EXPL(002096) 民生证券·2024-06-24 05:00Investment Rating - The report gives a "Buy" rating for the company, with a target price based on a dynamic PE of 19x, 16x, and 14x for the years 2024, 2025, and 2026 respectively [154][153]. Core Insights - The company is positioned to benefit from a tight supply in the civil explosives industry and increasing demand from mining sectors, particularly in the context of the "Western Development" initiative in China, focusing on markets in Tibet and Xinjiang [154][154]. - The company has a significant market share in the industrial explosives sector, with a focus on enhancing its operational capacity and efficiency through strategic regional expansions [28][29]. - The report highlights the company's strong order book and its ability to leverage synergies from being a subsidiary of China Energy Engineering Group [14][154]. Summary by Sections Revenue and Profit Forecast - The company’s revenue for 2023 is projected at 84.28 billion yuan, with expected growth rates of 15% for 2024 and 12% for 2026, reaching 124.67 billion yuan by 2026 [2][151]. - The net profit attributable to the parent company is forecasted to be 634 million yuan in 2023, increasing to 1.008 billion yuan by 2026, with growth rates of 21%, 16%, and 13% for the years 2024 to 2026 respectively [2][151]. Business Segments - The civil explosives business generated 2.667 billion yuan in revenue in 2023, with projections of 3.019 billion yuan, 3.381 billion yuan, and 3.695 billion yuan for 2024, 2025, and 2026 respectively, reflecting growth rates of 13%, 12%, and 9% [1][151]. - The company’s revenue structure indicates that blasting services account for 64% of total revenue, while explosives and detonators contribute 21% and 10% respectively [15][15]. Market Position and Strategy - The company is the only listed civil explosives service platform under China Energy Engineering Group, which provides a competitive edge through collaboration in large-scale infrastructure projects [14][14]. - The report emphasizes the importance of the Western Development strategy, particularly in regions like Tibet and Xinjiang, where the company is expanding its production capacity and operational footprint [29][29]. Industry Trends - The civil explosives industry is experiencing a tightening supply due to high regulatory barriers and increasing demand from mining and construction sectors, particularly in coal and metal mining [17][17]. - The report notes that over 70% of industrial explosives are used in mining, indicating a strong correlation between mining activity and explosives demand [72][72]. Valuation Analysis - The current PE ratio of the company is slightly above its peers, with a valuation that reflects its growth potential and market positioning [153][153]. - The report suggests that the company’s strategic focus on expanding in high-demand regions and enhancing operational efficiencies will support its valuation in the coming years [154][154].