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Yu Diamond: New project ensures growth in the next three years
This week, the market was in a situation of increased panic and hit a new low. From the dynamic P/E ratio, the overall valuation of the market is close to the historical low. From the perspective of valuation, market risk has been fully released, but under the panic, the possibility of market oversold still exists, and under the sluggish volume, the rebound after the market has stopped falling is still in doubt. In the stock picking strategy, we are not giving up the requirements for “growth†and “valuation†because of the market downturn. We still choose the stocks with potential growth potential from the fundamentals and the current valuation is basically reasonable. Market fluctuation risk. This morning, Guosen Securities recommended Yu Diamond (300064, shares it), the company recently disclosed the proposed high-end diamond production line to enhance competitiveness, Guosen Securities analysis, the high-end diamond production line project can ensure the company's performance growth in the next three years. Yu Diamond recently announced that it plans to invest in an annual output of 1.02 billion carats of high-grade diamond projects. The project is expected to have a total investment of 637 million yuan (including construction investment of 492 million yuan, construction period interest of 24.04 million yuan, and working capital of 121 million yuan). The required funds will be solved by Yu Diamond in the form of its own funds and through debt funds. There are funds of 191 million yuan and debt funds of 446 million yuan. The construction period of the project is 2 years, trial production started in March 2013, and production was completed in 2014. The project of Yu Diamond Development has a realistic industry market background: At present, most of China's synthetic diamond production is medium and low grade products, the profit level is low and it can not meet the needs of downstream technological progress, and high-grade products still need a large amount of imports. In order to realize the transformation of the development strategy from “production to large countriesâ€, improving the yield and grade of synthetic diamonds has become a top priority. From the technical level, Yu Diamond has more than ten years of production experience in the field of synthetic diamonds, and has industry leading advantages in the preparation of raw and auxiliary materials, research and development of special synthetic equipment and control of synthetic processes. Guosen Securities also learned that the project uses the company's newly developed HJ-6 synthetic diamond synthetic press, advanced production technology and new raw and auxiliary materials technology with patented technology to build a synthetic diamond production line. The comprehensive technology is leading domestically and internationally. The high-grade output rate has been raised from the industry's advanced level (30%) to the international advanced level (more than 50%), and the cost is about 20% lower than the domestic traditional process. In the market, after the project is completed and put into production, it will be beneficial to the adjustment of China's diamond product structure, improve the high-grade diamond ratio, and use the export to break the current high-grade synthetic diamonds on the international market by the US DI Company (200 million carats/year) and the United Kingdom. EIEMENT.SIX (200 million carats / year) and other companies monopolize the situation, while partially replacing imported products in the domestic market. The profit forecast of the project is worthy of investors' attention: Guoxin Securities calculates that if the project is completed as planned, according to the share capital of 304 million, in 2014, it will contribute 495 million yuan of operating income to the company, and net profit after tax will be 144 million yuan. EPS is thicker by 0.48 yuan. According to the preliminary investigation and analysis of Guoxin Securities, the company will achieve EPS of 0.56 yuan and 0.81 yuan in 2011 and 2012, an increase of 120% and 40% year-on-year. After the project is successfully completed as planned, the company's synthetic diamond production will increase to about 2.5 billion carats in 2014, contributing EPS of 1.17 yuan. At the same time, the company's diamond wire project is expected to reach full production in 2014 and will be widely used in the photovoltaic field. Promote the use, the project can increase the company's EPS in 2014 is about 0.17 yuan, when the cumulative EPS is 1.34 yuan.