\u3000\u3 Jiangsu Eastern Shenghong Co.Ltd(000301) 071 Henan Liliang Diamond Co.Ltd(301071) )
Performance review
2.27 the company announced that the revenue in the 21st year was 498 million yuan, + 103.50%, and the net profit attributable to the parent was 240 million yuan, + 228.17%, which was close to the upper limit of performance forecast (232 ~ 245 million yuan). The net interest rate is 48.07% (+ 18.26pct) (the increase of net interest rate is less than that of gross profit rate, mainly due to the increase of total profit and income tax payment). 1h21 / 3q21 / 4q21 revenue growth was 125% / 81% / 96% respectively, and the net profit attributable to the parent company was 327% / 194% / 165%. It is proposed to distribute 10 shares in cash of 10 yuan (including tax) to increase 10 shares.
Business analysis
Actively expand production, increase both volume and price, and increase the revenue of the three major businesses. In the 21st year, the equipment in the new plant was put into operation successively, and the revenue of diamond single crystal, micro powder and cultivated diamond accounted for 27.5% / 31.3% / 39.6%, with a same increase of 38.1% / 54.5% / 428.1%. It can mass produce 2-10 carat cultivation drill, and has exceeded 30 carat (21h125 carat) in the laboratory stage. Component price: Sales of 1.345 billion carats in 21 years, with an increase of 33%, and the estimated average price increased by 53%. It is planned that the Baojing project will be completed in 22 years and the second phase of the power project will be put into operation quickly.
The gross profit margin of the three products increased significantly in 21 years, and the comprehensive gross profit margin of 4q21 increased year-on-year + month on month. The gross profit margin in the 21st year is 64.07% (+ 20.48pct), of which 1h21 / 3q21 / 4q21 gross profit margins are 65.21% (+ 22.34pct), 59.31% (+ 22.56pct) and 66.34% (+ 15.81pct) respectively. The continuous improvement of gross profit margin is mainly as follows: 1) the price of cultivated drilling products, the factory quality and the structural price rise, while benefiting from technological progress and the reduction of single carat production cost; 2) There is a strong demand for downstream cultivation drill, upstream manufacturers have switched from industrial drill to cultivation drill, and the supply of industrial drill is relatively tight + the demand for industrial drill from China’s new photovoltaic energy and consumer electronics has increased; By product, the gross profit margin of single crystal is 57.93% (+ 18.49pct), micro powder is 50.02% (+ 9.66pct), and cultivated diamond is 81.38% (+ 14.56pct).
During the period, the expense rate was stable, including increased R & D investment and decreased sales and management rates. During the 21-year period, the expense rate is 10% (-0.21pct), including R & D expense rate of 5.33% (+ 1.26pct), sales expense rate of 1.12% (-0.81pct) and management expense rate of 8.39% (+ 0.92pct). Inventory and receivable turnover accelerated. Days of inventory turnover (- 41 days), days of accounts receivable (- 228 days).
Investment advice
China’s leading HTHP enterprises have global price competitive advantages, logic and space for price increase. In addition, structural price increase and cost reduction under technological progress resist the pressure of industry expansion and intensified competition. It is estimated that the EPS of 22-24 years is 6.70/9.56/11.84 yuan, corresponding to 43 times of pe22 years, maintaining the “buy” rating.
Risk tips
The production of the press was less than expected, the price of drill fell, and the cultivation of terminal demand was less than expected.
