Brief comment on performance
The company issued an announcement on 23.1.30 predicting that the net profit of returning home in 2022 will be 145 million to 175 million yuan, an increase of 58% to 90% over the same period last year, and the deduction of non-return net profit to 110 million yuan, an increase of 66% to 112% over the same period last year.
In each quarter, 4Q22 expects to realize a net profit of 15.77% to 4.577 million yuan, which is-26% higher than that of the same period last year.
4Q22 deducts 300.3 million yuan in non-net profit,-96% less than 277% of the same period last year.
Business analysis
The main business expects 4Q22 income to decline slightly from the previous month, and the net interest rate to increase slightly from the previous month. 4Q22 is the off-season of exploitation, and it is expected that the income of oil composite business will decline from the previous month, the income of precision processing will increase slightly from the previous month, and the overall income of the main business will decrease slightly from the previous month. 4Q22 net interest rate is expected to increase slightly month-on-month (close to 1H22 level), mainly due to a reduction in 3Q22 government subsidies and a slight decline in net interest rate.
The development of diamond business 4Q22 contributed less, while Tianxuan Semiconductor showed a net loss. Tianxuan Semiconductor as of 4Q22 stable operation of 100 equipment, nurturing Diamond 2H22 is expected to contribute 5 million yuan of income, the volume is relatively small, Tianxuan Semiconductor expects a net loss of more than 10 million yuan in 2022, a net loss of about 6 million yuan. Regardless of the influence of Tianxuan Semiconductor, the net profit of 4Q22 is expected to be flat compared with the previous month.
The global wholesale price of cultivated bare diamond has stabilized since mid-September 2022, and the profit of MPCVD equipment is expected to increase gradually in 2023. According to the LGDeal,2023 from January to 26, the global wholesale average price of cultivated bare diamond dropped by single digits compared with the previous month, of which the average prices of carat CVD and 1.5-1.99-carat CVD rebounded by single digits. The company expects 1Q23 to put into production about 200 units of equipment and to operate 400 units by the end of 2023. The short-term price stabilization of nurturing drills is expected to support 2023 performance and contribute to incremental profits.
Investment suggestion
Looking forward to 2023-2024, the main industry will benefit from oil service upstream + super-hard tool product upgrading, looking beautiful; CVD nurturing drill put into production to increase profits. To maintain the profit forecast, the estimated mother net profit in 2022-2024 is 1.6 billion yuan, with an increase of 79%, 40%, 39%, and the corresponding EPS is 0.34, 0.47, 0.66 yuan, respectively, and the corresponding PE from 2022 to 2024 is twice as much as 42-30-22, maintaining the "over-holding" rating.
Risk hint
Oil price fluctuations; CVD nurtured diamond production capacity growth is not as expected; cultivated diamond rough / naked diamond wholesale prices fell; exchange rate fluctuations; cultivated naked diamond wholesale price accuracy.