, particularly in the service sector [13][14][16] Group 4 - The optical lens industry is experiencing a shift towards high-end and smart products, with the market for AI smart glasses expected to grow significantly [44][45] - The company is positioned as a leading manufacturer of resin lenses, with a strong focus on R&D and partnerships with global tech firms to develop smart eyewear solutions [43][44] - The report highlights the increasing demand for functional and customized lenses, driven by rising health awareness and changing consumer preferences [44][45]

1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The company is confident in its future development, firmly committed to the strategies of military transformation and international expansion. It will continue to focus on its main business, optimize management, promote industrial mergers and acquisitions, improve asset quality, and strive to enhance performance [26][29]. 3. Summary by Relevant Catalogs 3.1 Research Basic Information - The research object is Guangdong Hongda, belonging to the mining industry, with a reception time of October 24, 2025. The listed company's reception staff includes Deputy General Manager and Board Secretary Zheng Shaojuan, and General Counsel and Investor Relations Director Zhao Guowen [16]. 3.2 Detailed Research Institutions - The research institutions include securities companies such as CICC, Huabao Securities, Guosheng Securities, and fund management companies such as Chuangjin Hexin Fund, Xingye Fund, as well as insurance agencies like Dajia Insurance. A large number of relevant personnel from these institutions participated in the research [17][18][19]. 3.3 Research Institution Proportion No specific proportion data provided. 3.4 Main Content Materials - **Performance in the First Three Quarters of 2025**: The company achieved an operating income of 14.552 billion yuan, a year - on - year increase of 55.92%; the net profit attributable to the parent company was 653 million yuan, basically flat compared to the same period last year; the cash flow from operating activities was - 236 million yuan, compared to 189 million yuan in the same period last year. The revenue growth was mainly due to the expansion of the mining service business and the consolidation of Xuefeng Technology. The slower growth of net profit was due to the relatively low gross profit margin of new projects and the decline in gross profit in some regions. The decrease in cash flow was due to slower collections or changes in payment methods [25]. - **Business Segments**: - **Mining Service**: The business scale is gradually expanding, focusing on key domestic regions such as Xinjiang, Tibet, and Inner Mongolia, and overseas along the "Belt and Road" countries. The current outstanding orders exceed 35 billion yuan and will continue to be steadily fulfilled [25]. - **Civil Explosives**: The production capacity has increased to 725,500 tons, with stable production capacity release and basically the same business scale as the previous year. Industry mergers and acquisitions are being actively promoted [25]. - **Defense Equipment**: The performance of hexogen is good. The acquisition of Dalian Changzhilin was completed at the end of September, and military trade projects are also being actively promoted [25]. - **Q&A Highlights**: - **Mining Service Gross Profit Margin**: The gross profit margin of the mining service segment in the first three quarters decreased year - on - year. This was mainly due to the low - margin new general contracting projects and the impact on gross profit in Xinjiang and overseas projects [26]. - **Overseas Mining Service**: The scale of overseas mining service projects in the first three quarters was basically the same as last year, with slower growth due to project closures. New projects in Congo (Brazzaville) are under construction, and new winning projects will contribute in the next year [27]. - **Accounts Receivable**: The increase in accounts receivable in the first three quarters was due to the consolidation of Xuefeng Technology and the expansion of the mining service business. The company will strengthen project settlement and cash collection [27]. - **Military Industry Acquisition**: The acquisition of Dalian Changzhilin will be reflected in the fourth - quarter financial statements, which is beneficial for product integration and improving the scale of assets, revenue, and profit in the defense equipment segment [28]. - **Overseas Explosives Production Capacity**: The Peruvian explosives factory is under expansion, and the Zambian explosives factory is under construction. Completion will promote business synergy and competitiveness in the local and surrounding areas [28][29]. - **Xinjiang Business**: The company expects the business scale in Xinjiang to continue to grow due to increased investment, new winning projects, and the region's strategic importance [29]. - **Tibet Business**: The mining service projects in Tibet, such as Julong Copper Mine, Yulong Copper Mine, and Baoxiang Lead - Zinc Mine, are operating well and growing steadily [29]. - **Mining Service Order Structure**: The outstanding orders in the mining service segment are mainly for metal mines, followed by coal and sand and gravel aggregates [29]. - **Civil Explosives Production Capacity Acquisition**: The company aims to achieve a production capacity of one million tons of civil explosives and will continue to promote mergers and acquisitions around rich ore areas [29]. - **Performance Outlook**: The company will focus on its main business, optimize management, and strive to improve performance in the fourth quarter and the whole year [29].

