1. Report Industry Investment Rating No relevant content provided. 2. Core View of the Report The company is confident in its future development, firmly committed to the strategies of military transformation and international expansion. It will continue to focus on its main business, optimize management, promote industrial mergers and acquisitions, improve asset quality, and strive to enhance performance [26][29]. 3. Summary by Relevant Catalogs 3.1 Research Basic Information - The research object is Guangdong Hongda, belonging to the mining industry, with a reception time of October 24, 2025. The listed company's reception staff includes Deputy General Manager and Board Secretary Zheng Shaojuan, and General Counsel and Investor Relations Director Zhao Guowen [16]. 3.2 Detailed Research Institutions - The research institutions include securities companies such as CICC, Huabao Securities, Guosheng Securities, and fund management companies such as Chuangjin Hexin Fund, Xingye Fund, as well as insurance agencies like Dajia Insurance. A large number of relevant personnel from these institutions participated in the research [17][18][19]. 3.3 Research Institution Proportion No specific proportion data provided. 3.4 Main Content Materials - **Performance in the First Three Quarters of 2025**: The company achieved an operating income of 14.552 billion yuan, a year - on - year increase of 55.92%; the net profit attributable to the parent company was 653 million yuan, basically flat compared to the same period last year; the cash flow from operating activities was - 236 million yuan, compared to 189 million yuan in the same period last year. The revenue growth was mainly due to the expansion of the mining service business and the consolidation of Xuefeng Technology. The slower growth of net profit was due to the relatively low gross profit margin of new projects and the decline in gross profit in some regions. The decrease in cash flow was due to slower collections or changes in payment methods [25]. - **Business Segments**: - **Mining Service**: The business scale is gradually expanding, focusing on key domestic regions such as Xinjiang, Tibet, and Inner Mongolia, and overseas along the "Belt and Road" countries. The current outstanding orders exceed 35 billion yuan and will continue to be steadily fulfilled [25]. - **Civil Explosives**: The production capacity has increased to 725,500 tons, with stable production capacity release and basically the same business scale as the previous year. Industry mergers and acquisitions are being actively promoted [25]. - **Defense Equipment**: The performance of hexogen is good. The acquisition of Dalian Changzhilin was completed at the end of September, and military trade projects are also being actively promoted [25]. - **Q&A Highlights**: - **Mining Service Gross Profit Margin**: The gross profit margin of the mining service segment in the first three quarters decreased year - on - year. This was mainly due to the low - margin new general contracting projects and the impact on gross profit in Xinjiang and overseas projects [26]. - **Overseas Mining Service**: The scale of overseas mining service projects in the first three quarters was basically the same as last year, with slower growth due to project closures. New projects in Congo (Brazzaville) are under construction, and new winning projects will contribute in the next year [27]. - **Accounts Receivable**: The increase in accounts receivable in the first three quarters was due to the consolidation of Xuefeng Technology and the expansion of the mining service business. The company will strengthen project settlement and cash collection [27]. - **Military Industry Acquisition**: The acquisition of Dalian Changzhilin will be reflected in the fourth - quarter financial statements, which is beneficial for product integration and improving the scale of assets, revenue, and profit in the defense equipment segment [28]. - **Overseas Explosives Production Capacity**: The Peruvian explosives factory is under expansion, and the Zambian explosives factory is under construction. Completion will promote business synergy and competitiveness in the local and surrounding areas [28][29]. - **Xinjiang Business**: The company expects the business scale in Xinjiang to continue to grow due to increased investment, new winning projects, and the region's strategic importance [29]. - **Tibet Business**: The mining service projects in Tibet, such as Julong Copper Mine, Yulong Copper Mine, and Baoxiang Lead - Zinc Mine, are operating well and growing steadily [29]. - **Mining Service Order Structure**: The outstanding orders in the mining service segment are mainly for metal mines, followed by coal and sand and gravel aggregates [29]. - **Civil Explosives Production Capacity Acquisition**: The company aims to achieve a production capacity of one million tons of civil explosives and will continue to promote mergers and acquisitions around rich ore areas [29]. - **Performance Outlook**: The company will focus on its main business, optimize management, and strive to improve performance in the fourth quarter and the whole year [29].

