Events:
On April 25, the company released its annual report for 2021, with a total operating income of 815 million yuan, an increase of 28.76% over the same period last year, and a net profit of 39.8995 million yuan, a decrease of 41.77% over the same period last year.
Comments:
1. The gross profit margin is reduced due to the rapid growth of business income, technological transformation and the increase in the price of raw materials. In 2021, the company achieved an operating income of 815 million yuan, an increase of 28.76% over the same period last year, and a net profit of 39.8995 million yuan, a decrease of 41.77% over the same period last year. During the reporting period, the company's revenue grew rapidly, partly because the company included Beijing Coal Joint Venture in its consolidated statements in the second half of the year, while the company achieved growth in other areas, including equipment and raw and auxiliary materials. The main reasons for the decline in profits are as follows: 1) at the initial stage of the integration of the company and Beijing Coal Group, it is necessary to expand and transform the relevant production lines and integrate the internal management system. At the same time, affected by the epidemic and other factors, the demand of downstream mine customers decreased, resulting in losses. 2) Jiangsu Tianming stopped production and carried out line consolidation and technological upgrading in the second quarter, resulting in a 19.37% reduction in sales revenue and 85.64% in net profit in Jiangsu Tianming 2021. 3) due to the impact of the major explosion accident of Qixia Gold Mine in Shandong, Shandong Shengshida net profit decreased by 35.37%. 4) the sharp increase in the prices of raw materials such as sodium nitrate, oleic acid and compound wax in the second half of 2021 had a negative impact on gross profit margin and net profit.
2. Successfully cut into the field of military industry, and the application of robot is constantly expanding. During the reporting period, the company successfully cut into the military field and won two purchase orders for military destruction equipment; at the same time, the gunpowder screening system has completed the functional test and is about to enter the gunpowder equipment field. The company will give full play to its advantages of uncalibrated overall solutions and system integration capabilities, and use its own safe, reliable and efficient intelligent manufacturing equipment and information technology accumulated over the years in the civil explosion industry. help the military equipment industry to achieve the goal of intelligence, fewer people or unmanned.
3. The permitted production capacity of digital electronic detonators has increased from 1300 million to 7855 million.
In December 2021, the document "Safety Development Plan for Civil explosive Industry during the 14th five-year Plan" issued by the Ministry of Industry and Information Technology calls for optimizing and adjusting the layout of production capacity. in principle, there is no new permitted capacity for overcapacity such as industrial explosives and industrial detonators, and industrial digital electronic detonators are popularized in an all-round way, except for a small amount of capacity for export or other licensed special purposes. Production will stop before the end of June, 2022, and the sale of ordinary industrial detonators will stop by the end of August. According to the policy of industrial detonator reduction and replacement of digital electronic detonators, the company replaces some ordinary industrial detonators in the annual production license capacity of 167 million industrial detonators. Up to now, the company has increased the annual production license capacity of digital electronic detonators from 1300 million to 7855 million, and retained part of the production capacity of detonator detonators and industrial electric detonators for export. The company is promoting the technical transformation of electronic detonator production line in an orderly manner, establishing the advantage of electronic detonator production capacity and scale, realizing capacity expansion and production expansion, and increasing sales of electronic detonators in marketing at the same time.
4. The performance of 2022Q1 affected by the epidemic is lower than expected, and the second half of the year may usher in a performance inflection point. On April 25, the company released its first quarterly report of 2022. During the reporting period, the company achieved operating income of 210 million yuan, an increase of 48.28% over the same period last year; the net profit belonging to shareholders of listed companies was-165200 yuan, a decrease of 101.41% over the same period last year. The increase in revenue in the first quarter compared with the same period last year was mainly due to the fact that the newly merged subsidiary Beijing Jinao Bojing Coal Science and Technology Co., Ltd. was not included in the merger in the same period last year, but due to the impact of the epidemic and the Winter Olympic Games in the first quarter, the production and logistics activities of subsidiaries decreased significantly, as well as the delayed implementation of on-hand equipment orders at the project site, resulting in a decrease in the company's gross profit and net profit. Looking forward to the next three quarters of 2022, the company's performance inflection point is expected to come in the second half of the year with the continuous integration of resources in the upper and lower reaches of the industrial chain, the release of electronic detonator products, the improvement of the business scale of civil explosion services, and the increasing demand for intelligent equipment production lines.
Profit forecast and investment rating: we expect the company's 2022-2024 net profit to be 124 million yuan, 256 million yuan and 354 million yuan, with a "recommended" rating.
Risk tips: rising prices of upstream raw materials; business expansion such as military industry is not as expected; market competition is intensified.
