The direct controlling shareholder of Yipuli (002096.SZ) is China Gezhouba Group Co., Ltd., which directly holds 43.37% of the company's shares. The actual controller is the State Council's State-owned Assets Supervision and Administration Commission. Yipuli was founded in 1993 to serve the Three Gorges Project, and has now developed into a leading integrated enterprise for civilian explosions. In January 2023, Yipuli and Nanling Minbang successfully completed the merger and acquisition integration. After the merger and restructuring, Yipuli's industrial explosives production capacity reached 521,500 tons, ranking second in the country. In 2023, the output reached 503,300 tons (including the production of trusteeship companies), leading the industry. The current production capacity of electronic detonators is 64.5 million shots/year, and another 34 million shots/year production capacity is under construction.

Highlight 1: Seize an advantageous position and stay at the forefront of the industry in scale;

Highlight 2: Using key downstream areas as a starting point, taking advantage of the cyclical trend, it is expected to achieve long-term steady growth; (In 2023, new orders signed by Yipuli and ongoing execution reached 31.901 billion yuan. (In the first quarter of 2024, Yipuli signed a new order of 3,918 billion yuan.)

Highlight 3: Make full use of shareholder advantages and industry genes to actively participate in the construction of key projects; Highlight 4: Profitability is expected to continue to improve;

The company's net profit for 2024/2025/2026 is estimated to be $769 million, $925 million, and $1,155 million, respectively. The current stock price is 18.5X, 15.5X, and 12.5X for 2024/2025/2026 PE, respectively.

Give it a “buy” rating.

Risk warning: the risk of sharp fluctuations in the raw materials market; the risk of downstream demand falling short of expectations; production safety and environmental protection risks; policy risks