Core view
Tracking the rise and fall of the sector: this week, the Shanghai Composite Index rose 0.04%, the Shenzhen Component Index fell 0.86%, and the gem index fell 2.72%. A-share cultivation diamond sector fell 0.47%, and Chow Tai Fook, the target of Hong Kong stocks, rose 5.56%.
Industry data tracking:
Import and export data of cultivated diamonds in India: in December 2021, the import volume of cultivated diamond blanks in India was 132 million US dollars, with a year-on-year increase of + 104.70% and a month on month increase of + 54.63%; The export volume of cultivated diamond bare diamonds was 103 million US dollars, with a year-on-year increase of + 65.56% and a month on month increase of + 20.47%. In 2021, India imported 1.13 billion US dollars of cultivated diamond blanks, a year-on-year increase of + 145.83%; The export volume of cultivated diamond naked drilling was US $1.144 billion, a year-on-year increase of + 116.29%.
Penetration rate of cultivated diamonds: in December 2021, the penetration rate of imported cultivated diamonds in India was 5.92%, with a year-on-year increase of + 2.36 PCT and a month on month increase of -1.67 PCT; The permeability at the outlet end was 5.51%, with a year-on-year increase of + 2.04pct and a month on month increase of -0.66pct. In 2021, the penetration rate of India's cultivated diamond import side was 5.99%, with a year-on-year increase of + 1.44pct; The permeability at the outlet end was 4.58%, with a year-on-year increase of + 1.10pct.
Industry news:
North Industries Group Red Arrow Co.Ltd(000519) Zhongnan diamond, a wholly-owned subsidiary, has completed the construction of the "construction project of gem grade diamond production line with an annual output of 120000 carats by high temperature and high pressure method", with an actual investment of 179 million yuan, which has realized the transformation and application of advanced technological achievements of gem grade diamond cultivation of more than 3 carats to mass production.
Lightmark (little white light) Chengdu store is about to open. According to its official website data, lightmark currently determines a total of 8 offline stores, which are located in Shanghai, Nanjing, Shenzhen, Wenzhou, Suzhou, Hangzhou and Chengdu.
Investment suggestion: the penetration rate of cultivated diamonds in the overall consumption of diamonds is only 6%. With the advantages of cost performance and the vigorous publicity of leading jewelers, the recognition of consumers is increasing, and the downstream demand is growing rapidly. China's diamond production is mainly cultivated by high-temperature and high-pressure method. Due to the capacity constraints of upstream equipment manufacturers, the expansion of the industry is limited. It is suggested to pay attention to Henan Liliang Diamond Co.Ltd(301071) , North Industries Group Red Arrow Co.Ltd(000519) , Henan Huanghe Whirlwind Co.Ltd(600172) and Sinomach Precision Industry Co.Ltd(002046) with high market share and good cooperation with upstream equipment manufacturers.
Risk tip: the downstream demand is less than expected, the production capacity is less than expected, and the industry competition is intensified
