The company released its 2023 annual report and 2014 quarterly report
The company's 24Q1 revenue was 240 million, an increase of 45%, mainly due to the increase in the company's production capacity; net profit of 110 million yuan increased by 42%, and after deducting non-return of 90 million yuan, the same increase of 41%;
Revenue in 2023 was 750 million yuan, down 17%, net profit attributable to mother was 360 million, down 21%, and deducted from non-return of 310 million yuan and 30%; of these, 23Q4 revenue was 190 million, down 18%, and net profit attributable to mother was 100 million yuan, a decrease of 9%.
In 2023, the company distributed a total of 130 million yuan in cash dividends of 5 yuan (tax included) for every 10 shares to all shareholders, with a dividend rate of 36%.
Looking at the 2023 spin-off: the company's diamond single crystal revenue was 210 million (27%), with a gross profit margin of 43%, a decrease of 10 pct; mainly due to a drop in sales price; 300 million (39%) of diamond powder revenue, a decrease of 6.5%, a gross profit margin of 60%, and an increase of 6 pcts, mainly due to price increases; revenue from cultivating diamonds was 230 million (30%), with a gross profit margin of 53%, and a decrease of 26 pcts, mainly due to a decrease in sales price.
The synthetic diamond industry is an important part of the superhard materials industry. It is a “new functional materials industry” among the strategic emerging industries supported and encouraged by national policies:
In the future, the company will continue to focus on independent innovation. Through process technology innovation, introduction of high-quality equipment, improvement of management level, and optimization of service details, the company will give full play to the company's technical advantages, management advantages, brand and customer resource advantages, and scale effect advantages, accelerate the completion of process improvement of existing products and research and development of new products, and accelerate the release of production capacity.
In 2024, the company will adhere to the development strategy of “focusing on resources and strengthening the main business” and adhere to the business strategy of “restructuring, creating efficiency, and building a brand”. The detailed business plan is described below:
(1) Currently, in the international market, the market penetration rate of the cultivating diamond industry continues to grow. The company plans to focus on cultivating the layout of the downstream diamond terminal market, expanding the company's own brand system and retail flagship stores, and promoting the development of the cultivating diamond jewelry industry.
(2) Increase investment in R&D to ensure continuous innovation capabilities
Introduce R&D personnel with a level of knowledge and experience in practice, increase investment in R&D facilities and testing instruments and equipment, improve scientific research and development and product testing capabilities, further expand product types and application fields, improve product quality and production efficiency, and enhance independent innovation capabilities.
(3) Consolidate management foundation and continuous management innovation
We will continue to strengthen our management advantages, take good care of the management dimension, and explore the depth of management. Improve various rules, regulations and internal control systems, and establish a more scientific, efficient and reasonable decision-making system; in terms of information management, optimize IT processes, deepen the integration of the two, automate production and management processes, and strengthen high-end intelligent manufacturing capabilities; in terms of cost management, strengthen quality awareness, highlight process control, improve production and marketing coordination efficiency, and focus on reducing costs and increasing the efficiency of key raw and auxiliary materials.
(4) Strengthen technology upgrading, optimize product structure, and customer structure. We will continue to take good care of product technology upgrading, be guided by customer needs, clarify technology upgrade goals and ideas, and innovate products. First, further expand the overall revenue share of cultivated diamond products; second, guarantee the supply of core customers of diamond monocrystalline products; third, expand the technical advantages of diamond powder products and maintain a leading edge in the field of photovoltaic energy sources.
Adjust profit forecasts to maintain “buy” ratings
The company has now formed three core product systems: diamond single crystal, diamond powder, and cultured diamond. The product structure is rich, the synergy effect is obvious, and it can respond quickly to market demand. On the one hand, diamond single crystals and diamond powder are upstream and downstream of the industrial chain. The company also has R&D, production and sales capabilities for diamond single crystals and diamond powder. It can use some self-produced diamond single crystals to be made into diamond powder through deep processing processes such as crushing, ball grinding, purification, and sorting, and then sold abroad. The company's product synergy not only increases the added value of diamond single crystals, but also increases the turnover rate of diamond single crystal products.
On the other hand, the company's newly designed and assembled new equipment and intelligent production lines can be used to produce diamond single crystals and cultivated diamonds by using different raw material formulations and setting different synthesis process parameters. The company will adjust the allocation of production capacity between single diamond crystals and cultivated diamond products in due course according to market demand and production plans, fully grasp market trends and opportunities, and respond quickly to market demand. Considering that the company's 23-year performance fell short of expectations, we adjusted our profit forecast. The company's 24-26 revenue is estimated to be $1,100/13.98/1,706 million yuan respectively (24-25 years ago, respectively), net profit to mother of $520/652 million yuan ($591/731 million, respectively), EPS was 2.0/2.5/3.1 yuan/share, and the corresponding PE was 16/13/10X, respectively.
Risk warning: macroeconomic and market demand fluctuations, technology updates, risk of exchange rate fluctuations, etc.