Guangdong Hongda (SZ:002683) EBSCN·2024-08-27 09:10Investment Rating - The report maintains a "Buy" rating for the company [2][5]. Core Views - The company achieved a 29% year-on-year growth in net profit, with significant progress in multiple business segments [1]. - The mining services segment has shown remarkable domestic and international market expansion, leading to improved profitability [1][2]. - The company is actively pursuing acquisitions in the civil explosives sector, which is expected to enhance production capacity and business scale [1][2]. Summary by Relevant Sections Financial Performance - In H1 2024, the company reported revenue of 5.524 billion yuan, an increase of 11.63% year-on-year, and a net profit of 413 million yuan, up 29.17% year-on-year [1]. - The revenue breakdown includes mining services (4.329 billion yuan, +12.88%), civil explosives (985 million yuan, -2.90%), and defense equipment (133 million yuan, +760.37%) [1]. - For Q2 2024, revenue was 3.333 billion yuan, a 12.12% increase year-on-year, with a net profit of 337 million yuan, up 25.76% [1]. Mining Services - The mining services segment's gross margin improved to 21.72%, a 2.61 percentage point increase year-on-year, primarily due to enhanced margins in mining operations [1]. - The company focuses on large projects and clients, particularly in resource-rich regions such as Xinjiang, Inner Mongolia, and Tibet, while also expanding into overseas markets [1]. - In H1 2024, overseas revenue reached 604 million yuan, a 54.18% increase year-on-year [1]. Civil Explosives - The company has a total explosive production capacity of 533,000 tons, ranking among the top three in the country [1]. - Ongoing acquisitions are expected to drive capacity and business scale improvements, including a recent acquisition of a 60% stake in Yangsheng Chemical, adding 35,000 tons of industrial explosive capacity [1][2]. Defense Equipment - The company’s subsidiary, Hongda Defense, has expanded its business into the production and sales of black powder, which is widely used in various military applications [2]. - In H1 2024, Jiangsu Hongguang achieved a performance of 34.34 million yuan, completing 85.84% of its annual performance commitment [2]. Profit Forecast and Valuation - The net profit forecasts for 2024-2026 have been raised by 5.20%, 7.71%, and 7.64% to 850 million, 978 million, and 1.085 billion yuan, respectively [2]. - The corresponding EPS estimates are 1.12, 1.29, and 1.43 yuan, with current price-to-earnings ratios of 17x, 15x, and 13x for the respective years [2].