Investment advice
The global demand for cultivated diamonds continued to be strong. In January, India’s import and export increased by 78% / 69% and China’s Amoy cultivated diamond accessories increased by 146%. Jewelry brands that pay attention to the global leader in high-quality production Henan Liliang Diamond Co.Ltd(301071) / North Industries Group Red Arrow Co.Ltd(000519) / Henan Huanghe Whirlwind Co.Ltd(600172) and actively layout and cultivate diamonds downstream.
Market Review
In recent January (2022.1.17 ~ 2022.2.18), the Shanghai Composite Index, Shenzhen Component Index and Shanghai and Shenzhen 300 fell 1.57%, 5.47% and 2.46% respectively, and the cultivation diamond sector rose 4.25%, outperforming Shanghai and Shenzhen 3006.71 PCT. In terms of sector comparison, diamond cultivation is at the forefront. In terms of individual stocks, Chow Tai Fook, Henan Liliang Diamond Co.Ltd(301071) , Shanghai Yuyuan Tourist Mart (Group) Co.Ltd(600655) led the gains, while Zhengzhou Sino-Crystal Diamond Co.Ltd(300064) , North Industries Group Red Arrow Co.Ltd(000519) , Beijing Worldia Diamond Tools Co.Ltd(688028) led the declines.
Data tracking:
In January, India’s imports and exports of cultivated diamonds continued to grow at a high rate: in January of 22, India imported 153 million US dollars of cultivated diamond blanks, with a growth rate of 77.9% and a penetration rate of 11.21%, and exported 122 million US dollars of cultivated diamond bare diamonds, with a growth rate of 69.1% and a penetration rate of 5.95%. The import growth rate was still higher than the export growth rate, and the downstream demand continued to be strong
In January, the year-on-year growth of China’s Amoy cultivated diamond jewelry: the total sales of Amoy cultivated diamond jewelry in 21 years was 74.1 million yuan. By quarter, the sales volume began from 2q21. The sales volume of hand jewelry in 21 years accounted for 93% and the average price was 892 yuan. Diamondfoundry / satirona / sadiro / huiyiyuan / kailishi / xiaobaiguang are the top six in the industry. In January 22, the sales volume of cultivated diamond jewelry was 4.7742 million yuan, an increase of 145.9% and a month on month decrease of 36.7%.
Industry dynamics
Industry news: 1) China: Beijing Worldia Diamond Tools Co.Ltd(688028) ‘s flagship store of Andia, a high-end diamond jewelry brand, officially landed in tmall mall. Anndia tmall flagship store launched three jewelry series; Cultivate the diamond upstart brand xiaobaiguang lightmark brand and open its first store in Shanghai; Cultivate diamond jewelry brand anota and settle in fat tiger’s Beijing Sanlitun flagship store; Beijing Worldia Diamond Tools Co.Ltd(688028) it is proposed to invest 330 million yuan to build CVD diamond cultivation and diamond functional materials project. 2) Abroad: lusix, an Israeli Diamond Company, raised US $45 million; Igda (International Diamond cultivation Association) upgraded 2.0 to help cultivate the diamond industry; The sales volume of rough diamonds in the first sales cycle (1.17-2.1) of DeBeers in 2022 was US $660 million (tentative), compared with us $663 million in the same period last year. The demand for rough diamonds in the first sales cycle in 2022 continues to be strong, and the company will increase its inventory; A princess cut, 16.41 carats, G color, VVS2 clarity and CVD cultivated diamond without post color modification broke the world record.
Key announcement: North Industries Group Red Arrow Co.Ltd(000519) it is predicted that the net profit attributable to the parent company in 21 years is estimated to be 450-490 million yuan (+ 63.90% – 78.47%); Beijing Worldia Diamond Tools Co.Ltd(688028) it is proposed to invest 330 million yuan to build CVD diamond cultivation and diamond functional materials project; Henan Huanghe Whirlwind Co.Ltd(600172) it is predicted that the net profit attributable to the parent company in 21 years will be 41 million yuan; Sinomach Precision Industry Co.Ltd(002046) it is predicted that the profit in the 21st year will be 120 million yuan ~ 160 million yuan, an increase of 92.71% ~ 156.95% at the same time; North Industries Group Red Arrow Co.Ltd(000519) 120000 carat cultivation diamond project has reached the expected usable state; St King Kong predicted that the net profit attributable to the parent company in 21 years will be estimated at a loss of 1 billion yuan to 1.5 billion yuan, and the estimated loss after deduction is 380 million yuan to 760 million yuan.
Risk tips
The price of upstream expansion fell; Downstream consumer education was less than expected.
