enlightenment
Industrial chain: cultivated diamonds are similar to natural diamonds. The upstream and midstream are cyclical and the downstream are consumer.
Natural diamond: downstream retail is related to consumer education and terminal retail prosperity; The prosperity of the upper and middle reaches is determined by supply and demand. When supply is greater than demand and inventory is high, the industry boom goes down. When demand is greater than supply and inventory is low, the industry boom goes up.
Cultivating diamonds: we believe that the upstream and downstream properties of cultivated diamonds are similar to those of natural diamonds. At present, the downstream consumption of cultivated diamonds continues to release and is in the early stage of rapid growth; The upper and middle reaches benefit from the release of downstream demand, supply exceeds demand, and are in the upward stage of prosperity; In the future, with the increase of production capacity and oversupply, the upstream and midstream enterprises will experience a round of adjustment.
Long term: the mature development of natural diamond industry provides an opportunity for diamond cultivation.
Natural diamonds: in recent years, the terminal demand has increased by low single digits, the upstream inventory is high, and the manufacturers are facing the pressure of price decline in expanding production. In the long term (according to calculation), there is excess supply and the boom is down.
To this end, natural diamond traders and producers have successively transformed and cultivated diamonds: 1) there are more than 5000 natural diamond traders and processors, with low bargaining power, cash purchase from upstream manufacturers and credit sales from downstream retailers, which has the greatest pressure on survival in the downturn of natural diamond boom. Since 18 years, cultivated diamonds have broken through the bottleneck of mass production technology, and their cost-effective advantages over natural diamonds are prominent After the downstream demand is opened, the profit margin left to traders is more abundant (the retail price of 20q4 cultivated diamond naked diamond is 35% of natural diamond and the wholesale price is 20%), while the price of cultivated diamond is cheaper and the capital week is faster. 2) Delbis, a leader in natural diamond production, invested in the cultivation of diamond manufacturer elementsix and launched the cultivation of diamond brand Lightbox in 18 years.
Short term: cultivate diamonds to benefit from the short-term upward market of natural diamond demand.
Natural diamonds: 21 years have entered a new round of growth cycle, which is mainly reflected in: 1) the import volume of natural diamonds from the United States and China, the two major global markets of natural diamonds, has warmed up. Among them, 21q1 / Q2 in the United States is mainly repaired after the epidemic, with an increase of 19% / 291% respectively. 21q3 has recovered to the pre epidemic level, with an increase of 65% at the same time. It is expected that 22h1 will continue to be repaired; China resumed positive growth in 20q4 and accelerated its recovery in 21 years. 21q1 ~ 3 increased by 147% / 197% / 55% respectively, which is still growing and in strong demand compared with that before the epidemic. 2) The import and export data of India, the global processing base of natural diamonds, recovered, and the import and export volume increased by 98% / 71% respectively from January to November of 21.
Cultivating diamonds: terminal retail benefits from the penetration of natural diamonds and the short-term boom of diamond jewelry demand.
Tracking: the data tracking of midstream processing cycle is of reference significance to upstream enterprises.
Natural diamonds: there is an obvious cycle attribute in the middle reaches of processing, usually 3-4 years, of which the upward cycle is 2-3 years and the downward cycle is 1 year (regardless of the special situation of 20 years): 1) upward cycle: the import growth rate is 2-3 months higher than the export growth rate, mainly because the inventory at the end of the previous cycle digests to a low level, and there is a demand for replenishing inventory when the new cycle warms up, It has experienced an upward growth period (import growth rate is higher than export) and a mature period (import growth rate is lower than export). 2) Downward cycle: export leads for 1 ~ 2 quarters, successively experiencing the initial stage (export takes the lead in the decline of import) and the final stage (both export and import decline).
Cultivating diamonds: the processing import and export data of midstream India have been disclosed since 17 years. Until 19 years, the demand for benefits was released and the import and export showed positive growth. So far, it has not experienced a complete short cycle. At present, both imports and exports are growing, still in the upward cycle, and the growth rate of imports is higher than that of exports. We believe that they are still in the growth period of the upward cycle, have not yet entered the mature period, or even the downward cycle.
Risk statement
Disorderly competition among upstream drilling manufacturers; The import and export data of Indian drilling processing fluctuated; Consumer education was less than expected.