Core Viewpoint - The company is expanding its operations in Peru and Zambia, which will enhance its competitiveness in the mining services and civil explosives sectors in these regions [1] Group 1: Expansion Plans - The company's explosives factory in Peru is currently in the expansion phase [1] - The explosives factory in Zambia is under construction [1] - Completion of these projects is expected to significantly improve the company's operational synergy in Peru, Zambia, and surrounding areas [1] Group 2: Market Competitiveness - The expansion and construction efforts will further enhance the company's overall competitiveness in overseas markets [1]

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown a slight increase in net profit attributable to shareholders in the first three quarters of 2025, with a year-on-year growth of 0.5% [6] - The report expresses optimism about the long-term growth of the mining service and defense sectors [6][9] - The company is actively integrating its civil explosives business and is committed to transitioning towards military applications, aiming to become a globally competitive military enterprise [10] Financial Performance Summary - For the first three quarters of 2025, the company achieved operating revenue of 14.552 billion yuan, a year-on-year increase of 55.9% [6] - The net profit attributable to shareholders was 653 million yuan, reflecting a year-on-year increase of 0.5% [6] - The net profit after deducting non-recurring gains and losses was 643 million yuan, up 5.5% year-on-year [6] - The gross profit margin was 19.94%, down 1.42 percentage points year-on-year [6] - The net profit margin was 8.18%, down 1.25 percentage points year-on-year [6] Quarterly Performance Summary - In Q3 2025, the company reported operating revenue of 5.401 billion yuan, a year-on-year increase of 44.1% but a quarter-on-quarter decrease of 1.7% [7] - The net profit attributable to shareholders for Q3 was 149 million yuan, down 36.9% year-on-year and 63.6% quarter-on-quarter [7] - The net profit after deducting non-recurring gains and losses for Q3 was 161 million yuan [7] - The operating cash flow for Q3 was -9 million yuan [7] Investment Highlights - The decline in Q3 net profit is attributed to increased expenses from the consolidation of Xuefeng Technology and the need for business expansion, leading to higher borrowing costs and a decrease in the gross margin of the mining service sector [8] - The company is enhancing its civil explosives business and has made significant strides in military transformation, with a focus on integrating its operations [9][10] - The company aims to become a leading player in the mining service sector and the civil explosives market, with a strong emphasis on military applications [10] Earnings Forecast - The company is projected to achieve operating revenues of 19.953 billion yuan, 25.221 billion yuan, and 28.931 billion yuan for the years 2025, 2026, and 2027, respectively [11] - The net profit attributable to shareholders is expected to be 1.042 billion yuan, 1.307 billion yuan, and 1.705 billion yuan for the same years [11] - The corresponding price-to-earnings ratios are forecasted to be 28, 22, and 17 times for 2025, 2026, and 2027, respectively [10][11]

