EXPL(002096) 民生证券·2024-08-28 09:13Investment Rating - The report maintains a "Recommended" rating for the company, with a current price of 11.07 yuan [6]. Core Views - The company reported a revenue of 3.914 billion yuan for the first half of 2024, a year-on-year decrease of 2.15%, while the net profit attributable to shareholders increased by 15.43% to 351 million yuan [2][3]. - The growth in net profit significantly outpaced revenue due to cost reduction and efficiency improvements, with a notable scale effect in core market regions [3]. - The company is benefiting from the "Western Development" initiative, focusing on opportunities in Xinjiang and Tibet, and is also expanding its international business [5]. Summary by Sections Financial Performance - In Q2 2024, the company achieved a revenue of 2.138 billion yuan, down 7.04% year-on-year, but net profit rose by 23.75% to 216 million yuan [2]. - The revenue structure shows a decline in civil explosive products revenue by 21.7% to 961 million yuan, while blasting service revenue increased by 6.8% to 2.764 billion yuan [3]. - The gross margin for Q2 2024 was 26.03%, an increase of 3.41 percentage points year-on-year, with the blasting service gross margin at 20.95% [3]. Market Opportunities - Xinjiang's coal production maintained a double-digit growth rate, with a 15% year-on-year increase in the first seven months of 2024, leading to an increase in blasting service revenue [4]. - The company is strategically increasing its annual excavation and stripping plans for coal projects in Xinjiang, contributing to revenue growth in blasting services [4]. Future Projections - The company expects net profits for 2024, 2025, and 2026 to be 764 million, 889 million, and 1.008 billion yuan respectively, with corresponding dynamic PE ratios of 18x, 15x, and 14x [5]. - The report highlights a tight supply in the civil explosive industry and increasing demand from mining, supporting a positive outlook for the company's growth [5].