JIANGNAN CHEMICAL(SZ:002226) Haitong Securities·2024-05-23 01:32Investment Rating - The investment rating for Jiangnan Chemical is "Outperform the Market" and is maintained [2] Core Views - The report highlights that Jiangnan Chemical achieved a significant increase in net profit and revenue in 2023, with a 13.75% year-on-year growth in revenue to 8.895 billion yuan and a 61.48% increase in net profit to 773 million yuan [6][9] - The integration of the group's civil explosive business assets is expected to enhance production capacity significantly, with domestic industrial explosive licensed capacity exceeding 600,000 tons and foreign design capacity nearing 300,000 tons [7] - The company is leveraging its military trade advantages to accelerate its overseas expansion strategy, targeting infrastructure projects along the "Belt and Road" initiative [7] Summary by Sections Financial Performance - In Q1 2024, Jiangnan Chemical reported a revenue of 1.982 billion yuan, a year-on-year increase of 18.44%, and a net profit of 145 million yuan, up 29.63% [8] - The company’s gross profit margin for Q1 2024 was 26.34%, an increase of 1.6 percentage points year-on-year, while the net profit margin was 9.73%, up 0.8 percentage points [8] Business Segments - The civil explosive segment generated revenue of 8.012 billion yuan in 2023, a 10.30% increase, while the new energy segment achieved revenue of 883 million yuan [6] - The engineering blasting service accounted for over 50% of the civil explosive industry revenue, with engineering service revenue reaching 4.7 billion yuan in 2023, a growth of 18.37% [8] Profit Forecast - The forecast for net profit from 2024 to 2026 is 925 million yuan, 1.055 billion yuan, and 1.176 billion yuan respectively, with a projected price-to-earnings ratio of 18-20 times for 2024, indicating a reasonable value range of 6.3 to 7 yuan [9][11]