\u3000\u3 Jointo Energy Investment Co.Ltd.Hebei(000600) 172 Henan Huanghe Whirlwind Co.Ltd(600172) )
Event: the company released its 2021 annual report. In 21 years, the company achieved revenue of 2.652 billion yuan, an increase of 8.24% year-on-year; The net profit attributable to the parent company was 43.02 million yuan, a year-on-year increase of 104.39%; The net profit attributable to the parent company after deduction was 115 million yuan, a year-on-year increase of 118.29%; The net profit attributable to the parent company and non deduction were slightly higher than the previous performance forecast.
There are broad prospects for cultivating diamonds, and the company actively expands its production. After the epidemic, the supply of natural diamonds was significantly affected, especially in some small mines. According to Bain data, the output of natural diamond rough in 21 years was 116 million carats, an increase of only 5%, 16.5% lower than 139 million carats in 19 years before the epidemic. However, the global sales of rough diamonds have reached 137 million carats in 21 years, more than 135 million carats in 19 years. This shortage of demand in the diamond industry as a whole has also accelerated the development of the diamond industry. According to the data of India’s import and export website, from January to march of 22 years, India imported 511 million US dollars of cultivated diamond, with a year-on-year increase of 105%. We expect the cultivated diamond industry to continue to grow at a high speed under the resonance of various factors. The company can stably produce high-color and high-purity cultivated diamond blanks, and its products have reached the global leading level. It is actively expanding its production; According to the annual report, the company’s fixed assets were 5.22 billion yuan at the end of 21 years (4.214 billion yuan at the end of the third quarter), and the company’s “cash paid for the purchase of fixed assets, intangible assets and other long-term assets” was 617 million yuan in 21 years.
The operation quality is good, and the financial side is expected to be optimized. In Q4, the company’s gross profit margin was 30.34% in a single quarter, up + 0.94pct from the previous quarter. We expect that with the improvement of capacity utilization of subsequent companies, the gross profit margin still has room for optimization. The most important expense in the period is still the financial expense. The financial rate of the company in Q4 is 11.27%. In 21 years, the company generated a net cash flow of 979 million yuan from operating activities, a year-on-year increase of + 128%. With the improvement of the company’s operation and the fixed increase of supplementary funds, the financial expense will decrease.
Major shareholders intend to subscribe for the fixed increase in full to demonstrate their confidence. In April this year, the company released the non-public offering plan for 2022, and “Huanghe Changsheng holding” will subscribe for all, with a total raised capital of no less than 800 million yuan and no more than 1.05 billion yuan, and an issue price of 7.14 yuan / share. Changsheng holdings is a wholly-owned subsidiary of Huanghe industry, the controlling shareholder of the listed company. Before the fixed increase, Mr. Qiao Qiusheng, the actual controller of the company, held 20.36% of the equity of the listed company in total; According to the ceiling of this fixed increase, Mr. Qiao Qiusheng’s shareholding ratio will rise to 27.73%, showing the actual controller’s confidence in future development.
Profit forecast and investment suggestions: it is estimated that the operating revenue of the company from 2022 to 2024 will be 3.303 billion yuan, 4.045 billion yuan and 5.166 billion yuan respectively, the net profit attributable to the parent company will be 405 million yuan, 611 million yuan and 943 million yuan respectively, and the corresponding EPS will be 28 yuan, 42 yuan and 65 yuan respectively. Maintain the “buy” rating, and the six-month target price is 12.60 yuan, which is equivalent to 30 times the dynamic P / E ratio in 23 years.
Risk tip: the development of diamond cultivation industry is less than expected, and the industry competition intensifies.
