Event: the company issued a 2022 performance forecast. In 2022, the company expects to achieve a net profit of 445-475 million yuan, an increase of 85.76% Mel 98.28% over the same period last year, and an estimated deduction of RMB 430-450 million yuan, an increase of 87.64% RMB96.37% over the same period last year. During the reporting period, the company made every effort to promote the construction of new production capacity, increased investment in the equipment of "Shangqiu Project" and "Power Phase II Project" after the fixed increase of funds, and achieved a high increase in performance.

In December, the import of cultivated diamond blanks was + 44% compared with the previous month, and the middle and upper reaches benefited: in December 2022, India's cultivated diamond blank imports were US $111 million, down 15.53% from the same period last year and up 44% from the previous month; and the export value of cultivated diamond bare diamonds was US $102 million, down 0.90% from the same period last year. At present, from Valentine's Day to Valentine's Day, it is still the peak season for jewelry consumption in the United States, and the export of nurturing naked diamonds is expected to increase month-on-month under the demand for inventory replenishment in downstream channels.

After 9-10 months of stock elimination in the middle reaches, the import ratio of drilling blanks continues to recover. The diamond market in the United States has a large base and strong resilience, and the middle class continues to turn to cultivate diamond consumption under the limitation of purchasing power, which has a broad space for drilling replacement, and the penetration rate is expected to continue to increase. Looking forward to 2023, the price of drilling blank products will be further differentiated, and the performance flexibility of manufacturers with high production efficiency and high product quality will be greater.

The most pure target in the diamond field, production capacity layout to speed up growth: according to the company's fixed growth plan, the company will add more than 1800 new six-sided jacking machines in the next three years, the installed capacity will reach more than 2500, and the average annual production will be more than 600. the speed of production expansion is the fastest among comparable listed companies. The company raises investment project press mainly for forging φ 800 type, casting φ 800 type and upgrade model, the production efficiency is higher.

Under the condition of full load operation, the company's single six-sided jacking press (φ 800) can produce about 5 million carats of diamond single crystal per year, or 0.15-0.20 million carats of cultivated diamonds.

Investment suggestion: power Diamond, as a rising star in the field of synthetic diamond in China, enters the first echelon of the industry through continuous technology research and development. The three main businesses of the company are booming in production and marketing, and are increasing the layout of production capacity to enjoy the high growth dividend of the industry, and the performance is expected to continue to improve rapidly. The company's 2022-2024 net profit is expected to be 835x1099 yuan, respectively. The corresponding PE valuation is 44x/24x/18x, maintaining the "buy" rating.

Risk hint: the company's production capacity is not as expected, the industry competition is intensified, and the downstream demand is not as expected.