Yellow River whirlwind net profit increased by 141%. Superhard materials is the source of performance. Huanghe Cyclone released its interim results on the evening of July 26. During the reporting period, the company achieved a total operating income of 494 million yuan, an increase of 35.10% over the same period of last year; net profit of 62.968 million Yuan, an increase of 141.37% over last year. The company mainly produces synthetic diamond and diamond products. The leading products include UDS series diamond presses, synthetic diamonds, cubic boron nitride, diamond thick films, diamond micro-powders, diamond products, construction machinery and automatic control devices. The company is the largest diamond production base in China, and its output ranks first in the country and in the forefront of the world. Performance Benefits Super-hard materials prices During the reporting period, the main business income increased by 34.4% year-on-year, mainly due to the expansion of the market and the increase in the prices of super-hard materials in the first half of the year. Operating costs increased by 46.5% year-on-year, and operating profit margin decreased by 5.93% year-on-year to 28.3% in the reporting period. The main reason is the increase in depreciation of the company's environmental protection and energy-saving investment assets, the increase in labor costs and the increase in other expenses. The increase in corporate profits was mainly due to the increase in sales of super-hard materials, super-hard composite materials and metal powders. The reporter connected the staff of the Yellow River Cyclone Securities Department to further understand the operation status of the report period. The staff indicated that the growth of the current performance was mainly due to the increase in sales volume. The company's business was an emerging industry, which started late and the demand is growing. In the first half of the year, in addition to the price increase of super-hard materials, the prices of other products remained stable, and the price increase of products had little effect on profits. In addition, the increase in operating costs is mainly due to the increase in labor costs. Although the company is not a labor-intensive industry, the wage base in Henan Province is relatively low, and the implementation of the minimum wage standard has a greater impact on costs. Superhard materials are still emerging industries in China, and the company's sales growth benefits from the development of downstream industries and the upgrading of equipment. The downstream industry of the Yellow River Cyclone is a diamond tool manufacturing enterprise that provides diamond fittings for the production of diamond tools, power tools, alloy tools, etc. The above tools are mainly used in a wide range of fields such as mineral development, oil drilling, machinery manufacturing, and building materials. According to the statistics of the Superhard Materials Industry Association, the annual compound growth rate of China's synthetic diamond production will exceed 15% in the next three years. At present, China has entered the ranks of world powers in terms of super-hard materials. China's super-hard materials and products industry will take the lead in becoming one of the industrial industries with international voice. The annual income of the fundraising project can reach nearly 1.2 billion. The company's previously approved fundraising projects are under construction. They are an annual production capacity of 12,000 tons of alloy powder production line project and an annual output of 12 million geological mineral drilling grade superhard composite material production line projects. The company's securities department staff said that the two projects are expected to be completed in the fourth quarter of this year, which will have an impact on the 2012 results. The main product of the 12,000 ton alloy powder production line project is pre-alloyed powder for super-hard materials. The company has been committed to the development of super-hard materials in recent years. The project is put into production to meet the company's own production needs, and at the same time it is beneficial. The company opened up the pre-alloy powder market and seized the opportunity. After the project is completed and put into production, the company predicts that the normal annual sales income will be 600 million yuan and the total profit will be 159 million yuan. The annual production of 12 million geological mineral drilling grade super-hard composite material production line project is a key step for the company to extend to the downstream of the industrial chain while insisting on synthetic diamond-based industry. The main products of the project are composite products for mining and petroleum. Through the construction of the project, the company will expand the market for intermediate products such as polycrystalline superhard composites. After the project is completed and put into production, the company predicts that the normal annual sales income will be 576 million yuan and the total profit will be 146 million yuan. The Yellow River Cyclone's net profit for 2010 was 63 million, and the net profit for the 2011 interim report was 62.96 million. It is believed that the commissioning of fundraising projects will have a greater impact on the company's future earnings. (Yang Jiaxuan Investment Express) Ping An Securities: Opportunities for the whole industry chain of super-hard materials The ultra-hard new material industry chain fosters investment opportunities. The NdFeB industrial chain is a successful investment case from 2009 to 2010. The upstream price hike, the global production capacity of the