JIANGNAN CHEMICAL(SZ:002226)2024-05-23 11:00Investment Rating - The report assigns a rating of "Outperform" for the company, indicating an expected relative performance above the market benchmark over the next 12-18 months [7][9]. Core Insights - The integration of civil explosives production and engineering services has demonstrated significant advantages, with over 50% of the industry's revenue derived from engineering blasting services. The company's service revenue reached RMB 4.70 billion, reflecting an 18.37% year-on-year growth [22]. - The company has successfully obtained a top-level mining construction qualification, enhancing its capabilities in mining project acquisition [22]. - The civil explosives sector generated RMB 8.01 billion in revenue, marking a 10.30% year-on-year increase, with a pre-tax profit of RMB 1.03 billion [5]. - The new energy sector contributed RMB 0.88 billion in revenue and RMB 0.20 billion in pre-tax profit, indicating stable growth [5]. - The company is leveraging military trade advantages to accelerate international expansion, focusing on large mines owned by Chinese enterprises and infrastructure projects along the Belt and Road initiative [6][18]. Revenue and Profit Forecast - Revenue is projected to grow from RMB 8.90 billion in 2023 to RMB 12.52 billion by 2026, with a compound annual growth rate (CAGR) of approximately 11.0% [21]. - The company anticipates a growth rate of 18%, 16%, and 14% for blasting engineering revenue from 2024 to 2026, while civil explosives revenue is expected to grow at 10%, 8%, and 8% during the same period [3][21]. - The gross profit margin is expected to remain stable, with slight fluctuations projected from 29.5% in 2023 to 29.4% in 2026 [21].