\u3000\u30 Shenzhen Fountain Corporation(000005) 19 North Industries Group Red Arrow Co.Ltd(000519) )
Core view
According to the official report of the arms industry group, North Industries Group Red Arrow Co.Ltd(000519) Zhongnan diamond is the largest supplier of diamonds worldwide, and the official account of the China weapons industry group released the “armament manufacturing industry, the largest supplier of diamonds in the global jewelry industry” in the evening of March 29th. It is pointed out that Zhongnan diamond ( North Industries Group Red Arrow Co.Ltd(000519) subsidiary) is the world’s largest research and production enterprise of superhard materials. With the rise of global cultivated diamonds, Zhongnan diamond has rapidly developed into a top supplier of cultivated diamonds with the highest grade, the largest particle size and controllable color in the international jewelry field. Zhongnan Diamond: the world’s largest supplier of high-grade industrial diamond and the improvement of the profitability of industrial diamond. The predecessor of Zhongnan diamond was founded in 1979. After hard work, the company has become the world’s largest supplier of high-grade diamond. Miraculously, it has achieved “later ranking and perfect surpassing”, left behind its competitors at home and abroad, and made its products “cost-effective” with unparalleled products, Force all international giants to withdraw from the market. Through the breakthrough of the key core technology of powder catalyst in 2001, the listing transformation in 2013 and the successful development of colorless cultivation drill in 2016, the trial production of CVD large single crystal by vapor deposition was successful in 2018.
India continues to cultivate high diamond import volume
According to the data of GJEPC (Indian crystal and Jewelry Import and export Research Association), India’s imports of cultivated diamond raw stones increased by 84% year-on-year in February 2022, and cagr107% in 20192021. The high growth of “diamond processing Empire” confirms the high demand of the industry; In order to cultivate an important supply source of diamond raw stones in China, the orders and performance of relevant enterprises will be large.
Henan Liliang Diamond Co.Ltd(301071) 4 billion production expansion, reflecting the strong demand for downstream diamond cultivation and the high prospect of the industry
Henan Liliang Diamond Co.Ltd(301071) issued a fund-raising report on March 25. It is proposed to raise 4 billion yuan for the construction of diamond cultivation and industrial diamond production capacity, of which the total equipment purchase cost is 3.011 billion yuan for the purchase of press equipment; The company’s first quarterly forecast shows that the net profit attributable to the parent company increased by 128% – 152% year-on-year, reflecting the strong downstream demand and the high outlook of the industry.
Central South diamond invested 1.15 billion to expand production and cultivate diamonds. Central enterprises made a good start in the first quarter, and the company’s trend is expected to be better
Zhongnan diamond shows in the implementation plan for the “982” project to make up for deficiencies in 2022 that the company plans to invest 1.15 billion yuan to cultivate drilling and expand production, and Zhongnan diamond plans to complete an investment of 500 million yuan in 2022; It is expected that the production capacity of North Industries Group Red Arrow Co.Ltd(000519) cultivated diamonds will be further improved; Central enterprises strive to make a good start in the first quarter. As a listed company with the largest market value of the group, the company is expected to have a good performance trend in the first quarter of 2022, and the annual net profit is expected to more than double.
Investment suggestion: cultivate diamond + industrial diamond leader, intelligent ammunition leader of Ordnance Group, dual drive of military and civil products North Industries Group Red Arrow Co.Ltd(000519) for global cultivation of diamond raw stone + industrial diamond leader, intelligent ammunition leader of Ordnance Group and dual drive of military and civil products in the future. It is estimated that the net profit from 2021 to 2023 will be RMB 480 / 10.4 / 1.36 billion, with a year-on-year increase of 76% / 115% / 30%, a compound growth rate of 70%, and the PE will be 57 / 27 / 20 times, maintaining the “buy” rating.
Risk tip: the competition pattern and profit changes of diamond cultivation, new technology iteration, and military products are not as expected.
