According to the Zhitong Finance APP, Debang Securities released a research report stating that recently, the China Explosives Industry Association announced the statistical data for the civil explosives industry in April 2025. From the monthly data, the production value of civil explosive production enterprises in April reached 3.689 billion yuan, a year-on-year decrease of 2.76%; the total profit was 906 million yuan, a year-on-year decrease of 15.99%. The profit of enterprises in April slightly narrowed, mainly due to the drop in ammonium nitrate prices leading to a decrease in explosive prices, despite the good downstream demand and increased explosive production. According to statistics from the China Explosives Industry Association, from January to April, the production values of Xinjiang and Tibet were 1.214 billion and 162 million yuan, respectively, with year-on-year increases of 8.74% and 7.34%. The current demand-side logic in the industry is gradually being realized, the prosperity in the western region continues, and the demand in debt provinces is gradually recovering, which is expected to continuously boost the civil explosive industry.
<h2>The main viewpoints of Debang Securities are as follows:</h2>
Civil explosive demand is stable and improving, while explosive prices are falling and profits are narrowing
According to the China Explosives Industry Association, from January to April, civil explosive production enterprises accumulated a production value of 11.829 billion yuan, a year-on-year decrease of 1.72%; the total profit was 2.219 billion yuan, a year-on-year increase of 4.22%. In terms of production: from January to April, the cumulative production of industrial explosives by production enterprises was 1.3163 million tons, a year-on-year increase of 1.72%. The overall civil explosive industry is stable and improving, with market demand recovering and explosive production rebounding.
From the monthly data, the production value of civil explosive production enterprises in April was 3.689 billion yuan, a year-on-year decrease of 2.76%; the total profit was 906 million yuan, a year-on-year decrease of 15.99%. The industrial explosive production in April was 416,500 tons, a year-on-year increase of 1.83%; the price of powdered ammonium nitrate in April was 2,279 yuan/ton, a year-on-year decrease of 14.58%. The profit of enterprises in April slightly narrowed, mainly due to the drop in ammonium nitrate prices leading to a decrease in explosive prices, despite the good downstream demand and increased explosive production.
Western policies continue to promote, and the prosperity in Xinjiang and Tibet is expected to continue
According to the China Explosives Industry Association, from January to April, the production values of Xinjiang and Tibet were 1.214 billion and 162 million yuan, respectively, with year-on-year increases of 8.74% and 7.34%, indicating a continuous improvement in civil explosive prosperity.
Xinjiang: According to Liu Guangqi's speech at the 9th CNCCIC conference in 2024, Xinjiang's coal production capacity is striving to reach 700 million tons/year by 2025 (with a production of 541 million tons in 2024), and is expected to reach 1 billion tons by 2030. On one hand, with the in-depth implementation of the &#34;Three Bases and One Corridor,&#34; the external transportation channels will be opened, and Xinjiang's coal supply position is expected to be further strengthened; on the other hand, the intensive landing of coal chemical projects is also expected to support the digestion of new coal production capacity.
Tibet: The 14th Five-Year Plan proposed major projects such as &#34;implementing the Sichuan-Tibet Railway, the new western land-sea corridor, the national water network, and the hydropower development of the Yarlung Tsangpo River downstream.&#34; The hydropower project of the Yarlung Tsangpo River downstream has been officially approved, and the expansion project of the largest copper mine in China, the Jilong Phase II project, has been launched. Once completed, it is expected to double the annual copper production compared to 2023, continuously driving the demand for civil explosives in Tibet.
Debt reduction policies continue to promote, and demand in debt provinces is recovering
In January 2024, the State Council issued a policy document requiring that 12 provinces, municipalities, and autonomous regions with high debt levels, including Tianjin, Inner Mongolia, Guangxi, Yunnan, and Ningxia, must not initiate new projects in 2024, except for basic livelihood projects such as water supply, heating, and electricity. As a result, demand in the civil explosives industry has been adversely affected. In October 2024, the Ministry of Finance stated that it would soon introduce a series of targeted incremental policy measures, including policies to support local governments in resolving hidden debts, which may lead to the resumption of infrastructure projects in high-risk debt provinces and municipalities.
In March 2025, the Ministry of Finance released a report on the implementation of China's fiscal policy in 2024, emphasizing the need to implement a comprehensive debt reduction policy in detail in 2025, which is expected to boost the civil explosives market. With the push from policies, it has been observed that the industry has shown signs of slow recovery since the second half of 2024. By April 2025, six of the 12 debt provinces and municipalities had positive year-on-year GDP growth. According to the China Civil Explosives Association, from January to April 2025, the GDP growth rates of Gansu, Ningxia, and Liaoning among the 12 debt provinces and municipalities were +17.72%, +5.98%, and +5.39%, respectively. With the promotion of debt reduction policies, the civil explosives market is expected to continue to improve.
Overseas Market Space is Vast, Military Industry Layout Continues to Empower
Going Abroad: According to QYResearch, the global civil explosives market size was 123 billion yuan in 2023, approximately three times that of the domestic market. Leading domestic civil explosives companies are expanding overseas. For example, Yahua Group (Zimbabwe lithium mine project, Namibia Damara land project), Jiangnan Chemical (Namibia Rossing uranium mine integrated mining project), Guangdong Hongda (with Serbia as the base, focusing on the Central Africa and South America regions), and Yipule (Namibia Lakeshan uranium mine drilling and blasting construction project). In the future, domestic civil explosives companies are expected to continue to expand overseas in line with the &#34;Belt and Road&#34; initiative to open up growth space.
Military Industry: According to Xinhua News Agency, based on the 2025 central and local fiscal budget draft report, China's defense expenditure in 2025 is projected to be 1,784.665 billion yuan, a year-on-year increase of 7.2%. According to the prospectus of Great Wall Military Industry, it is expected that by 2027, the proportion of equipment costs in defense spending will rise to 40%, which is expected to significantly benefit companies involved in civil explosives and military industry layouts. For example, Guangdong Hongda (military industry sector &#34;1+N&#34; strategic layout, core products include HD-1, JK-2 missiles, etc.); Guotai Group (has tantalum-niobium alloy strategic materials for aerospace and military new damage materials tungsten-based alloy products; also lays out energetic new material production line projects).
Targets
It is recommended to pay attention to Yipule (002096.SZ), Jiangnan Chemical (002226.SZ), Guangdong Hongda (002683.SZ), Guotai Group (603977.SH), Xuefeng Technology (603227.SH), Jin Aobo (002877.SZ), Yahua Group (002497.SZ), GZMB (002827.SZ), KAILONG (002783.SZ), and HUHUA (003002.SZ).
Risk Warning
Policy not meeting expectations, demand not meeting expectations, fluctuations in raw material prices

002497

603977

002827

003002

002783

002226

Debon Securities released a research report indicating that the civil explosives industry is overall stable and improving against the backdrop of recovering demand. In April 2025, civil explosive production enterprises achieved a total production value of 3.689 billion yuan, a year-on-year decrease of 2.76%; the total profit was 906 million yuan, a year-on-year decrease of 15.99%. Although the output of explosives has increased, the decline in the price of raw material ammonium nitrate has led to a narrowing of profits. The prosperity in the western region continues, and the demand for civil explosives is expected to remain strong

Zhitong

Yahua Group

Guotai Group

GZMB

HUHUA

KAILONG

JIANGNAN CHEMICAL

Xuefeng Sci-Tech (Group)

KING EXPLORER

GreatWall Military

Debon Securities: Industry profits remain resilient, continuously optimistic about the prosperity of the civil explosives sector