What happened: the company released its third quarterly report for 2022. In the first three quarters of 2022, the company achieved operating income of 896 million yuan, an increase of 71.93% over the same period last year, and a net profit of 46.873 million yuan, an increase of 2.34% over the same period last year.
2022Q3's performance has improved significantly. In the first three quarters of 2022, the company achieved a 71.93% year-on-year increase in revenue, mainly due to the co-financing of Jinao Bojing Coal with Beijing Coal Group in July 2021, which was not included in the merger in the first half of 2021. However, due to the increase in the proportion of revenue from explosive products and the increase in the price of chemical raw materials, the company's gross profit margin in the first three quarters of 2022 decreased by 2.04pct to 25.82% compared with the same period last year; at the same time, Jinao Bojing Coal Co., Ltd. and a new consolidated subsidiary in 2022, resulting in an increase in the rate of sales and management expenses. Under the influence of the above factors, the company's home net profit increased slightly by 2.34% compared with the same period last year. The company's 2022Q3 achieved a revenue of 336 million yuan in a single quarter, an increase of 61.13% over the same period last year, and a net profit of 21.6096 million yuan, an increase of 240.60% over the same period last year. Compared with the 35.97% decline in 2022H1's net profit, the month-on-month improvement is obvious.
The layout of civil explosion integration, fully benefit from the overall promotion trend of electronic detonators, and create the second pole of performance growth. The 14th five-year Plan of the civil explosion industry requires that production be stopped by the end of June 2022 and the sale of industrial detonators except industrial digital electronic detonators stop by the end of August. From January to September 2022, China's electronic detonator sales totaled 169 million hair, an increase of 79% over the same period last year, and the permeability reached 30% in September. China's electronic detonator sales reached 0.45 million hair, with a penetration rate of 71%. The trend of industrial detonator upgrading electronic detonator is obvious, policy-driven stacking high unit price, electronic detonator market potential is huge. As of September 2022, the company has an annual production license of 8522 million digital electronic detonators. With the launch of electronic detonator production capacity, the company's performance growth is worth looking forward to.
The leader of civil explosive intelligent equipment has benefited from the upgrading of intelligent manufacturing during the "14th five-year Plan" and successfully cut into the military field. The 14th five-year Plan of the civil explosion industry further emphasizes the less (no) humanization, automation and intelligence of production. As the leader of civil explosive intelligent equipment, the company will fully benefit from the equipment upgrading needs of downstream manufacturers. The company also replicates and expands its advantages in the field of civil explosive intelligent equipment to other fields, such as winery, packaging industry and so on. In addition, as of June 2022, the military enterprise destruction equipment project that the company has won the bid has entered the stage of installation and commissioning, and the automatic screening process equipment has been tested and verified in the customer site.
Profit forecast, valuation and rating: taking into account the short-term impact on the integration of Jinao Bojing Coal and other subsidiaries, as well as the adverse impact of the epidemic on business development, we will reduce the company's 2022 net profit forecast by 45% to 97 million yuan, maintain the 2023 home net profit forecast of 338 million yuan, and increase the 2024 return net profit forecast of 419 million yuan. The corresponding EPS from 2022 to 2024 was 0.28,0.97,1.21 yuan respectively. We believe that with the end of the integration of M & A targets, the gradual commissioning of electronic detonator production capacity and the continuous expansion of military projects, the company's performance still has a lot of room for growth, so we maintain our "buy" rating on the company.
Risk tips: industrial chain extension and expansion risk; raw material price fluctuation risk; electronic detonator production line production schedule delay risk; military market development is not up to the expected risk.
