Recently, we conducted on-the-spot research on the company and exchanged views on industry development and company business. Comment: The company's products are mainly made of diamond single crystal superhard materials, including superhard composite materials and products. The single crystal synthetic diamond entered a steady development period and the industry concentration increased. In 2009, China's synthetic diamond production reached 5.4 billion carats, and in 2011 it increased significantly to 11 billion carats. The average annual growth rate between 2009 and 2011 was 42.72%. With the gradual improvement of the comprehensive cost performance of synthetic diamonds, the downstream application of synthetic diamond tools has been extended, and the replacement of traditional cemented carbide tools has gradually accelerated. It is expected that the demand for synthetic diamonds in China will maintain a compound annual growth rate of more than 20% in the future. The company's super-hard materials performance benefited from industry demand and capacity improvement. The company's performance growth is mainly due to the continuous extension of the artificial diamond downstream application field, and the company's production capacity continues to grow. It is estimated that the company's total production capacity in 2012 will reach 2.4 billion carats, ranking second in the world, and its future production capacity will maintain a growth rate of 20%. The company's metal powder performance will benefit from the replacement of pre-alloyed powder and capacity release. In 2009, the market for pre-alloyed powders in superhard materials in developed countries accounted for about 60%, while the proportion of pre-alloyed powder in China was still low, about 20% in 2011. The company's metal powder planning total capacity is 12,000 tons, which was completely released in 2014. Since 2009, the gross profit margin of the company's metal powder sales has continued to increase, which was 44.94% in the first half of 2012. The increase in gross profit margin was mainly due to the gradual optimization of the preparation process, followed by the gradual optimization of the product structure, while the price of upstream metals declined. The company's super-hard composite material market expansion has steadily advanced. The company's PCD geochemical market has expanded smoothly. In the first half of 12 years, the sales volume was about 2 million pieces, and it has successfully entered high-quality customers such as China Shenhua. It is estimated that the sales volume in 2012 will reach 4 million pieces; the composite sheet for petroleum is superhard composite material. The company's revenue share is relatively low, the company is increasing its marketing efforts; the downstream market for tool composites will gradually extend from the stone and wood fields to the high value-added metal cutting field. It is predicted that the company's fully diluted earnings per share in 2012 and 2013 will be 0.34 yuan and 0.46 yuan respectively. According to the closing price of 8.11 yuan on September 18, the corresponding PE is 24.16 times and 17.74 times respectively. At present, the valuation is relatively reasonable relative to the industry, maintaining the company's “overweight†investment rating risk: the economic downturn is higher than expected; the industry's capacity expansion is too fast.
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Shangqiu Yusheng Tools co.,Ltd. , https://www.cnystools.com