Guotai Group(603977) CAITONG SECURITIES·2024-10-26 08:23Investment Rating - Maintained "Overweight" rating [1] Core Views - The company is the only civil explosives producer in Jiangxi Province, benefiting from the Gan-Yue Canal project [4] - Military new materials business achieved multiple breakthroughs, with new contracts worth nearly 100 million yuan in H1 2024 [4] - Energetic materials production line construction progressed significantly, with two lines expected to be operational by 2025 and 2026 [4] - Revenue and net profit are expected to grow steadily, with projected revenues of 2.75/3.47/4.42 billion yuan and net profits of 325/400/540 million yuan for 2024-2026 [4] Financial Performance and Projections - Revenue for 2022A, 2023A, 2024E, 2025E, and 2026E: 2.15/2.54/2.75/3.47/4.42 billion yuan [3][6] - Net profit for 2022A, 2023A, 2024E, 2025E, and 2026E: 144/305/325/400/540 million yuan [3][6] - EPS for 2022A, 2023A, 2024E, 2025E, and 2026E: 0.24/0.49/0.52/0.64/0.87 yuan [3][6] - PE ratios for 2022A, 2023A, 2024E, 2025E, and 2026E: 33.50/21.22/23.90/19.41/14.37 [3][6] - ROE for 2022A, 2023A, 2024E, 2025E, and 2026E: 5.03%/9.77%/9.70%/11.07%/13.56% [3][6] Business Highlights - Civil explosives business remains stable, with industrial explosives capacity of 174,000 tons [4] - Military new materials business saw significant growth, with a 35% YoY increase in revenue for Tuohong New Materials in H1 2024 [4] - Energetic materials production lines are under construction, with Line 001 expected to produce 2,500 tons annually by June 2025 and Line 003 expected to produce 500-1,800 tons annually by mid-2026 [4] Market Performance - Recent 12-month market performance: -10%, 3%, 15%, 28%, 41%, 54% [1] - Closing price: 12.50 yuan [1] - Circulating shares: 621 million [1] - Net asset per share: 5.25 yuan [1]