\u3000\u30 Shenzhen Fountain Corporation(000005) 19 North Industries Group Red Arrow Co.Ltd(000519) )
Core view
The first quarter report of the company is expected to increase by 148% – 190%, which is a “good start” in the first quarter, and the performance exceeds the market expectation
The company released the performance forecast for the first quarter on April 1. In the first quarter of 2022, the net profit attributable to the parent company was 240280 million yuan, with a year-on-year increase of 148% – 190%, achieving a good start in the first quarter. The main reason for the performance growth is that the market demand of the company’s superhard material products (cultivated diamond + industrial diamond) has maintained a strong trend, and the sales price has increased significantly compared with the same period of last year. On the basis of ensuring the reasonable growth of quantity and the steady improvement of quality, the company has achieved better structure, better efficiency, higher quality and more sustainable development, and the overall operating efficiency has been continuously improved.
Zhongnan Diamond: the largest supplier of cultivated diamond + high-grade industrial diamond in the world
The official public of China ordnance industry group released the official account of “the manufacture of weapons, 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; The company’s industrial diamond has made a number of landmark progress and key technological breakthroughs. At present, the global industrial diamond market accounts for the first. In the future, with the large-scale demand of downstream high-end manufacturing + the rise in the price of industrial diamond, the company’s performance is expected to grow rapidly.
India’s imports of cultivated diamond blanks continued to rise, confirming the high prosperity of cultivated diamond industry
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.
Central South diamond invested 1.15 billion to expand production and cultivate diamonds. The company has increased production capacity, improved structure and improved trend
Zhongnan diamond shows in the implementation plan of “982” project in 2022 of Henan province that the company plans to invest 1.15 billion yuan to cultivate drilling and expand production, and the company 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 and the product structure of cultivated diamonds will continue to rise; As a listed company with the largest market value of the group, the company has a good long-term development trend, 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) is the global leader in cultivating diamond raw stone + industrial diamond, the leader in intelligent ammunition of Ordnance Group, and the two wheel drive of military products and civil products in the future. It is estimated that the net profit from 2021 to 2023 will be 470 / 10.4 / 1.36 billion, with a year-on-year increase of 72% / 121% / 30% and a compound growth rate of 70%. PE is 66 / 30 / 23 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.
