Breaking Down Tibet GaoZheng Explosive Co., Ltd. Financial Health: Key Insights for Investors

Founded on January 2, 2014 through a state-controlled transformation and listed on the SME board of the Shenzhen Stock Exchange as Gaozheng Civil Explosives on December 9, 2016, Tibet GaoZheng Explosive Co., Ltd. (ticker 002827.SZ) is a SASAC-held enterprise (68.37% owned by Tibet Gaozheng Explosive Engineering Co.) that by end-2017 reported total assets of ¥895 million and today combines production, logistics and blasting services across China with manufacturing capacity near 200,000 tonnes of explosives annually; its 2022 financials show revenue of about ¥1.2 billion with a 10% net margin (net income ¥120 million), R&D investment at 5% of revenue and logistics eating roughly 20% of operating costs, while 2025 figures underline accelerating momentum-Q1 net income of ¥17.6239 million (up 94.26% YoY), H1 revenue of ¥771 million (up 6.55% YoY) and H1 net profit attributable to shareholders of ¥69 million (up 25.7% YoY)-positioning the company, a key supplier of ANFO, emulsion and water-gel explosives plus detonators and blasting engineering, to capitalize on regional infrastructure and mining projects with analyst projections of net profits of ¥270m/¥390m/¥570m for 2025-2027.

Tibet GaoZheng Explosive Co., Ltd. (002827.SZ): Intro

• Incorporation: January 2, 2014 (state-controlled transformation)
• Listing: December 9, 2016 (SME board, Shenzhen Stock Exchange)
• 2017 total assets: ¥895,000,000
• 2025 corporate name change: Xizang Gaozheng Civil Explosives Co., Ltd.
• Q1 2025 net income: ¥17,623,900 (+94.26% YoY)
• H1 2025 net profit to shareholders: ¥69,000,000 (+25.7% YoY)

• Major stakeholder type: State-controlled/regional government-related entities
• Corporate governance: Board of Directors, Supervisory Board, Executive Management
• Regulatory oversight: Industry safety regulators, local government, Shenzhen Stock Exchange disclosure rules

• Manufacturing of civil explosives and ancillary explosive materials
• Storage and warehousing complying with mining/blasting safety standards
• Transportation logistics adapted for high-altitude and remote terrain
• Blasting services and technical deployment for construction, mining, and infrastructure projects

• Procurement of raw materials → Controlled production at licensed facilities
• Quality control and safety inspections → Licensed storage
• Compliance with transport permits and route approvals → Delivery to client sites
• On-site blasting services and post-blast reporting → Billing and project closeout

• Product sales: Civil explosives and related materials sold to mining, construction, and infrastructure customers
• Services: Contract blasting, technical consulting, blasting design, and on-site execution
• Logistics & storage fees: Charges for secure warehousing and regulated transportation
• Aftermarket/support: Maintenance, training, and compliance advisory services

• Regulatory risk: Stringent licensing, environmental and safety regulations for explosives
• Operational risk: High safety and logistics demands in high-altitude, remote regions
• Market cyclicality: Demand tied to mining and infrastructure investment cycles
• Concentration risk: Regional client concentration can amplify local demand shocks

Tibet GaoZheng Explosive Co., Ltd. (002827.SZ): History

• Holding and control: The company is a holding entity under the SASAC of the Tibet Autonomous Region.
• Major shareholder: Tibet Gaozheng Explosive Engineering Co. holds 68.37% of the equity.
• Public float: The remaining 31.63% of shares are publicly traded on the Shenzhen Stock Exchange under ticker 002827.SZ.
• Shareholder mix: The public float comprises institutional investors, mutual funds, and individual retail holders.
• Governance: A board of directors (commonly 7-9 members) oversees strategy; key executives manage day-to-day operations and regulatory compliance.

• Economic role: The state-majority ownership ensures alignment with regional infrastructure, mining policy and public-safety oversight.
• Capital access: Listing provides the company with market financing channels while maintaining state strategic control.
• Investor profile: Institutional holders typically include domestic asset managers and pension-related funds; retail participation contributes to liquidity.

Tibet GaoZheng Explosive Co., Ltd. (002827.SZ): Ownership Structure

• Mission: Provide high-quality civil explosives and blasting services to support infrastructure and national defense projects while ensuring safety and environmental protection.
• Safety & Compliance: Maintain strict adherence to national explosives regulations and industry safety standards; regular third-party audits and certifications.
• Innovation & R&D: Invest in product performance and safety enhancements, including electronic detonators, improved charge designs and dust/noise mitigation technologies.
• Regional Development: Commit to economic development of the Tibet Autonomous Region through local employment, supply-chain partnerships and infrastructure support.
• Integrity & Transparency: Uphold transparent reporting, anti-corruption measures and long-term stakeholder relationships.

