Technology path: hthpvscvd, how to deduce the long-term competition pattern?
HTHP and CVD are two mainstream technology paths at present. The cultivated diamonds produced by the two technologies have their own advantages and disadvantages. The color grade of HTHP is better, while CVD has advantages in clarity. Combined with the perception of terminal retail, the color advantage of HTHP is relatively easier for consumers to perceive, and it is difficult to distinguish impurities with the naked eye after the cleanliness reaches about vs. With regard to the future interpretation of HTHP and CVD, we believe that the prospect of HTHP in the field of consumer grade diamond cultivation is worthy of long-term optimism for the following reasons: 1) at present, the gap between supply and demand in the industry is still significant, and the two technology paths will probably not run against each other in the “bigger cake” stage; 2) China’s CVD production capacity is dominated by imported equipment, and it will take time for self-developed equipment to increase on a large scale; Overseas, India’s CVD production capacity is large, but the grade is low, which is also difficult to impact the existing competition pattern; 3) At present, the mainstream carat number in the consumer cultivation diamond market is 1-2 carats, and HTHP has outstanding advantages in this range.
Single machine model: what is the difference in output value and profit margin between new and old models of equipment?
At present, the mainstream six sided press used to cultivate diamond production in the industry mainly includes 650 and 850 models. Combined with industrial research information and some reasonable assumptions, we calculated the monthly output value and profit margin of the above two models of equipment. The calculation results show that the monthly output value of 850 press is about twice that of 650 equipment, and the profit margin is significantly higher than that of 650 equipment. Considering that the new superchargers in the future industry are all 850 models, under the background of significant supply and demand gap in the industry and stable or even upward product prices, it is expected that the number of new 850 compressors will increase and drive the improvement of production capacity structure, which will continue to improve the profitability of leading enterprises in the next 1-2 years.
Competition barrier: is there any risk of deterioration of the industry competition pattern due to the huge profits?
Due to the high profit margin of the diamond industry at this stage, it naturally has a strong attraction to all kinds of “players”. Affected by the inherent impression of industrial diamond production and manufacturing, the market is generally worried about whether there is a risk of “oversupply” and deterioration of “competition pattern” in the industry. We believe that from the short-term and long-term time dimensions, the industry’s high-quality production capacity still has high barriers. In the short term, it is expected that the press equipment in the industry will mainly come from new production in the future. Affected by various factors such as environmental protection policies, the probability of large-scale expansion of the press industry in the short term is not high, and the high capital barrier also limits the influx of small and medium-sized “players”; In the long run, after a long period of evolution, leading companies are expected to gradually establish an all-round moat of scale + technology + channel, and continue to enjoy the high growth dividend of the industry.
Investment advice
It is expected to continue to enjoy the high growth of the industry, so as to realize the rapid growth of revenue and profit. Recommend industry rookies Henan Liliang Diamond Co.Ltd(301071) with outstanding business accuracy and excellent profitability, and pay attention to Henan Huanghe Whirlwind Co.Ltd(600172) , North Industries Group Red Arrow Co.Ltd(000519) , Beijing Worldia Diamond Tools Co.Ltd(688028) , Sf Diamond Co.Ltd(300179) and Sinomach Precision Industry Co.Ltd(002046) .
Risk statement
The demand for diamond cultivation is less than expected, the promotion of technology R & D is less than expected, and the short-term large-scale expansion of CVD production.
