Event

On August 25, Jin Obo released its 2023 semi-annual report. 2023H1, the company achieved revenue of 650 million yuan, an increase of 17% over the same period last year, and a net profit of 46.5412 million yuan, an increase of 84% over the same period last year.

Comment

1. the performance has achieved relatively rapid growth. 2023H1, the company achieved revenue of 650 million yuan, an increase of 17% over the same period last year, of which revenue from civil explosive products increased by 24.22% over the same period last year, chemical materials by 12.59%, and special equipment by 8.42% over the same period last year. The net profit of returning to the mother was 46.5412 million yuan, an increase of 84% over the same period last year. The main reason for the profit growth is that the company continues to strengthen market expansion, the sales revenue of electronic detonators increases, and the company takes a series of measures to optimize internal management and strengthen cost control. Gross profit margin has been raised to promote the company's efficiency growth.

2. The equipment business benefits from the essential safety requirements of civil explosion, and has broad prospects for expansion into the military industry and other fields. On April 19, 2023, the company announced that the company and the Special Energy Group under the Arms Group have signed the Agreement on deepening Strategic Cooperation, and the two sides will carry out in-depth cooperation in production, technology and services in the field of initiating explosive and civil explosive equipment manufacturing. During the 14th five-year Plan period, Taneng Group will complete the transformation of more than 60 fire-related production lines, and more than 2000 dangerous operators will be evacuated backstage. Taneng Group will give priority to adopt or jointly develop advanced technology, intelligent equipment and supporting information software products with Jin Obo in the field of pyrotechnics and civil explosions, and promote the construction of "black light factories" in the field of pyrotechnics and civil explosions, speed up the formation of a number of new industry standards and industry demonstration lines, and lead the development of China's pyrotechnics and civil explosion industries.

3. The company has more than 80 million electronic detonators production capacity, and the popularization rate of electronic detonators has greatly increased, which has become an important source of income and profit for the company. As of April 2023, the company has an annual production license of 8522 million digital electronic detonators. The company's subsidiary Taishan Min Bao electronic detonator production line with an annual output of 3500 million hair has been officially put into production through production acceptance, and the annual production line of 2000 million hair electronic detonator has passed the test of trial production conditions. According to the data released by the China blasting Materials Industry Association, the cumulative output of electronic detonators in the first half of 2023 was 303 million hair, an increase of 219.17% over the same period last year. Electronic detonators accounted for 91.27% of the total production of industrial detonators, an increase of 71% over the same period in 2022, and the popularization rate increased significantly. 2023H1, the company's detonating equipment business achieved revenue of 204 million yuan, an increase of 84% over the same period last year. The growth of sales revenue of electronic detonators has become an important source of income and profit for the company.

4. The Ministry of Industry and Information Technology encourages merger and reorganization, and the company's industrial chain continues to extend. In December 2021, the "14th five-year Plan for the Safety and Development of Civil explosive Industry" (Ministry of Industry and Information Technology Regulation (2021) No. 183) issued by the Ministry of Industry and Information Technology requires that we should adjust and optimize the industry structure, continue to promote enterprise restructuring and integration, support the industry's leading backbone enterprises to implement cross-regional and cross-ownership restructuring and integration, and reduce the number of production enterprises to less than 50. Shandong Shengshida, a holding subsidiary of the company, completed the acquisition of 53% equity and related claims of Taishan Minbao in January 2022, and purchased 5000 million detonator production lines and related assets of Shandong Yinguang Technology Co., Ltd. in March 2022. Beijing Jinao Bojing Coal, a holding subsidiary, completed the acquisition of 74% equity in Tianjin Taketon Civil blasting equipment Co., Ltd in July 2022. Through mergers and acquisitions in the civil explosive industry, the company further strengthens the deep integration of the technological advantages of intelligent equipment and resources in the field of production, gives full play to the synergy effect, and promotes the effective extension of the company's industrial chain. to create a complete industrial ecological chain integrating "production, supply, explosion, research and use", consolidate the company's market competitiveness in the field of civil explosive equipment, enhance the company's comprehensive strength and profit growth points, and promote the company's long-term development.

5. Profit forecast and investment rating: we expect the company's homing net profit from 2023 to 2025 to be 1.24,2.02 and 306 million yuan respectively, an increase of 389%, 63% and 52% over the same period last year. The corresponding share price PE is 27,17 and 11 times respectively, covering for the first time and giving the "overweight" rating.

Risk Tips:

Military orders fall short of expectations; industry competition intensifies; market expansion falls short of expectations.