Guangdong Hongda Blasting Co.Ltd(002683) (002683)
Event: the company announced on December 22, 2021 that it plans to change the company name and securities abbreviation, and plans to jointly invest in the establishment of “military industry group” with Guangye equipment, Rongcheng management and Zhongke Yuewei.
comment:
Change the name and securities abbreviation to highlight the characteristics of platform type and diversified operation: at the initial stage of establishment, the company’s main business was urban blasting demolition, and the name ” Guangdong Hongda Blasting Co.Ltd(002683) ” and abbreviation ” Guangdong Hongda Blasting Co.Ltd(002683) ” can better correspond to the company’s business. With the development of the company, the main business has evolved into three sectors: Mining clothing, civil explosives and military industry. From 2020, the operating profit of civil explosives and military industry has accounted for more than 40%. According to the development plan that the company will continue to grow around the three business segments of military industry, mining clothing and civil explosion, the current name and securities abbreviation have certain limitations. The company plans to change the company name and securities abbreviation to “Guangdong Hongda Holding Group Co., Ltd.” and “Guangdong Hongda”, which can better reflect the company’s strategic positioning, highlight the characteristics of platform type and diversified operation, help to better operate, develop the market and enhance the company’s brand power in the future.
Jointly funded the establishment of the provincial military industry group, Build a leading local military industry enterprise in China: the company plans to jointly invest 85 million yuan with Guangdong Guangye Equipment Manufacturing Group Co., Ltd. (“Guangye equipment”), Rongcheng management consulting (Guangdong) partnership (“Rongcheng management”) and Guangdong Zhongke Yuewei Technology Development Co., Ltd. (“Zhongke Yuewei”) to establish Guangdong Military Industry Group Co., Ltd. (“military industry group”) ）Of which, the subscribed capital contribution of the company is 40 million yuan, accounting for 47.06% of the equity of the military industry group. The military industry group is positioned as the main platform for the development of military industry by state-owned assets in Guangdong Province. It is an important starting point for the Guangdong provincial Party committee and provincial government to promote the development of military civilian integration industry in Guangdong. Through the mode of “state-owned assets leading and market-oriented operation”, it is committed to becoming a leading local military industry enterprise in China.
By investing in the establishment of Guangdong military industry group, the company and its actual controllers are expected to lead the integration of military industry resources inside and outside Guangdong Province in the future, improve the overall position of Guangdong military industry, take military industry investment and military industry incubation as the core business, and face the two markets of military trade and China. The military industry group will be built into a military industry field in China with global vision, world influence It is a leading local military enterprise with Chinese characteristics, so as to bring sustained, stable and growing return on investment to the shareholders of the company. At the same time, it helps to further strengthen the development of the company’s military business.
Profit forecast, valuation and rating: the events involved in the announcement will not have a direct and significant impact on the company’s profits in the short term, and the profit forecast and “overweight” rating will be maintained. We believe that the company’s investment in the establishment of Guangdong military industry group, firm adherence to the route of platform and diversified operation, and general work as an important development direction will help to expand the company’s development space in the field of national defense and military industry, improve the company’s technical level, and enhance the company’s business and profitability.
Risk warning: the military trade negotiation of defense equipment business is less than the expected risk; Risk of mine clothing civil explosion production safety; Risk of price rise of civil explosive equipment and raw materials; Uncertainty risk of product R & D and market promotion of military industry group.
