Guangdong Hongda (002683)2024-10-24 08:08Investment Rating - The report maintains an "Outperform" rating for Guangdong Hongda Blasting [1][4][7]. Core Views - In Q3 2024, the company achieved a recurring net profit of RMB 230 million, representing a year-on-year increase of 29.58%. For the first three quarters of 2024, the operating income reached RMB 9.272 billion, up 16.75% year-on-year, with a net profit attributable to shareholders of RMB 650 million, an increase of 30.83% year-on-year [1][4][7]. - The company is expanding its production capacity through external mergers and acquisitions, including a proposed acquisition of 21% of Xuefeng Sci-Tech, which will enhance its strategic layout in Xinjiang [5][6][7]. - The civil explosives segment is expected to benefit from the acquisition of Jiangsu Hongguang, which will enhance the supply capacity of raw materials and strengthen the company's military brand image [6][7]. Financial Summary - For 2024, the company is projected to achieve a net profit attributable to shareholders of RMB 854 million, with further increases to RMB 1.025 billion in 2025 and RMB 1.222 billion in 2026. The target price is set at RMB 28.00, based on a P/E ratio of 25x for 2024 [4][7]. - The company's production capacity is expected to increase to 580,000 tons by Q3 2024, supported by recent mergers and expansions in the explosives production lines [7].