• Core products: ANFO and emulsion explosives, detonators, industrial accessories and controlled blasting solutions sold to mining, construction and government projects.
• Services: Design and execution of blasting plans, technical consulting, post-blast monitoring and safety training contracts.
• Revenue model: Product sales (bulk explosives and components) plus higher-margin service contracts and project-based turnkey blasting solutions.
• Pricing drivers: Raw-material costs (oxidizers, fuels, emulsifiers), regulatory constraints, seasonal project demand and large infrastructure contracts.
• Risk controls: Strict inventory and transport controls, insurance, compliance programs and capital allocation to capture defense-adjacent contracts where permitted.

Tibet GaoZheng Explosive Co., Ltd. (002827.SZ): Mission and Values

• Product portfolio: ANFO (ammonium nitrate-fuel oil), emulsion explosives, water gels, detonators, and accessories.
• Manufacturing: continuous and batch production lines using automated mixing, emulsification and casting systems; facilities designed to produce ~200,000 tonnes of explosives annually.
• Quality & safety: multilayer QC labs, in-line testing (density, viscosity, detonation velocity), full traceability and compliance with national Q/QB and GB safety standards.
• R&D & technical services: blast design, on-site advisory, fragmentation optimization and environmental-risk mitigation for clients.

• Geographic focus: domestic PRC markets with logistics adapted to support remote mining districts and large infrastructure sites.
• Distribution: centralized production hubs feeding regional depots; specialized transport units and approved hazardous-material carriers for road and rail delivery.
• Workforce & training: site-specific safety training, certified handling personnel and emergency response teams to meet regulatory requirements.

• Annual production capacity: ~200,000 tonnes of explosives.
• Primary end markets: hard-rock mining, open-pit and underground operations, large civil engineering projects (dams, roads, tunnels).
• Compliance: production and transport governed by national explosives regulation and local permitting; routine third-party inspections and certifications.

• Domestic demand drivers: continued mineral exploration and extraction, large-scale infrastructure investment, and periodic engineering projects requiring blasting expertise.
• Competitive differentiators: integrated production-to-delivery model, technical service capabilities, and emphasis on safety & regulatory compliance.
• Risks: regulatory changes, commodity-cycle sensitivity in mining, transportation constraints for hazardous materials, and cost volatility for key inputs (ammonium nitrate, fuels, emulsifiers).

Tibet GaoZheng Explosive Co., Ltd. (002827.SZ): How It Works

• Core product manufacturing: powdered emulsion explosives, emulsion colloidal explosives, detonators, fuses, and detonating cords.
• Integrated services: dangerous-goods transport, blasting design, blasting construction execution, and specialized engineering support for large-scale mining and tunneling projects.
• R&D and formulation improvements to meet regulatory, safety, and performance demands (explosive sensitivity, energy output, stability in high-altitude/low-temperature environments).

• Product sales (explosives and initiation systems): primary revenue driver-bulk orders to state and private mining firms and infrastructure contractors.
• Services revenue: transport of hazardous materials, turnkey blasting contracts, on-site technical supervision and consulting.
• After-sales and maintenance: replacement detonators, detonating cord resupplies, and site-specific technical adjustments.

• Direct explosives sales typically provide higher gross margins but require capital tied up in raw materials and inventory.
• Integrated services exhibit lower gross margin per unit but stabilize cash flow and increase client stickiness through long-term blasting contracts.
• Logistics and hazardous-goods compliance represent a material cost center-transport, special packaging, and secure storage push logistics to roughly one-fifth of operating expenses.

• Production facilities produce both emulsion matrixes and initiation systems; vertical integration reduces external procurement risk for key inputs (oxidizers, emulsifiers, initiator compounds).
• Quality control and safety systems are critical-processes include batch testing for detonation velocity, sensitivity, and stability under temperature extremes.
• Strategic logistics hubs and certified dangerous-goods carriers enable timely delivery to remote high-altitude mines while complying with national transport regulations.

• Spot sales vs. framework contracts: framework contracts with major mining houses provide volume discounts and multi-year revenue visibility.
• Value-added pricing applies to turnkey blasting and engineering services, where project risk and technical complexity justify premium rates.

• With 5% of revenue directed to R&D (≈ ¥60 million in 2022), the company pursues formulation improvements to increase energy density and thermal stability-supporting premium product pricing.
• Cost pressures from logistics and raw materials are offset by process optimization, higher-margin service lines, and scale economies in high-volume explosive production.

Tibet GaoZheng Explosive Co., Ltd. (002827.SZ): How It Makes Money

• Primary revenue drivers: bulk explosives, detonators/initiators, and site blasting services for mining and infrastructure.
• Key demand catalysts: Yaxia Hydropower Station, expansion of regional railways, and commencement of large-scale mining projects in Tibet.
• Ownership/Support: State backing via the Tibet SASAC provides preferential access to regional projects and financing channels.

• Projected profit path: 270M CNY (2025), 390M CNY (2026), 570M CNY (2027) - reflecting higher demand and operating leverage.
• Risk vectors: regulatory controls on explosives, project timing risks, and raw-material/energy cost fluctuations.