Concept Tracking | Many synthetic diamond companies have posted eye-catching "transcripts", new and old companies are scrambling to expand production, and leading manufacturers are expected to fully benefit (with concept stocks)

Zhitong Finance APP has learned that recently, a number of A-share synthetic diamond listed companies have released the "transcripts" for the first half of 2022, including Power Diamond (301071.SZ), Zhongbing Hongjian (000519) (000519.SZ) Net profit growth is expected to double, and Sifangda (300179) (300179.SZ) hit a record high in the first half of the year. Since 2021, the downstream demand for cultivated diamonds and industrial diamonds has been hot, product prices have risen, and companies have started a wave of investment and expansion. The upstream production side is in short supply, and leading manufacturers are expected to continue to benefit from industry growth dividends.

On July 4, Power Diamond announced that it is expected to achieve a net profit of 226 million yuan to 237 million yuan in the first half of the year, a year-on-year increase of 108.80% to 118.98%. The company said that during the reporting period, the company's high-margin product cultivated diamond business accounted for a significant increase in sales, the market demand for diamond single crystal and cultivated diamond products was strong, and the industry boom continued to be high. The company's previous fundraising projects have basically reached production, and the output has grown rapidly.

The global cultivated rough diamond + industrial diamond double leader Zhongbing Hongjian also reported good results. The company's semi-annual performance forecast disclosed on July 1 showed that the net profit in the first half of the year was expected to be 665 million yuan -7.15 million yuan. 100 million yuan, a year-on-year increase of 103.41%-118.71%. During the reporting period, the prosperity of the superhard material industry continued to be high, and industrial diamonds and cultivated diamonds were still in a booming stage of production and sales.

In addition, Sifangda recently announced the semi-annual performance forecast that it is expected to achieve a net profit of 86 million to 94 million yuan attributable to the parent in the first half of the year, a year-on-year increase of 76.15% to 92.54%. The company said that in the first half of the year, downstream demand for oil and gas exploration products continued to recover, while the company's precision machining business maintained a steady growth trend, resulting in a rapid increase in the company's operating income.

Zhongbing Hongjian said in a recent survey that industrial diamond is a product that has developed for many years and has very full market competition. The price of the product is determined by the market, and it is highly sensitive to market influence. With the continuous advancement of technology and the continuous expansion of emerging photovoltaic applications, the future market prospect of the product itself is still relatively good.

It is worth noting that under the high industry boom, synthetic diamond companies have started a wave of investment and expansion. In January of this year, Zhongbing Hongjian completed all the approved construction contents of the “Project for the Construction of Gem-Grade Cultivated Diamond Production Line with an Annual Output of 120,000 Carats under High Temperature and High Pressure”, realizing the stable production of cultivated diamonds above 3 carats in batches. At the same time, the subsidiary Zhongnan Diamond is in the process of constructing the second phase of the gem-grade cultivated diamond production line construction project.

Dyler also announced in mid-April that it plans to expand its production capacity, that is, to increase the production capacity of diamond wire by 24 million kilometers per year. After this expansion, the company's total production capacity will reach 36 million kilometers. /year. The estimated investment amount is about 150 million yuan.

On June 30, Power Diamonds released a fixed increase plan, which plans to raise 4 billion yuan for production expansion, and plans to purchase about 1,800 presses, of which 1,500 are used for cultivating diamonds. The company said that after the investment project reached production, the production capacity of cultivated diamonds will increase by 2.772 million carats per year, which will reach 3.4132 million carats per year, which is 5.32 times the existing production capacity; the production capacity of diamond single crystal will increase by 1,506.6 million carats per year. It will reach 2,493,451,200 carats per year, which is 2.53 times the existing production capacity.

In addition to the active expansion of production by leading companies in the industry, traditional jewelry brands such as Mancalon and Swarovski have also accelerated their entry into the cultivated diamond market. According to industry statistics, there have been 2,000 new turbochargers in the industry since last year, corresponding to an additional capacity of about 1.5 million carats per year. According to Bain & Company's forecast data, the global market for cultivated diamonds will increase from 16.7 billion yuan in 2020 to 36.8 billion yuan in 2025. Among them, the size of my country's cultivated diamond market will increase from 8.3 billion yuan to 29.5 billion yuan.

Market participants said that benefiting from the high growth of photovoltaic, semiconductor and other industries, diamond micropowder is expected to maintain a rapid growth rate. In addition, polycrystalline diamond processing in semiconductor precision processing is still mainly imported, and there is still a large room for development in the field of industrial diamond. In the field of lab-grown diamonds, as consumers continue to increase their awareness and acceptance, lab-grown diamonds will drive the growth of the global overall loose diamond scale.

Zheshang Securities pointed out that as an industrial product with consumption attributes, the price of cultivated rough diamonds will ultimately be determined by the pattern of supply and demand. 49%. It is estimated that by 2025, the global demand for rough diamonds will increase from 14.3 billion to 31.3 billion, with a compound growth rate of 35%. Among them, the proportion of demand for rough cultivated diamonds produced in China in 2022-2025 will increase from 68% to 85%. Low prices, real diamonds, environmental protection, and new consumption will promote the rise of the demand for cultivated diamonds, and the industry will generally be in short supply.

Guotai Junan believes that the outbreak of the cultivated diamond industry in this round is significantly different from the previous one, mainly due to the demand-side outbreak brought about by the significant decrease in the channel markup rate in order to increase the penetration rate of foreign consumer terminals, and the demand for exchange of price for quantity After deterministic verification, the rapid development of the industry has the characteristics of strong sustainability.

Soochow Securities believes that the penetration rate of cultivated diamonds is still in the stage of rapid increase. The import and export data of India from January to May 2022 shows that the export of cultivated diamonds has a year-on-year growth rate of more than 75%. The penetration rate has exceeded 7% and is still increasing rapidly. The upstream production side is in short supply, and leading manufacturers are expected to continue to benefit from the industry growth dividend. It is expected that other high-temperature and high-pressure leading manufacturers may also perform well in Q2.