The company released its 2022 annual report on March 11. ① 2022: the company realized revenue of 910 million yuan, an increase of 81.9% over the same period last year; gross profit margin of 63.3%, down 0.8 pct from the same period last year; net profit of 460 million yuan, an increase of 92.1% over the same period last year; and net profit of 50.8%, an increase of 2.7pct over the same period last year. ② 4Q22: the company's income was 230 million yuan, up 50.4% from the same period last year; the net profit from home was 110 million yuan, up 40.6% from the same period last year; the net profit rate from home was 47.6%, down 3.3pct from the same period last year; and the gross profit margin was 58.3%, down 8.0pct from the same period last year.
Cultivate the rapid growth of diamond revenue. ① nurtured diamonds: revenue in 2022 was 390 million yuan, an increase of 97.1% over the same period last year, with revenue accounting for 42.9% and gross profit margin of 79.3%, down 2.1pct from the same period last year. The income of 2H22 is 170 million yuan, which is 24.9% lower than that of 1H22, and the gross profit margin is 73.7%. The decrease of 9.8pct is mainly due to the decline in product prices. ② diamond single crystal: the revenue in 2022 was 170 million yuan, an increase of 27.0% over the same period last year, with revenue accounting for 19.2%, and a gross profit margin of 52.7%, down 5.2pct from the same period last year. ③ diamond powder: 2022 revenue of 320 million yuan, year-on-year increase of 103.0%, revenue accounted for 34.9%, gross profit margin of 54.0%, year-on-year growth of 4.0pct, we judge that the demand of the micro-powder industry continues to be strong.
During the 4Q22 period, the expense rate decreased 4.3pct compared with the same period last year. ① 4Q22: the expense rate during the period is 7.1%, a decrease of 4.3pct compared with the same period last year. The expenses for sales, management and R & D are 1 million yuan, 6 million yuan and 13 million yuan respectively, the financial income is 3 million yuan, and the cost rates are 0.4%, 2.4%, 5.6% and-1.4% respectively, compared with the same period last year-0.3pct,-1.9pct,-0.8pct,-1.3pct. Among them, the month-on-month increase in R & D expenses (1.1pct) is mainly due to the increase in R & D projects; the increase in financial income is mainly due to the increase in interest income. ② 2022: the expense rate during the period was 5.6%, a decrease of 4.4pct compared with the same period last year. The expenses for sales, management and R & D are 6 million yuan, 17 million yuan and 44 million yuan respectively, the financial income is 16 million yuan, and the cost rates are 0.7%, 1.8%, 4.9% and-1.7% respectively, compared with the same period last year-0.5pct,-1.2pct,-0.5pct,-2.2pct.
Maintain high prosperity downstream. Middle reaches of ①: according to GJEPC,22, India imported nurturing diamonds worth US $1.47 billion for the whole year, an increase of 32.2% over the same period last year, with a penetration rate of 7.4%, an increase of 1.5pct over the same period last year; export cutting, grinding and breeding diamonds worth US $1.72 billion, an increase of 50.5%, a penetration rate of 7.0%, and an increase of 2.4pct over the same period last year. The amount of 2M23 imported cultivation drill blanks decreased by 59.1% compared with the same period last year, while the export cultivation drill blank amount increased by 7.3% over the same period last year. Downstream of ②: according to data from US professional jewelry retailers counted by Tenoris, the market share of 22-year nurturing diamonds in sales volume / sales caliber is 33.4% / 11.8% respectively; the price range of the most popular products rises to $5000-7500 in 2022, and downstream consumers are more willing to spend.
Profit forecast and valuation: we assume that the company's production expansion will land smoothly, taking into account the 22-year price change trend of cultivation drilling, assuming that the 23-year cultivation drill ex-factory price decreases slightly, the company's 2023-25 revenue is expected to be 13.58,19.81 and 2.344 billion yuan respectively, an increase of 49.9%, 45.8% and 18.3% over the same period last year, and the net profit of return to the mother is 7.38,10.23,1.195 billion yuan respectively. Year-on-year growth of 60.3%, 38.7%, 16.8% Jiao 21-24e profit CAGR 62%. Taking into account the cultivation of drilling downstream to maintain a high economy, we judge that the gradual landing of the company's investment project in 2023 is expected to drive sustained growth, and the company can be given a certain valuation premium, with reference to the comparable company, giving the company a 23-year PEG of 0.45-0.5 times, corresponding to a reasonable value range of 142.62-158.47 yuan per share (the dividend plan has not yet been implemented and does not consider the impact of increasing shares for the time being), "better than the market" rating.
Risk hint. The risk of insufficient demand downstream, the risk of the decline of residents' consumption capacity, and the risk aggravated by competition.