midstream to China, and the explosive growth of downstream demand, have led to investment opportunities in the entire industry chain. We believe that the development of different new materials sub-sectors has common characteristics. At present, the development of the super-hard material industry chain has approached the state before the outbreak of NdFeB, which gave birth to investment opportunities. Go upstream to the oligopoly and look at "price increases." The upstream of the superhard material is diamond; the upstream of the neodymium iron boron is rare earth. Both of them are gradually moving towards oligopoly in supply, and there is steady high growth in demand. Although diamond prices will not show a sharp increase similar to rare earths, the future trend will continue to be “bullishâ€, which is good for companies with diamond business. The midstream has made China's quality and sees “overseas market expansionâ€. The midstream of superhard materials is a composite sheet, which we believe is similar in development to NdFeB around 2003. At that time, the performance of domestic products broke through 360kJ/m3, which broke into the international mainstream market and prompted the global production capacity to gradually shift to China. At present, China's leading super-hard materials companies are striving to enter the international mainstream market on blades and oil tablets. If successful, it will also promote the transfer of composite production to China. The downstream demand is growing, look at "high-end product development." The rise of NdFeB is closely related to the development of new energy vehicles, wind power equipment and energy-saving motors in the past two years. The downstream of superhard materials is also growing rapidly. In terms of the amount of demand, the replacement of traditional abrasives and tools such as cutters, drill bits and saw blades is the main factor, and the compound growth rate is expected to be 25%. In terms of economic benefits, China's diamond wire saws, high-precision high-speed grinding wheels, high-end professional saw blades, single-crystal wire drawing dies, single-crystal turning tools and other new super-hard tools are far from the development level of foreign countries, and investment opportunities are more obvious. . Related companies face rapid growth opportunities and have investment value. At present, the entire super-hard material industry chain faces opportunities for rapid growth. Listed companies such as Sifangda, Yu Diamond, Huanghe Cyclone, and Boshen Tools have financing advantages compared with competitors, which can achieve faster development and have investment value. (Ping An Securities Research Institute) CIC Securities: Focus on the localization opportunities of new materials in the new energy industry Photovoltaic: Short-term gloom does not cover the long-term splendid, concerned about the localization opportunities of photovoltaic accessories. The photovoltaic industry is experiencing oversupply caused by the growth rate of capacity expansion far exceeding the growth rate of demand. The whole industry chain is under pressure from falling prices and falling profit levels. We believe that in the short term, components, battery chips, silicon wafers and polysilicon are all facing pressure to reduce profits; but the long-term decline in terminal prices is conducive to achieving PV parity online earlier, and the PV industry space is still far from being released. We maintain the industry. The judgment of long-term high prosperity. In the short term, under the pressure of cost, the localization of the PV industry chain brings opportunities to the suppliers. We are optimistic about the localization of the backsheet materials for PV modules, and strongly recommend the East Materials Technology for the use of polyester materials for photovoltaic backsheets. Pay attention to the development of the fluorine film of Foshan Plastic Technology's photovoltaic backsheet. Wind power: Industry consolidation is intensifying, and the industry's leading advantages will become more prominent, focusing on the blue ocean market where wind turbine materials are localized. Downside pressures on industry prices caused by short-term oversupply will continue. The policy aspect of the rise of the threshold of wind power manufacturing and the emphasis on industry standardization will help the wind power industry to go out of disorderly competition and increase the concentration of the industry. In the future, the industry will show a strong and strong trend. The localization of wind turbine blade raw materials, which accounts for 25% of the cost of wind turbines, is low, and it is strongly recommended that the only new material in the country that produces wind turbine blade core materials. Nuclear power: Nuclear energy safety risks are huge, waiting for the policy to be clear. Due to the far-reaching impact of Japan's nuclear power accidents, countries have successively issued policy plans to gradually decommission nuclear power plants; domestic policies have not changed the current nuclear power construction plan, but construction progress may slow down, and future approval standards will become more stringent. In the short term, we recommend waiting for the policy to be further clarified. It is still recommended to pay attention to Dongfang Electric, which has a lower valuation. Lithium battery: The mass production of new energy vehicles and energy storage market is expected to start, paying attention to the release of battery material business. The policy is currently based on demonstration operations. We believe that the support of local governments has provided a good policy environment for the operation of new