This week’s market:
The social services (Shenwan) sector index rose or fell by – 3.14% this week, ranking 22 / 31 in the rise and fall of Shenwan industry. Shanghai Stock Index (- 1.13%), Shenzhen Component Index (- 0.35%), Shanghai and Shenzhen 300 (- 1.67%) and gem index (+ 1.03%).
Ranking of sub industries: SW Education (+ 1.36%), SW sports II (- 2.32%), SW hotel catering (- 4.25%), SW professional services (- 4.45%), SW tourism and scenic spots (- 4.52%).
Top five gainers in social service industry: Kaiyuan Education Technology Group Co.Ltd(300338) (+ 16.19%), Dalian My Gym Education Technology Co.Ltd(002621) (+ 9.69%), Shanghai Xinnanyang Only Education & Technology Co.Ltd(600661) (+ 8.57%), Offcn Education Technology Co.Ltd(002607) (+ 7.79%), Jiangsu Chuanzhiboke Education Technology Co.Ltd(003032) (+ 5.39%);
The top five declines in social service industry: Chengdu B-Ray Media Co.Ltd(600880) (- 18.57%), Beijing Dataway Horizon Co.Ltd(301169) (- 16.31%), Shenzhen Anche Technologies Co.Ltd(300572) (- 12.15%), Utour Group Co.Ltd(002707) (- 11.46%), Huatian Hotel Group Co.Ltd(000428) (- 10.77%).
Core view:
According to the global diamond industry 20212022 released by Bain company, affected by the epidemic, the sales of diamond jewelry decreased by 14% and the sales of rough diamonds decreased by 31% in 2020. In 2021, the diamond industry reversed strongly, and the shortage of supply was transformed into sales revenue and the profit margin of the industrial chain increased.
Revenue side: the growth rate was higher than expected and exceeded the level before the epidemic. In 2021, revenue in the diamond mining sector increased by 62%, in the cutting and polishing sector by 55%, and in the diamond jewelry retail sector by 29% – all higher than before the epidemic.
Profit margin: in 2021, the profit margin of the whole industrial chain will quickly return to the level before the epidemic. Midstream enterprises and downstream retail enterprises have reached the highest profit level in a decade, and the total profits of miners and retailers have increased by US $7 billion year-on-year. Upstream: the profit margin increased by about 9-11 percentage points year-on-year, reaching the level of 201819; Midstream: the interest rate of cutting and polishing enterprises increased by 3-5 percentage points year-on-year; Downstream: small and large retailers increased by 2-4% and 6-8% respectively year-on-year.
Bain expects that due to strong demand in the peak holiday season in the first half of 2022, increased consumer confidence in major markets and limited supply of rough diamonds, the demand for diamond jewelry, finished diamonds and rough diamonds will continue to grow, and the market growth will still be higher than the pre epidemic level, and return to the historical growth rate from 2023 to 2024.
Risk warning: global epidemic control; Regulation of national policies; Industry regulatory risks; The downward pressure on the economy has increased.