Investment Rating - The investment rating for the company is "Buy" (maintained) [1] Core Views - The company has shown a slight increase in net profit attributable to shareholders in the first three quarters of 2025, with a year-on-year growth of 0.5% [6] - The report expresses optimism about the long-term growth of the mining service and defense sectors [6][9] - The company is actively integrating its civil explosives business and is committed to transitioning towards military applications, aiming to become a globally competitive military enterprise [10] Financial Performance Summary - For the first three quarters of 2025, the company achieved operating revenue of 14.552 billion yuan, a year-on-year increase of 55.9% [6] - The net profit attributable to shareholders was 653 million yuan, reflecting a year-on-year increase of 0.5% [6] - The net profit after deducting non-recurring gains and losses was 643 million yuan, up 5.5% year-on-year [6] - The gross profit margin was 19.94%, down 1.42 percentage points year-on-year [6] - The net profit margin was 8.18%, down 1.25 percentage points year-on-year [6] Quarterly Performance Summary - In Q3 2025, the company reported operating revenue of 5.401 billion yuan, a year-on-year increase of 44.1% but a quarter-on-quarter decrease of 1.7% [7] - The net profit attributable to shareholders for Q3 was 149 million yuan, down 36.9% year-on-year and 63.6% quarter-on-quarter [7] - The net profit after deducting non-recurring gains and losses for Q3 was 161 million yuan [7] - The operating cash flow for Q3 was -9 million yuan [7] Investment Highlights - The decline in Q3 net profit is attributed to increased expenses from the consolidation of Xuefeng Technology and the need for business expansion, leading to higher borrowing costs and a decrease in the gross margin of the mining service sector [8] - The company is enhancing its civil explosives business and has made significant strides in military transformation, with a focus on integrating its operations [9][10] - The company aims to become a leading player in the mining service sector and the civil explosives market, with a strong emphasis on military applications [10] Earnings Forecast - The company is projected to achieve operating revenues of 19.953 billion yuan, 25.221 billion yuan, and 28.931 billion yuan for the years 2025, 2026, and 2027, respectively [11] - The net profit attributable to shareholders is expected to be 1.042 billion yuan, 1.307 billion yuan, and 1.705 billion yuan for the same years [11] - The corresponding price-to-earnings ratios are forecasted to be 28, 22, and 17 times for 2025, 2026, and 2027, respectively [10][11]

Financial Performance - The company achieved a revenue of 14.552 billion yuan in the first three quarters of 2025, representing a year-on-year growth of 55.92% [2] - The net profit attributable to shareholders was 653 million yuan, remaining relatively stable compared to the previous year [2] - Cash flow from operating activities was -236 million yuan, a decline from 189 million yuan in the same period last year [2] Business Segments - The mining service segment expanded significantly, driven by new large-scale total contracting projects and the consolidation of Xuefeng Technology [2] - The civil explosives segment's production capacity increased to 725,500 tons, with stable output compared to the previous year [2] - The defense equipment segment showed good performance, with the acquisition of Dalian Changzhilin expected to enhance product integration and competitiveness [5] Market Strategy - The company is focusing on key domestic markets such as Xinjiang, Tibet, and Inner Mongolia, while also expanding its international presence along the "Belt and Road" initiative [2][4] - The company has a backlog of orders exceeding 35 billion yuan, indicating strong future revenue potential [2] Challenges and Risks - The decline in gross margin for the mining service segment is attributed to the lower margins of new total contracting projects and reduced margins in certain regions [3] - Accounts receivable increased significantly due to the consolidation of Xuefeng Technology and the expansion of the mining service segment [4] Future Outlook - The company expects continued growth in its Xinjiang operations, supported by increased investments and new project wins [8] - Plans to enhance operational efficiency and asset quality to mitigate risks associated with accounts receivable [4] - The company remains committed to achieving a million-ton production capacity in the civil explosives sector through strategic acquisitions [11]

Core Insights - The company is acquiring a 60% stake in Dalian Changzhilin Technology Co., Ltd. for 1.02 billion yuan to strengthen its defense equipment segment and enhance future financial and operational capabilities [1] - The company aims to transform into a military industry leader while integrating its civil explosives segment to optimize cash flow and support performance [2] - The company forecasts net profits of 1.158 billion yuan, 1.383 billion yuan, and 1.634 billion yuan for 2025-2027, with a target price of 46.41 yuan based on a 25.5 times PE ratio for 2026 [3] Group 1 - The acquisition of Dalian Changzhilin is expected to enhance the company's capabilities in aerospace component development and manufacturing, with projected revenues of 731 million yuan and net profits of 156 million yuan for 2024 [1] - The company is preparing for infrastructure construction for the Yarlung Tsangpo River hydropower project in Tibet, focusing on resources such as civil explosive capacity and technical talent [1] Group 2 - The company is committed to becoming a globally recognized military enterprise and a leading civil explosives producer, with a focus on expanding its market share in Xinjiang, Tibet, and overseas [2] - The company has over 35 billion yuan in mining service orders, with significant revenue growth in Xinjiang and Tibet, achieving increases of 121.27% and 45.11% respectively [2] - The international strategy involves military trade leading the way, with mining services as a precursor and civil explosives as a foundation [2]

