Products

The Group's principal business activity is in the production and sale of commercial explosives products, comprising explosives-grade ammonium nitrate, explosive devices, initiators and detonators, both under its own brand name ("Yinguang") and those of third parties. It also provides after-sales services to its customers such as technical assistance related to the detonating activities.

The Group's products are mainly used by the mining, hydroelectric and infrastructure construction industries, for activities such as coal mining, oil exploration, construction of hydroelectric dams, roads and railways, and large construction projects. Its range of products can be broadly categorised as follows

• Explosive devices, such as boosters and seismic charges. Boosters are used to enhance the power of the explosions and seismic charges are used mainly in oil and gas exploration.
  
  
• Industrial fuse and initiating explosive devices, such as detonating cords and non-electric tubes. These devices are used to initiate the detonation process.
  
  
• Industrial detonators, such as non-electric detonators and piston non-electric detonators. These devices are mainly used to initiate explosions, either through boosters or applied directly on the explosives.
  
  
• Explosive-grade ammonium nitrate. Explosive-grade ammonium nitrate is one of the main raw materials to manufacture explosives.

Product Distribution and Market Segment

The Group sells its products to both domestic and overseas customers.

In the domestic market, its products are distributed mainly through local distributors in major provinces such as Henan, Shanxi and Zhejiang, and in major cities such as Beijing and Shanghai. It also sells directly to end-users such as mining and construction companies.

Australia is currently the Group's largest overseas market in terms of revenue contribution. For the overseas market, the Group exports its products through export distributors to customers in more than 10 countries, including the Australia, South Africa, Mongolia, India, Kazakhstan and Kyrgyzstan. Its largest overseas customer is Orica Australia. Orica is the world's largest supplier of explosive products. The Group also sells its products to export distributors in China, who in turn export the products to their overseas customers.