\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 172 Henan Huanghe Whirlwind Co.Ltd(600172) )
Core view
It is used to raise capital and increase the confidence of RMB 1-500 million people to raise capital and expand debt
The company issued a fixed increase plan, which is planned to be raised by Changsheng Holdings (actually controlled by Qiao Qiusheng, the actual controller of the company), with a fixed increase price of 7.14 yuan / share; Among them, the diamond cultivation industrialization project plans to invest 1.24 billion and raise 800 million; To supplement working capital and repay debts, it is proposed to invest 250 million and raise 250 million. The cultivation drilling project plans to invest 910 million for equipment purchase, with a construction period of 3 years and a production capacity of 586600 carats per year; After the completion of the project, it is estimated that the annual sales revenue will be 970 million, the total annual profit will be 280 million and the average annual net profit will be 240 million.
Qiao Qiusheng, the actual controller of the company, previously controlled a total of 20.36% of the voting rights of the company, which is at a low level. If it goes well, after this fixed increase, Qiao Qiusheng’s direct and indirect shareholding will be as high as 27.73% according to the upper limit.
Foster accelerated diamond production expansion + debt improvement + reduction of financial expenses, jointly promote the release of performance, and the performance is flexible
The company is one of the double leaders of China’s “cultivating diamond + industrial diamond” industry comparable to North Industries Group Red Arrow Co.Ltd(000519) (Central South diamond). It is one of the enterprises with the largest number of presses, the strongest technology and the most complete industrial chain in the industry. Benefiting from the high demand in the downstream, the company has greatly improved the production capacity of diamond cultivation through this fund-raising and expansion, so as to realize the substantial growth of the company’s operating revenue and net profit; At the same time, by replenishing working capital and repaying debts, effectively reduce the level of assets and liabilities and reduce financial risks; At the same time, reduce the scale of debt financing, and the financial expenses are expected to continue to decrease, significantly contributing to the improvement of profits.
Cultivating diamonds: the compound growth rate of China’s market will exceed 30% from 2020 to 2025; Press and process casting high threshold
From 2018 to 2020, the output of cultivated diamonds in the world will increase from 1.5 million carats to 7 million carats, cagr116%. It is predicted that the compound growth rate of the scale of cultivated diamonds in the world will be 17% from 2020 to 2025, and the scale of China’s cultivated diamond market will increase from 8.3 billion yuan to 29.5 billion yuan, with a compound growth rate of 29%; There are capacity constraints in the supply of press equipment in the diamond industry chain, high technical barriers in raw stone production and limited capacity expansion in the short term. It is expected to maintain a good competition pattern in the next 2-3 years.
Industrial diamond: an important source of profit. Increased demand for photovoltaic and silicon carbide + capacity squeeze promote profit
Industrial diamond has benefited from the growth of downstream demand such as diamond wire for photovoltaic and third-generation semiconductor silicon carbide; The demand for diamond cultivation is large, and the existing production capacity is more inclined to it. The product price of industrial diamond increases due to the extrusion of production capacity, and the profitability continues to improve. On April 6, 2022, the company raised the sales price of composite films.
The historical burden is gradually unloaded, the interest expense and impairment provision are expected to improve, and the performance is reversed and upward
Dragged down by the previous Mingjiang intelligent subsidiary, the company previously had heavy debt. In 2021, it is estimated that the interest expense of the company will be more than 300 million yuan, the asset impairment will be nearly 60 million yuan, and the non net profit will be deducted by 106 million yuan. If the interest expense and impairment provision are not considered, the actual pro forma net profit of the company will be nearly 500 million yuan. Through this fund-raising to supplement working capital and repay bank loans, the company’s interest expense is expected to decline year by year. With the large amount of cultivated diamonds and industrial diamonds, the performance flexibility is large.
Profit forecast and valuation
Regardless of the dilution of share capital and performance improvement brought by fixed growth, it is expected that the company’s net profit from 2021 to 2023 will be 0.4/51/770 million, with a growth rate of – / 1112% / 50%, PE 323 / 27 / 18 times, and maintain the buy rating.
Risk tip: the risk of changing the competition pattern and profitability of diamond cultivation
