\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 172 Henan Huanghe Whirlwind Co.Ltd(600172) )
Key investment points
One of the double leaders of "cultivating diamond + industrial diamond", benefiting from the high prosperity of the industry and the reversal of performance
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 rising prosperity of cultivated diamonds and industrial diamonds, the company has improved its profitability by increasing production expansion and changing its stock capacity from industrial diamonds to cultivated diamonds. Turning losses into profits in 2021, and the net profit attributable to the parent company is expected to be 41 million; Deduct 106 million yuan of non net profit.
Cultivating diamonds: from 2020 to 2025, the compound growth rate of China's market scale exceeded 30%; Press and process casting high threshold
As an emerging choice for diamond consumption, diamond cultivation has obvious advantages in quality, cost, environmental protection, science and technology, and has broad market prospects. From 2018 to 2020, the global output of cultivated diamonds increased from 1.5 million carats to 7 million carats, with a compound growth rate of 116%. According to the forecast data of Bain consulting, the scale of the global cultivated diamond market will increase from 16.7 billion yuan in 2020 to 36.8 billion yuan in 2025, with a compound growth rate of 17%; Benefiting from the expansion of China's diamond consumption market and the improvement of the penetration rate of cultivated diamonds, the scale of China's cultivated diamond market is expected to increase from 8.3 billion yuan to 29.5 billion yuan, with a compound growth rate of 29%; Considering the later establishment of brand effect and the improvement of consumer acceptance, it is expected that China's cultivated diamond market is expected to develop more than expected.
The cultivated diamond industry chain consists of press supply - cultivated diamond raw stone manufacturing - grinding processing - terminal retail. There are capacity constraints in the supply of press equipment (the capacity of heavy machinery enterprises that can produce key hinge beams is preferred), there are high technical barriers in the production process of cultivated diamond raw stone, and the capacity expansion is limited 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. The demand for photovoltaic and silicon carbide increases + capacity squeeze promotes the steady growth of profit. Industrial diamond benefits from the growth of downstream demand for diamond wires for photovoltaic and third-generation semiconductor silicon carbide; The market share of diamond products of the company is second only to North Industries Group Red Arrow Co.Ltd(000519) (Central South diamond) in the industry.
Industrial diamond production capacity is squeezed by cultivated diamonds, and the shortage of supply promotes the improvement of profitability: the demand for cultivated diamonds is large, and the existing production capacity is more inclined to it. The industrial diamond production capacity is squeezed, the product supply is in short supply, the price rises, and the profitability continues to improve.
Henan Huanghe Whirlwind Co.Ltd(600172) : the historical burden is gradually unloaded, the interest expense and impairment provision are expected to improve, the performance is reversed and upward, the historical loss is gradually improved, and the later profit is expected to accelerate the release: due to the drag of Mingjiang intelligent subsidiary and the impact of the epidemic in 2021, the company showed a large loss in 2020. The interest expenses of Q3 company in 2019, 2020 and 2021 are 310 million yuan, 319 million yuan and 248 million yuan respectively. 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. In the later stage, with the continuous settlement of the company's existing debts, the interest expense is expected to decrease year by year; The impairment risk of relevant assets of the company has been gradually improved; With the large-scale cultivation of diamonds and industrial diamonds, the performance is better.
Profit forecast and valuation
It is estimated that the net profit of the company from 2021 to 2023 will be 0.4/5.1/770 billion, with a growth rate of - / 1112% / 50% and PE of 323 / 27 / 18 times. The company has an advantage in the valuation of diamond cultivation. First coverage, buy rating.
Risk tips
Cultivating diamond competition pattern and the risk of changes in profitability, corporate debt problems and lower than expected asset impairment
