Event
The company issued a half-year performance forecast for 2022: it is expected to achieve a net profit of 665-715 million yuan in the first half of 2022, an increase of 103.41% MUE 118.71% over the same period last year.
Brief comment
2022H1's homing net profit exceeded expectations, and 22Q2's performance increased month-on-month, setting a new high for a single quarter.
The company expects 22H1 performance to grow by 103.4% to 118.7%, corresponding to 2022Q2's net profit of 3.84-434 million yuan in a single quarter, an increase of 66.6%, 88.3%, and 36.2%, 54.0% and 22Q2, respectively, compared with the same period last year. As superhard material enterprises transfer part of their production capacity to nurturing diamonds, industrial diamond production capacity is tight; superimposed downstream photovoltaic, high-end manufacturing and other demand is growing rapidly, industrial diamond prices have risen many times, and the net interest rate is expected to reach 20% +.
In the middle reaches of India, diamond import and export data continue to verify the industry's high-profile demeanor, nurturing diamond overseas penetration continues to improve. Under the influence of the epidemic, the import data of India still increased rapidly, including US $1.53,1.55,2.03,1.00 and 110 million respectively from January to May in 22 years, which also increased by 77.3%, 84.4%, 157.1%, 25.1% and 46.0%. The total imports of cultivated diamonds accounted for 8.2% of the total imports of diamond products from January to May in 22 years. The export data showed a bright performance, reaching a monthly high of US $177 million / + 136.0% in May, accounting for 7.81% of the diamond category.
The number of HTHP leading presses has been steadily expanded, and the CVD method has broken through the batch production technology of more than 10 carats of cultivated diamond blanks. The company's HTHP six-sided jacking machine has steadily expanded its production, and its subsidiary Zhongnan Diamond plans to invest 1.15 billion yuan in the construction of high-grade industrial diamonds and precious diamonds (with a planned investment of 500 million yuan in 22 years). This project has been selected into the "Henan 2022 deficiency board" project. In CVD technology, the company has broken through the cultivation of diamond mass production technology, a single furnace MPCVD equipment can grow more than 14 10-carat single crystal blank, color grade Dmure E color, cleanliness grade VS or more, the product quality has reached the world-class level (data source: official account of Yuxi Industrial Group).
Ordnance Group ammunition leader, the performance loss in the field of special equipment is expected to improve. According to the official account of Northern Hongyang (a wholly owned subsidiary of Zhongbing Hongjian, mainly engaged in intelligent ammunition), Northern Hongyang won the bid for a certain service project for the first time at the end of May; at the end of June, a product trial-produced by the company as a general assembly unit successfully completed the flight test of the performance verification of the engineering prototype, this project is a key model project of a certain service. As a final assembly unit, Northern Hongyang Company has the capacity to undertake the final assembly trial production of such products has been further verified, laying a solid foundation for the follow-up production and trial production of similar products. It is expected that the follow-up company's performance loss in the field of special equipment is expected to continue to improve (of which the Northern Hongyang lost 2.35 and 243 million yuan respectively in 20 and 21 years).
The personnel of the management has changed, and the reform of state-owned enterprises has been continuously promoted. Recently, the company announced the appointment of Mr. Wang Hongan as the general manager and Mr. Wang Xinxing as the deputy general manager of the company. Among them, in June, the Arms Industry Group held a three-year action promotion meeting on reform. Chairman Liu Shiquan made it clear that "continue to promote tenure and contract management with high quality and full coverage, incentive measures more systematic integration, accurate and effective, mixed reform of enterprise depth conversion mechanism, reform of special projects in depth, personalized reform at all levels of sub-enterprises, remarkable results have been achieved in improving the vitality and efficiency of state-owned enterprises." the company is expected to benefit from the reform of state-owned enterprises. Further stimulate vitality and improve operational efficiency.
Investment suggestion: based on the company's better-than-expected 2022Q2 performance, the profit forecast is raised. It is estimated that the revenue from 2022 to 2024 will be 94.4yuan, 116.0 yuan and 13.93 billion yuan respectively, up 25.6%, 23.0% and 20.0% respectively. The net profit of homing was 12.5,16.3 and 2.06 billion yuan respectively, which increased by 157.1%, 30.6% and 26.4% respectively, corresponding to 33, 25 and 20 times PE in 22-24 years, maintaining the "buy" rating.
Risk tips: cultivating diamond demand is less than expected, competition intensifies and gross profit margin drops rapidly, etc.