JIANGNAN CHEMICAL(002226) 申万宏源证券·2025-03-13 12:40Investment Rating - The report assigns an "Accumulate" rating for Jiangnan Chemical, marking the first coverage of the company [6][7]. Core Views - Jiangnan Chemical, a subsidiary of the China Ordnance Industry Group, is positioned as a leading platform in the civil explosives sector, with strong growth potential driven by both internal and external factors. The company has a total industrial explosive production capacity of nearly 800,000 tons, ranking first in the industry, and is expected to benefit from the increasing demand for civil explosives due to the growth in coal production in Xinjiang and opportunities from the Belt and Road Initiative [6][7][21]. Financial Data and Profit Forecast - The projected total revenue for Jiangnan Chemical is as follows: 2024E at 95 billion CNY, 2025E at 106 billion CNY, and 2026E at 139 billion CNY, with corresponding growth rates of 26%, 20%, and 34% respectively. The net profit attributable to the parent company is forecasted to be 9.70 billion CNY in 2024, 11.61 billion CNY in 2025, and 15.58 billion CNY in 2026, with growth rates of 25.5%, 19.6%, and 34.2% respectively [2][7]. Market Data - As of March 13, 2025, Jiangnan Chemical's closing price is 5.88 CNY, with a market capitalization of 15,575 million CNY. The company has a price-to-earnings (PE) ratio of approximately 20 for 2024, which is expected to decrease to 13 in 2025 and further to 10 in 2026, indicating a favorable valuation compared to peers [3][7]. Industry Outlook - The civil explosives industry is experiencing a positive trend, particularly in the western regions and along the Belt and Road Initiative, with increasing demand driven by coal production in Xinjiang and infrastructure projects. The industry is also seeing consolidation, with the top 10 companies expected to account for over 60% of the market by 2025 [6][40][57]. Company Positioning - Jiangnan Chemical has a leading position in the civil explosives market, with significant production capacity and a strategic focus on both domestic and international markets. The company is well-positioned to leverage its advantages in Xinjiang and its overseas operations to drive future growth [6][21][29].