energy vehicles; the charging/replacement mode has provided the necessary hardware facilities for the operation of new energy vehicles. Orders from automakers are gradually increasing, and it is recommended to track battery manufacturers with greater flexibility or to benefit from explosive growth in performance due to large orders. Secondly, attention is paid to the huge demand for lithium batteries in the energy storage market due to the access of renewable energy to the power grid. From the perspective of industrial chain layout, before the completion of the industrialization of the whole vehicle, we are optimistic about the segmentation of battery materials, especially the opportunity to localize key materials such as diaphragms, recommend battery manufacturer Nandu Power, battery related materials Plastic Technology, Xinzhoubang, Jiangsu Guotai, Shenzhen Huicheng. (China Investment Securities Research Institute) Century Securities: "Nuggets" high-performance fiber - chemical new materials research series China's demand for high-performance fiber composite materials will become increasingly strong, especially in the aerospace, automotive, wind power and other fields. According to the JEC Group's research report, in the past few years, half of the global demand for composite materials has increased in Asia. Asia, especially China, has seen rapid growth. It is expected that China will account for 43% of the global composites market growth by 2013; The proportion of transportation is relatively small, accounting for only 5%, which is lower than the global average of 24%; the proportion in the industrial equipment sector is 10%, which is also lower than the global average of 26%. At present, the proportion of high-performance fiber on the aircraft is 50%-80%. Boeing expects that the number of Chinese transport aircraft will be three times that of the original in 2025; domestic wind power and automotive fields are in high demand, and high-performance fiber composite materials as a kind The advanced lightweight and high-strength materials meet the trend of large-capacity development of wind turbines, and cater to the development direction of automobile safety and light weight. The world's three high-performance fibers: 1) Carbon fiber: At present, global carbon fiber production capacity has been oversupplied. Although domestic carbon fiber import dependence rate is as high as 83.9% and import substitution space is large, domestic carbon fiber technology still needs to be broken. Currently, the price of imported carbon fiber products is approaching domestic production. cost. We believe that if carbon fiber prices remain low, it will promote the popularization of carbon fiber in high-end industries and industries. As the deep processing of each stage of carbon fiber has a high value-added, carbon fiber downstream composite materials companies will directly benefit. 2) Aramid fiber: At present, the global aramid fiber has been oversupply, but the supply and demand situation of Aramid 1414 is still tight. Domestic aramid fiber consumption is strong, with a compound annual growth rate of about 30%. We believe that with the increase in supply, domestic high-temperature filter materials with aramid 1313 or overcapacity, aramid 1313 in the need for a certain technical content of the protection field, aramid paper high-end products application market potential; domestic aramid 1414 Mainly relying on imports, supply is the key. 3) Ultra-high molecular polyethylene fiber: At present, the global ultra-high molecular polyethylene fiber is in short supply, the supply gap is more than 90,000 tons; the domestic supply gap is about 8,000 tons, and some domestic enterprises have reached the world advanced level, and supply is the key. Investment strategy and key companies. Due to the high performance requirements of high-performance fibers and composite materials, complex production processes and high technical barriers, it is a key factor for future industrial upgrading. It is recommended that investors pay attention to companies with technological and scale advantages, such as aerospace composite materials, technology monopoly. The company with obvious advantages: Boyun New Materials; the supplier with the technical advantages of producing aramid fiber intermediates: Zhejiang Longsheng; the leading enterprise with high-end aramid fiber product production technology and scale leading advantage: Yantai Spandex; Ultra-high molecular polyethylene fiber technology and the strength of the listed company: S Yihua. Risk warning: Downstream demand is lower than expected; company performance is affected by fluctuations in raw material and product prices. Yu Diamond: Performance is in line with expectations, expecting new business categories: Company research institute: Galaxy Securities Researcher: Qiu Shiliang, Yan Houlin Date: 2011-07-15 1. Event company released performance pre-announcement, profit for the first half of this year: 65 million yuan-7000 Ten thousand yuan, a year-on-year increase of 78%-92%, in line with our previous expectations. 