Guangdong Hongda Blasting Co.Ltd(002683) (002683)
Key elements of the report:
On the evening of December 22, 2021, Guangdong Hongda Blasting Co.Ltd(002683) announced that it planned to jointly invest 85 million yuan with Guangye equipment, Rongcheng management and Zhongke Yuewei to establish a military industry group, and the company subscribed 40 million yuan, accounting for 47.06% of the equity of the military industry group. Key investment points:
Participated in the establishment of the military industry group and renamed “Guangdong grand” to clarify the strategic positioning: among the partners jointly established this time, Guangye equipment is a wholly-owned subsidiary of Guangdong Environmental Protection Group and an affiliated legal person of the company. Its main business covers the R & D and sales of CNC machine tools, information technology and products, electronic and mechanical technology services, etc; Rongcheng management is a limited partnership engaged in investment activities with its own funds. Jin Haicheng, the legal person of the company, also serves as the legal person of Beijing Kedian aerospace space technology Co., Ltd. and Beijing precision digital source information technology Co., Ltd., and has sufficient technology and resource reserves in aerospace remote sensing, surveying and mapping, simulation testing and other fields; Zhongke Yuewei is a 100% holding subsidiary of Guangdong Dawan District Institute of integrated circuits and system applications, which gathers high-quality resources in key fields such as integrated circuits, high-end core chips, advanced packaging technology R & D and services, commercial aerospace and so on. The military industry group jointly established by the company and the above three partners is the main platform for the development of military industry by state-owned assets in Guangdong Province and an important starting point for promoting the development of military civilian integration industry in Guangdong. In the future, the military industry group will also build more relevant platforms around China’s foreign military industry market by relying on the advantageous industries and resources of Guangdong Province. In recent years, the company has focused on the development of defense equipment business on the platform of Minghua company, actively transformed and upgraded from tradition to high-end, strategically arranged China and international markets, and participated in the establishment of military industry group, which is consistent with the company’s development strategy. In addition, the company plans to change its name to “Guangdong Hongda Holding Group Co., Ltd.”, hereinafter referred to as “Guangdong Hongda”, so as to better explore the military business market, reflect the company’s development strategic direction and break the limitations brought by the old name “blasting”.
The inter-bank integration of civil explosives sector is continuing, and the acquisition of Shengli civil explosives is started again: on December 20, the company issued the suspension announcement on planning major asset restructuring. The company plans to acquire 100% equity of Inner Mongolia Shengli civil explosives Co., Ltd. by combining non-public issuance of shares to the transferor and payment of cash, and the trading will be suspended from the opening of the market on December 20. Shengli civil explosive is the leading civil explosive enterprise in Inner Mongolia. As early as 2015, its combined explosive production capacity reached 206000 tons. If the acquisition is carried out smoothly, the company’s industrial explosive production capacity in the certificate is expected to jump to the first in China. In addition, the company’s acquisition of 100% equity of the provincial civil explosion company in Guangdong Province has been paid on December 21. The industry integration of the company’s civil explosive sector has been carried out smoothly from north to south. In the future, the absolute advantage of the civil explosive market in Guangdong Province will be more prominent. The integrated business of mining clothing and civil explosive in Inner Mongolia and even North China will have more synergistic advantages. The outward radiation of one south and one north continues to expand. In addition, the company’s existing production capacity and business reserves in Northeast, northwest and other places, The influence of the company’s mining clothing and civil explosion business across the country will reach a new level.
Profit forecast and investment suggestions: it is estimated that the company will realize an operating revenue of RMB 8334 / 9556 / 10909 million and a net profit attributable to the parent company of RMB 519 / 651 / 811 million from 2021 to 2023, with a corresponding EPS of RMB 0.69/0.87/1.08/share and a corresponding PE of 43.48/34.70/27.84 times (corresponding to the closing price of RMB 30.12 on December 17 before the suspension). Maintain the “buy” rating.
Risk factors: the landing time of military trade orders is less than the expected risk; Information asymmetry risk caused by military attributes; Risk that the R & D progress and order landing cycle of JK UAV series products are less than expected; The performance growth of mining clothing and civil explosion sector is lower than the expected risk; There is great uncertainty in major asset restructuring.
