\u3000\u30 Zhongyan Technology Co.Ltd(003001) 79 Sf Diamond Co.Ltd(300179) )
Revenue / net profit attributable to parent company in 2021 + 30.90% / 22.23% year on year; 22q1 net profit attributable to parent company is expected to be + 59.27% - 85.82% year-on-year. In 2021, the annual revenue was 417 million yuan, a year-on-year increase of + 30.90%; The net profit attributable to the parent company was 92 million yuan, a year-on-year increase of + 22.23%. The business recovery was mainly due to the small base under the influence of the epidemic in 2020, the gradual recovery of the market prosperity of oil and gas exploitation products since 2020q4, the continuous increase in the number of active drilling platforms in North America, the growth of oil and gas exploitation composites, and the large volume of precision machining tool business. In addition, the downstream precision processing business is expected to achieve a rapid year-on-year growth of RMB 5.982 billion, mainly due to the rapid year-on-year growth of the parent company's net revenue of RMB 2.708 billion-2.72 billion in 2022.
The profitability is excellent, and the expense rate is generally stable during the period. In 2021, the gross profit margin / net profit margin was 52.89% / 22.08% respectively, with a year-on-year increase of + 4.10 / - 1.58 PCTs. The strong profitability was mainly due to the high technical barriers of products and the dominant position of the company in subdivided fields; The company's sales / management / Finance / R & D expense ratio was 7.88% / 15.14% / - 0.58% / 10.81% respectively, with a year-on-year increase of + 0.33 / + 3.52 / - 0.25 / + 0.18 PCT. Except for the increase of ITC lawyer service fee, the other expenses were basically stable.
The trend of oil-gas composite products is better, the growth of precision machining products is accelerated, and diamond has become a potential growth point. Taking the 1 + n industry (downstream industry) pattern as the strategic core, the company actively develops and distributes multiple application fields according to the downstream development trend. In the short term, focus on the "import substitution + key customer strategy" of oil and gas exploitation products, promote the "import substitution + alloy substitution" of precision machining in the medium term, and cultivate other diamond application markets in the long term. The company's current products are mainly divided into two categories: 1) resource exploitation / Engineering Construction: the revenue in 2021 is 235 million yuan, with a year-on-year change of + 20.79%. The main products are oil exploitation composite films, with the company's market share ranking first in China. International customers are mainly oil and gas exploitation service leaders such as Schlumberger and Baker Hughes; 2) Precision machining: in 2021, the revenue was 159 million yuan, with a year-on-year change of + 52.14%. The products include PCD blade, diamond tool, PCD micro drill bit, diamond saw blade, PCBN blade, CBN tool, drawing die blank, finished die, etc. among them, the diameter, particle size, brand and production scale of PCD blade have always led the Chinese market, and the product quality has reached the world advanced level. It is expected to maintain rapid growth in the future and become a new growth point of the company. In addition, the company established Tianxuan semiconductor company in October 2021 and reached cooperation with Zhengzhou University on the project of "Research on MPCVD synthetic diamond and its semiconductor devices", officially entering the field of MPCVD synthetic diamond. Diamond is widely used in the field of functional materials and consumer cultivation, and is expected to create a new growth point of the company.
Lower than expected risk prompt; The progress of diamond research and development is less than expected.
Investment suggestion: the company has accumulated in the superhard material industry for many years, takes the lead in the subdivided fields of oil and gas exploitation and other applications, gradually expands to the precision machining tool business, and further arranges the reserve CVD diamond business, with great growth potential. We expect the net profit attributable to the parent company from 2022 to 2024 to be RMB 145 / 198 / 255 million, corresponding to 35 / 26 / 20 times of PE value. For the first time, give a "buy" rating.