2. Our analysis and judgment (I), the performance growth was due to the expansion of production capacity and sales in the first half of the year. The pre-increase was in line with our expectation, mainly due to the company's investment in super-raised funds to expand production capacity and technological transformation last year. effectiveness. (II) Integrated industrial chain and technological advantages constitute the core competitiveness The company's sales gross margin in 2010 was 45.73%, up 0.51% from the same period of last year, slightly up 0.10% from the mid-2010 period. The profitability was strong and stable, and the gross profit margin was much higher. For competitors. We believe that the company's integrated industrial chain and technological advantages will constitute the company's long-term core competitiveness, and the company's product gross margin can continue to maintain high levels. (III) The future of the micro-cutting line project for the photovoltaic industry is far-reaching. At present, governments of all countries are actively developing clean energy. With the decline of technology upgrade costs and the launch of active PV policies in various countries, the photovoltaic industry is expected to resume rapid development. According to EPIA, the PV market will maintain a rapid growth of 30%-40% in the next five years, and the growth rate will reach 20%-30% in the next 10 years. It is estimated that the global installed capacity of photovoltaics will be 15GW in 2010, an increase of 110% year-on-year, and the annual demand for photovoltaic-specific diamond lines will reach 3.87 million km. The market space is huge. At present, western countries such as Europe and the United States have widely used polysilicon micro-cutting line technology, and the domestic market is also widely promoted. It is expected to be replaced in a few years, and the market space is huge. (IV), target price of 30 yuan, maintain the recommended rating, long-term holdings of the company's business has entered a high-speed growth period, the downstream diamond products tool business broke out soon. We predict that the company's 2011-2013 compound compound growth rate will exceed 45%. Since our first major recommendation in July 2010, the share price has risen by more than 140%. According to the current share capital, we adjust the EPS of the company in 2011 and 2012 to 0.55 yuan and 0.8 yuan respectively. Taking into account the company's high growth, combined with industry valuation, we maintain the target price of 30 yuan unchanged, maintaining our previous "buy" rating. Yu Diamond: Performance is in line with expectations, expecting new business categories: Company research institute: Galaxy Securities Researcher: Qiu Shiliang, Yan Houlin Date: 2011-07-15 1. Event company released performance pre-announcement, profit for the first half of this year: 65 million yuan-7000 Ten thousand yuan, a year-on-year increase of 78%-92%, in line with our previous expectations. 2. Our analysis and judgment (I), the performance growth was due to the expansion of production capacity and sales in the first half of the year. The pre-increase was in line with our expectation, mainly due to the company's investment in super-raised funds to expand production capacity and technological transformation last year. effectiveness. (II) Integrated industrial chain and technological advantages constitute the core competitiveness The company's sales gross margin in 2010 was 45.73%, up 0.51% from the same period of last year, slightly up 0.10% from the mid-2010 period. The profitability was strong and stable, and the gross profit margin was much higher. For competitors. We believe that the company's integrated industrial chain and technological advantages will constitute the company's long-term core competitiveness, and the company's product gross margin can continue to maintain high levels. (III) The future of the micro-cutting line project for the photovoltaic industry is far-reaching. At present, governments of all countries are actively developing clean energy. With the decline of technology upgrade costs and the launch of active PV policies in various countries, the photovoltaic industry is expected to resume rapid development. According to EPIA, the PV market will maintain a rapid growth of 30%-40% in the next five years, and the growth rate will reach 20%-30% in the next 10 years. It is estimated that the global installed capacity of photovoltaics will be 15GW in 2010, an increase of 110% year-on-year, and the annual demand for photovoltaic-specific diamond lines will reach 3.87 million km. The market space is huge. At present, western countries such as Europe and the United States have widely used polysilicon micro-cutting line technology, and the domestic market is also widely promoted. It is expected to be replaced in a few years, and the market space is huge. (IV), target price of 30 yuan, maintain the recommended rating, long-term holdings of the company's business has entered a high-speed growth period, the downstream diamond products tool business broke out soon. We predict that the company's 2011-2013 compound compound growth rate will exceed 45%. Since our first major recommendation in July 2010, the share price has risen by more than 140%. According to the current share capital, we adjust the EPS of the company in 2011 and 2012 to 0.55 yuan and 0.8 yuan respectively. Taking into account the company's high growth, combined with industry valuation, we maintain the target price of 30 yuan unchanged, maintaining our previous "buy" rating. Boshen Tools: Thailand to build a factory to help open up overseas markets Category: Company Research Institute: Guojin Securities Researcher: Zhao Ganming Date: 2011-06-01 Event Boshen Tools announced on May 31, 2011: will not be invested in "high The fundraising project of the performance laser welding professional diamond tool technical transformation project was used for the initial investment of “investing in a wholly-owned subsidiary project in Thailandâ€, and the amount of funds raised for change of use accounted for 49% of the company’s total funds raised. 