Core Points - The company has ensured the authenticity, accuracy, and completeness of the quarterly report, with all board members bearing legal responsibility for any misrepresentation or omissions [2][10] - The third-quarter financial report has not been audited [3][10] Financial Data - The company has made retrospective adjustments to previous accounting data due to business combinations under common control [3] - There are no non-recurring profit and loss items applicable for the quarter [3] - The company reported no changes in the classification of non-recurring profit and loss items [3] Shareholder Information - The company held several board meetings to discuss important matters, including the revision of the company’s articles of association and the appointment of new directors [6][8][11] - The company approved a cash dividend distribution of 2 RMB per share, totaling no more than 150,723,102.20 RMB [7] Strategic Developments - The company has agreed to increase capital by 1.62 billion RMB in its subsidiary, Hongda Defense, to support its military transformation strategy [6][7] - The company completed the acquisition of a 60% stake in Dalian Changzhilin Technology Co., Ltd., which is now included in the consolidated financial statements [7] Governance Changes - The company has decided to abolish the supervisory board, transferring its responsibilities to the audit committee of the board [6] - A new chairman was elected following the resignation of the previous chairman due to age [8]

Core Viewpoint - Guangdong Hongda Holding Group Co., Ltd. held an online performance briefing on September 19, discussing its mining service business, order status, military industry transformation, acquisition progress, and business synergy [1]. Group 1: Mining Service Business - The mining service segment has seen a steady increase in new orders, with over 35 billion yuan in hand orders as of the first half of the year, maintaining a stable service mineral structure [1]. - The company focuses on key regional markets and accelerates international expansion, emphasizing a "big clients, big projects" strategy, with major clients including Zijin Mining, China Energy Group, and Ansteel Mining [1]. - New mining service orders exceeded 10 billion yuan this year [1]. Group 2: Military Industry Transformation - The company is committed to transforming towards the military industry, investing heavily in high-end intelligent weapon systems and related supply chain layouts [1]. - The defense equipment product layout includes high-end defense equipment and core supporting products [1]. Group 3: Acquisition Progress - The acquisition of Changzhilin was priced considering multiple factors and aligns with the company's military transformation strategy, enhancing the industrial chain layout [1]. - The company is actively promoting the subsequent equity transfer related to the acquisition [1]. - The acquisition of Xuefeng Technology was also priced based on various factors, facilitating industrial chain synergy and seizing opportunities in Xinjiang's mineral resource development [1]. Group 4: Other Business Developments - The company expressed readiness to participate in the Yaxia Hydropower Station and Xinjiang Railway blasting business, although participation remains uncertain [2]. - The Hongda Satellite Wuxi project currently operates 10 satellites successfully, with future collaboration planned with the defense equipment business [2]. - The company held an investor open day on September 17 in Beijing, aiming to continuously optimize investor relations management [2].

Group 1: Business Performance - The company's mining service sector has signed new orders exceeding 100 billion yuan this year, with total orders on hand surpassing 350 billion yuan as of mid-year [1][2] - The mining service business is focusing on major regional markets and international expansion, with key clients including Zijin Mining, China Energy Group, and Ansteel Mining [1] Group 2: Defense Equipment Sector - The company is actively pursuing opportunities in the military industry, with plans to invest heavily in high-end intelligent weapon systems [2][3] - The defense equipment sector is expected to see significant growth, although specific revenue projections for 2025 were not disclosed [2] Group 3: Acquisitions and Strategic Moves - The acquisition of Changzhilin is aligned with the company's strategic shift towards military applications, enhancing its competitive edge in the aerospace sector [2][3] - The acquisition of Xuefeng Technology is aimed at strengthening the supply chain and capitalizing on mineral resource development opportunities in Xinjiang [3][4] Group 4: Future Projects and Initiatives - The company has a total of 15,000 tons of civil explosive capacity and is preparing to participate in infrastructure projects in the Yarlung Tsangpo River region, although participation remains uncertain [4] - The company has successfully launched 10 satellites and plans to launch an additional 20 within the next three years, with future collaborations expected between the satellite project and existing defense equipment operations [4] Group 5: Investor Relations - The company held an investor open day on September 17, 2025, to enhance communication with both institutional and individual investors [4] - Continuous efforts will be made to optimize investor relations management and improve the quality and investment value of the listed company [4]

