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力量钻石(301071):2022年业绩符合预期 产能建设稳步推进

Power Diamond (301071): 2022 results are in line with expectations, and production capacity construction is progressing steadily

開源證券 ·  Mar 14, 2023 19:16  · Researches

The 2022 performance was in line with expectations, capacity construction progressed steadily, maintaining the 2022 performance of “buy” rating companies in line with expectations. 2022 revenue was 906 million yuan (+81.85%), net profit was 460 million yuan (+92.12%), and net profit after deduction was 437 million yuan (+90.70%). The slowdown in growth in the second half of the year was mainly due to the pressure on downstream demand compounded by falling prices, but looking at the whole year, benefiting from the continuous implementation of production capacity, rapid growth in production, and rapid growth in revenue and profit. Short-term performance was disrupted by downstream demand and prices. We lowered our profit forecasts for 2023, 2024 and added 2025 earnings forecasts. We expect the net profit of 2023-2025 to be 683/90/1,150 million yuan (the original value for 2023-2024 was 770/1,150 million yuan), the corresponding EPS was 4.72/6.21/7.94, and the current stock price corresponding to PE is 26.1/19.8/15.5 times, but in the long run, it is expected that the continuous increase in cultivation penetration will be compounded by the steady expansion of the company's production capacity , we maintain our “buy” rating.

The revenue contribution of the diamond cultivating business increased steadily. The revenue performance of the diamond powder business exceeded expectations (1) Cultivating Diamonds: revenue of 389 million yuan (+97.12%), a steady increase of 3.3 pct to 42.9%. It is expected that the share of cultivated diamonds will increase further in the future; (2) Diamond single crystal: revenue of 174 million yuan (+27.04%), accounting for 19.2%; (3) Diamond micro powder: revenue of 316 million yuan (+103.03%), accounting for 34.9% of revenue, exceeding expectations.

Cost ratio optimization, increased profitability, continuous investment in R&D consolidates competitive advantage The overall gross margin in 2022 was 63.29% (-0.78pct). By product, the gross margin of a single diamond crystal was 52.70% (-5.23pct), mainly due to rising raw material prices; the gross margin of diamond powder was 54.00% (+3.98pct), mainly due to an increase in sales prices; the gross margin of cultivated diamonds was 79.25% (-2.13pct), mainly due to a decrease in sales prices; the overall net profit margin in 2021 was 50.78 % (+2.71 pct) Expense side:

The company's expense rate in 2022 was 5.63%, a year-on-year decrease of 4.36pct. The sharp decline in the period fee rate was mainly due to the scale effect of the sharp increase in sales scale.

Midstream demand is under pressure in the short term, and the company's production capacity is expanding steadily to wait for downstream demand to pick up. Looking at midstream demand, India's import and export growth rate for diamond rough cultivation is relatively fast, and the penetration rate continues to increase. In 2022, the import and export volume of rough diamonds cultivated in India increased 32.19%/50.47%, respectively, and the import and export penetration rate was 7.4%/7.0% respectively, up 1.5/2.4 pct over the previous year. Looking at the company's production capacity, the company's total output increased by 49.82% to 1,997 million carats, mainly because the company's new plants were put into operation one after another and production capacity was gradually released; in September 2022, the company's fixed increase project was officially launched, and production capacity expanded steadily to wait for downstream demand to pick up.

Risk warning: Production capacity investment falls short of expectations, and the development of the diamond cultivation market falls short of expectations.

The translation is provided by third-party software.


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