31.08% of the 9.1 million yuan. Invested in Thailand to set up a wholly-owned subsidiary project total investment of 293,263,300 yuan, project investment is divided into three years of phased investment, of which, in 2011, invested 165,055,400 yuan, in 2012 invested 45,567,500 yuan, invested in 2 in 2013, 457.34 million yuan. Commenting on the establishment of a factory in Thailand can completely solve the anti-dumping tariffs in Europe and the United States: 1. The company's original investment project laser welding diamond tools are mainly for the European and American markets, but these markets have become more and more strict anti-dumping against Chinese goods in recent years, and the company may face a larger future. Foreign trade risk. 2. Thailand exports zero tariffs to Europe and the United States, and the Thai factory will help stabilize European and American exports. 3. Domestic manpower and land costs have risen rapidly. The two types of costs in the Thai industrial park are relatively low, and long-term tax incentives are granted to foreign investors. The main raw material steel of diamond tools can be purchased nearby, so the overall production cost is similar to or even lower in China. It has a positive impact on the development of the Indian market: 1. India's GDP growth rate in the past three years is 8.5-9%, but infrastructure construction is long-term backward, and it will become the investment focus in the future, and the demand for consumables such as diamond tools is large. India's domestic machinery manufacturing capacity is weak, diamond tools are not popular and basically rely on imports, which is a huge opportunity for Chinese related companies. 2. In order to protect its domestic industry, India has imposed high tariffs on Chinese imports, which has seriously affected Chinese local enterprises to enter their markets. According to the Thailand-India FTA agreement, the future tariffs on Thailand's exports to India will gradually drop to zero. The Thai factory has completely eliminated the company's tax barriers to India's exports, which is conducive to the company's long-term development. Due to limited production capacity and rising costs, the 11-year profit forecast is revised downwards: 1. The company expanded the production capacity of laser-welded diamond tools last year, but the demand for low-end sintered saw blades in domestic and foreign markets has increased rapidly this year, power tools and alloys. The tool is slow in the process of expanding production capacity, and the company's internal staff is also adjusting, so the income forecast is slightly lowered. 2. This year, the company introduced new management teams in various places, refined channels, and increased the promotion of power tools and alloy tools, which will make the annual expense ratio higher. We predict that the company's net profit margin will decline by 1.4% year-on-year. %. Taking into account the above factors, we cut the company's 11-year profit forecast by 11%, and 11EPS is 0.406 yuan. Earnings adjustment We adjusted our earnings forecast based on the company's operating conditions, and lowered our 2011/2012 earnings forecast to 92 million and 127 million. The net profit increased by 36.53% and 38.90% year-on-year, with a reduction of 11% and EPS of 0.406 and 0.564 yuan respectively. Investment suggestion The company's stock price of 12.18 yuan on May 30 corresponds to 30X11PE/22X12PE. Maintain the “Buy†rating considering the growth rate of the company's main business and the future development potential of the high-speed rail brake pad project. Sifangda's in-depth research report: still need to wait for the fundraising project to force the category: Company research institute: Northeast Securities Researcher: Pan Xifeng Date: 2011-06-14 The company is the largest and most technically strong polycrystalline diamond superhard composite material in China. Manufacturer. In addition, the company is one of the few companies in the world that can produce a full range of super-hard composite materials and products. We believe that the company is a leading company in the domestic super-hard composite materials industry and has certain first-mover advantages. In 2010, the company achieved revenue of 112 million yuan, a year-on-year increase of 32.42%. In the first quarter of 2011, the company achieved revenue of 25.14 million, an increase of 17.15% year-on-year, slightly lower than our previous expectations. As the fundraising project has not yet been able to exert its strength, we believe that the company's revenue growth rate is expected to rebound to a higher level in the future. In recent years, the company's gross profit margin and net profit margin have remained at a high level of 60% and 34%. However, in the first quarter of 2011, the company's gross profit margin and net profit margin both declined significantly year-on-year. After carefully analyzing the reasons, we believe that the decline in the company's profitability is mainly caused by some sporadic factors, and the company's profitability is expected to return to a high level in the future. According to our sub-business forecasts, the company's earnings per share for 2011, 2012 and 2013 were 0.58, 0.83 and 1.15 yuan respectively. Compared with the comparable company Yellow River whirlwind, pre-diamond, Boshen tools, etc., the company's price-earnings ratio is slightly higher. In addition, the current 2011 and 2012 P/E ratios of SME and GEM are 24.64, 28.51 and 18.17 and 19.98, respectively. The company's current valuation level has also reflected the company's high growth expectations to a certain extent, so we temporarily give the company a cautious recommendation rating. Risk: The replacement of foreign superhard composite products by foreign products and the replacement process of superhard composites with cemented carbides may be lower than expected.
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