Report Summary 1. Report Industry Investment Rating No information provided. 2. Core Viewpoints - The company held an investor open - day event on September 17, 2025, to promote communication with investors. In H1 2025, the company achieved significant revenue and profit growth. It is committed to transforming into the military industry, with a positive outlook for future military business profitability. The company aims to become a leading enterprise in multiple fields [23][24]. 3. Summary by Directory 3.1. Research Basic Information - Research object: Guangdong Hongda - Industry: Extractive industry - Reception time: September 17, 2025 - Company reception staff: Chairman Zheng Bingxu, General Manager Zhang Gengcheng, etc. [16] 3.2. Detailed Research Institutions - A total of 43 institutions participated in the research, including securities companies such as CITIC Securities, Tianfeng Securities, and fund management companies such as GF Fund, E Fund [17][18][19]. 3.3. Research Institution Proportion No information provided. 3.4. Main Content Information - **Company Performance in H1 2025**: Achieved revenue of 9.15 billion yuan, a year - on - year increase of 63.83%; achieved net profit attributable to shareholders of 504 million yuan, a year - on - year increase of 22.05% [23]. - **Business Segments**: The mining service segment is expanding overseas; the civil explosion segment has a production capacity of 725,500 tons and has entered the overseas market; the defense equipment segment has complete qualifications and is targeting both domestic and international military trade markets [23]. - **Key Q&A**: - **Military Transformation Strategy**: The company will continue to invest in the defense equipment segment and expand its industrial chain. It expects good profitability in the military business [24]. - **Cost Advantage of Defense Equipment**: The company has a market - oriented mechanism, efficient R & D processes, and effective cost control [25]. - **Overseas Orders**: The company is actively promoting order implementation through military trade companies [25]. - **Business Priority**: The primary strategy is to transform into the military industry, followed by promoting mergers and acquisitions in the civil explosion segment and strengthening the mining service business [26]. - **Product Maturity**: High - end defense equipment is ready for sale [26]. - **M&A Direction**: Focus on mergers and acquisitions related to product supporting [26]. - **Equity in Hongda Satellite**: The company is the largest shareholder and is optimistic about its future [26]. - **International Strategy**: "Military trade leads, mining service goes first, and civil explosion follows" [26]. - **Share Repurchase**: The company repurchased shares worth 123 million yuan for equity incentives or employee stock ownership [27].

Financial Performance - The company achieved a revenue of 9.15 billion CNY in the first half of 2025, representing a year-on-year growth of 63.83% [3] - The net profit attributable to shareholders reached 504 million CNY, with a year-on-year increase of 22.05% [3] Business Segments Overview - The mining service segment is actively developing on-site mixed loading business and expanding overseas [3] - The civil explosives segment has a production capacity of 725,500 tons and has entered the overseas civil explosives market [3] - The defense equipment segment is fully qualified and is targeting both domestic and international military trade markets [3] Strategic Focus - The company is committed to transitioning towards the military industry, investing heavily in high-end intelligent weapon systems [3][6] - The strategy includes mergers and acquisitions of related military enterprises to enhance industry and market synergy [6][7] Cost Advantages - The company benefits from a market-oriented operational mechanism and efficient decision-making processes, which help control costs effectively [4] Future Outlook - The company plans to continue increasing investments in the defense equipment sector while maintaining growth in traditional business areas [7] - The company aims to become a globally recognized military enterprise and a leading player in the mining service and civil explosives sectors [7] Shareholder Engagement - The company repurchased shares worth 123 million CNY for employee stock incentives and has implemented two phases of restricted stock incentive plans [7]

Investment Rating - The investment rating for the company is "Buy" and is maintained [11]. Core Views - The company reported a revenue of 9.15 billion yuan for the first half of 2025, representing a year-on-year increase of 63.8%, and a net profit attributable to shareholders of 500 million yuan, up 22.0% year-on-year [2][8]. - The acquisition of 60% of Dalian Changzhilin Technology Co., Ltd. for 1.02 billion yuan is expected to enhance the company's defense equipment segment and overall competitiveness in the military industry [14]. Financial Performance - In Q2 2025, the company achieved a revenue of 5.5 billion yuan, a year-on-year increase of 64.9% and a quarter-on-quarter increase of 50.4% [2][8]. - The company's mining service revenue for the first half of 2025 was 6.44 billion yuan, a year-on-year growth of 48.7% [14]. - The gross margin for the mining service segment was 16.5%, a decrease of 1.9 percentage points year-on-year [14]. Business Segments - The company’s revenue from civil explosives products reached 1.38 billion yuan, a year-on-year increase of 40.31%, primarily due to the consolidation of Changzhilin's revenue [14]. - The overseas business revenue totaled 720 million yuan, accounting for 7.9% of total revenue, with an 18.9% year-on-year growth [14]. Future Outlook - The company expects net profits attributable to shareholders to be 1.13 billion yuan, 1.34 billion yuan, and 1.69 billion yuan for the years 2025, 2026, and 2027, respectively [14].