JIANGNAN CHEMICAL(SZ:002226) Changjiang Securities·2025-05-06 23:30Investment Rating - The investment rating for Jiangnan Chemical is "Buy" and is maintained [9]. Core Views - The company reported a revenue of 2.01 billion yuan for Q1 2025, representing a year-on-year increase of 1.6% but a quarter-on-quarter decrease of 27.6%. The net profit attributable to shareholders was 150 million yuan, up 1.0% year-on-year and up 3.3% quarter-on-quarter. The non-recurring net profit was 130 million yuan, reflecting a year-on-year increase of 6.5% and a quarter-on-quarter increase of 10.4% [2][6]. - The demand for civil explosives is steadily growing, supported by a decrease in the price of ammonium nitrate, leading to improved profit margins for production enterprises. In the first quarter of 2025, the cumulative output of industrial explosives reached 900,000 tons, a year-on-year increase of 1.5% [13]. - The company is positioned as a leading player in the civil explosives industry, with a production capacity of 765,500 tons, the highest in the country. The company is expected to benefit from the steady growth in industry demand [13]. - The company is expanding its international market presence, with overseas revenue reaching 1.02 billion yuan in 2024, a year-on-year increase of 27.9%, and the overseas revenue proportion rising from 9.0% to 10.8% [13]. - The company forecasts net profits attributable to shareholders of 1.06 billion, 1.66 billion, and 1.90 billion yuan for 2025, 2026, and 2027, respectively [13]. Financial Summary - For Q1 2025, the company achieved a gross profit margin of 27.4%, an increase of 1.0 percentage points year-on-year, and a net profit margin of 9.9%, up 0.2 percentage points year-on-year [13]. - The company’s total revenue for 2024 is projected at 9.481 billion yuan, with a gross profit of 2.852 billion yuan, indicating a gross margin of 30% [18]. - The earnings per share (EPS) for 2025 is estimated at 0.40 yuan, with a price-to-earnings (P/E) ratio of 13.69 [18].