It is proposed to raise 8-1.05 billion yuan for cultivating diamonds to expand production and repay debts, and the increase has been accepted by the CSRC according to the company's announcement on August 11, after the CSRC examined the application materials submitted by the company for administrative license for non-public offerings, it is considered that the application is in compound legal form and shall be accepted. The company plans to raise 8-1.05 billion to Qiao Qiusheng, the controller, at a price of 7.14 yuan per share for cultivating diamond production capacity expansion and repayment of debts, among which the cultivation diamond project plans to invest 910 million in equipment purchase, with a construction period of three years and a production capacity of 590,000 carats per year; after reaching production, the estimated annual sales income is 970 million, the average annual profit is 280 million, and the average annual net profit is 240 million. After the fixed increase, Qiao Qiusheng's direct and indirect holdings will rise from 20.36% to 27.73% at most.
The company is one of the double leaders in China's "nurturing diamond + industrial diamond" industry, which is comparable to the Red Arrow (Central and South Diamond). On the one hand, it fully demonstrates the confidence in the company's long-term and rapid development, on the one hand, it fully demonstrates the confidence in the company's long-term and rapid development, on the other hand, by vigorously improving the diamond production capacity, the company can achieve a substantial increase in business income and net profit, and the performance is expected to continue to improve, and the leader is expected to rise again.
The cultivation of the diamond industry is close to the 10% inflection point, which is equivalent to the new energy vehicles in 2020. the golden investment period has begun (1) it is estimated that by 2025, the global demand for cultivating diamond raw stones will increase from 9.3 billion yuan in 2021 to 31.3 billion yuan, with a compound growth rate of 35% in 2022-2025. In June 2022, India's imports / exports of cultivated diamond blanks increased by 47% over the same period last year. 57% of imports / exports in January-June increased by 72% and 81% over the same period last year, and the prosperity continued to rise.
(2) in 2019, the average domestic market penetration of new energy vehicles was less than 5%. The average penetration rate of domestic new energy vehicles exceeded 10% in 2021 and reached 19% at the end of 2021, a record high. India's cultivated diamond import and export permeability was less than 5% from 2021 to 2022, and the import and export permeability doubled from 2021 to 2022, approaching the 10% inflection point, which is expected to replicate the high growth of new energy vehicles. It is estimated that by 2025, the penetration rate of global cultivated diamond sales will reach 16%, and the penetration rate of the United States, as a major consumer, will reach 23%.
Yellow River whirlwind: cultivate diamond to expand production and speed up + reduce historical burden to promote performance release, performance elasticity, high temperature and high pressure method + CVD method, the leading rise again: the company is one of the enterprises with the largest number of six-sided top presses (high temperature and high pressure method) in the industry, the strongest technology and the most complete industrial chain, while stepping up the research and development of CVD single crystal and the third generation semiconductor applications and promotion. We believe that the cultivation of diamonds by CVD method is the general trend of cultivating diamonds with large particles and gemstones, and the high temperature and high pressure method is also iterating continuously, both of which have good opportunities. As one of the double leaders of "cultivating diamond + industrial diamond" industry, the company develops high temperature and high pressure + CVD method at the same time. With the strong downstream demand and the reduction of historical burden, the company is expected to rise again, leading China's superhard material industry to enter a new stage of development.
Profit forecast and valuation
It is estimated that the company's 2022-2024 net profit is 4.1 million yuan, up 844%, 53%, 38%, corresponding to the PE of 38-25-18, maintaining the "buy" rating.
Risk hint
Cultivate diamond competition pattern and profitability change, cultivate diamond new technology iteration