Financial Performance - The company achieved a revenue of 14.552 billion yuan in the first three quarters of 2025, representing a year-on-year growth of 55.92% [2] - The net profit attributable to shareholders was 653 million yuan, remaining relatively stable compared to the previous year [2] - Cash flow from operating activities was -236 million yuan, a decline from 189 million yuan in the same period last year [2] Business Segments - The mining service segment expanded significantly, driven by new large-scale total contracting projects and the consolidation of Xuefeng Technology [2] - The civil explosives segment's production capacity increased to 725,500 tons, with stable output compared to the previous year [2] - The defense equipment segment showed good performance, with the acquisition of Dalian Changzhilin expected to enhance product integration and competitiveness [5] Market Strategy - The company is focusing on key domestic markets such as Xinjiang, Tibet, and Inner Mongolia, while also expanding its international presence along the "Belt and Road" initiative [2][4] - The company has a backlog of orders exceeding 35 billion yuan, indicating strong future revenue potential [2] Challenges and Risks - The decline in gross margin for the mining service segment is attributed to the lower margins of new total contracting projects and reduced margins in certain regions [3] - Accounts receivable increased significantly due to the consolidation of Xuefeng Technology and the expansion of the mining service segment [4] Future Outlook - The company expects continued growth in its Xinjiang operations, supported by increased investments and new project wins [8] - Plans to enhance operational efficiency and asset quality to mitigate risks associated with accounts receivable [4] - The company remains committed to achieving a million-ton production capacity in the civil explosives sector through strategic acquisitions [11]

Core Viewpoint - The domestic sales of construction machinery in September 2025 continued to grow, with significant recovery in non-excavator categories, and strong export performance, indicating a positive outlook for the industry driven by equipment upgrades and internationalization [1][2][4]. Group 1: Domestic Sales Performance - In September 2025, excavator sales (including exports) reached 19,858 units, a year-on-year increase of 25.4%, with domestic sales at 9,249 units, up 21.5% [1]. - From January to September 2025, excavator sales (including exports) totaled 174,039 units, reflecting an 18.1% year-on-year growth, with domestic sales at 89,877 units, also up 21.5% [1]. - Non-excavator categories showed notable recovery, with loader sales up 25.6%, grader sales up 6.5%, truck crane sales up 40.7%, crawler crane sales up 66.7%, and truck-mounted crane sales up 29.8% in September 2025 [1]. Group 2: Market Drivers - The ongoing replacement cycle in the construction machinery sector is expected to support future excavator sales, with a projected compound growth rate of around 30% in replacement demand over the next few years [2]. - The export of used construction machinery to developing countries has reduced domestic ownership levels, further supporting new machine sales [2]. Group 3: Government Support and Infrastructure Investment - The government plans to issue 1.3 trillion yuan in long-term special bonds, increasing infrastructure investment, which is expected to boost demand for construction machinery [3]. - The government aims to enhance urban infrastructure, including underground engineering and municipal construction, which will sustain demand for construction machinery [3]. Group 4: Export Performance - In September 2025, excavator exports reached 10,609 units, a year-on-year increase of 29.0%, with total exports from January to September at 84,162 units, up 14.6% [4]. - The export value of construction machinery in September 2025 was $5.27 billion, reflecting a 29.6% year-on-year growth, with total export value from January to September at $43.86 billion, up 13.3% [4]. Group 5: Electrification Trends - In September 2025, electric loader sales surged to 2,586 units, a remarkable year-on-year increase of 176.0%, with an electrification rate of 24.6%, up 13.0 percentage points [5]. - From January to September 2025, electric loader sales totaled 21,407 units, up 157.2%, with an electrification rate of 22.8%, an increase of 13.6 percentage points [5][6]. Group 6: Major Projects Impact - The commencement of the Yarlung Tsangpo River downstream hydropower project, with an estimated investment of 1.2 trillion yuan, is expected to significantly boost demand for construction machinery, with equipment demand projected to reach 120 to 180 billion yuan [7]. - The project will require various types of construction machinery, including large excavators and concrete machinery, further driving industry growth [7]. Group 7: Recommended Companies - Recommended companies include SANY Heavy Industry, XCMG, Zoomlion, LiuGong, Shantui, and China Longgong, along with component manufacturers like Hengli Hydraulic [8]. - Companies related to the Yarlung Tsangpo project, such as China Railway Engineering Corporation and others, are also suggested for attention [8].