Guangdong Hongda (SZ:002683) Xin Lang Cai Jing·2025-08-26 02:40Core Viewpoint - The company reported strong revenue and profit growth in the first half of 2025, driven by its mining services and civil explosives segments, while also making strategic moves in the defense sector to enhance future growth potential [1][2][4]. Financial Performance - In H1 2025, the company achieved operating revenue of 9.15 billion yuan, a year-on-year increase of 63.83%, and a net profit attributable to shareholders of 504 million yuan, up 22.05% year-on-year [1]. - In Q2 2025, the company recorded operating revenue of 5.50 billion yuan, a year-on-year increase of 62.34% and a quarter-on-quarter increase of 50.44% [1]. Segment Performance - The mining services segment generated revenue of 6.44 billion yuan, a year-on-year growth of 48.74%, with significant increases in revenue from Xinjiang (121.27% growth) and Tibet (45.11% growth) [2]. - The civil explosives segment reported revenue of 1.38 billion yuan, a year-on-year increase of 40.31%, benefiting from the acquisition of Xuefeng Technology and increased production capacity [2]. - The defense segment's revenue was 80 million yuan, a decline of 39.55%, likely due to the delivery schedule of traditional military products [2]. Profitability and Cost Management - The company's gross margin for H1 2025 was 19.86%, a decrease of 1.86 percentage points, primarily due to the increased proportion of integrated projects in the mining services segment [3]. - The company managed to reduce its expense ratio to 8.41%, down 1.53 percentage points year-on-year, with financial expenses decreasing due to currency exchange gains [3]. Strategic Initiatives - The company is accelerating its transformation into the defense sector, increasing its stake in a military industrial group to 65% and establishing a joint venture to enhance its defense equipment supply chain [4]. - In August 2025, the company announced plans to acquire 60% of Changzhilin for 1.02 billion yuan, which is expected to contribute an additional 93 million yuan to net profit after consolidation [4]. Earnings Forecast - The profit forecast has been adjusted to reflect the consolidation of Xuefeng Technology, with expected net profits for 2025-2027 at 1.16 billion, 1.38 billion, and 1.57 billion yuan respectively [5]. - The current stock price corresponds to price-to-earnings ratios of 23.2, 19.6, and 17.2 for the respective years, indicating a strong market position in the integrated civil explosives and mining services sector [5].