IPO Analysis: Yu Diamond

Yu Diamond issued 38 million shares with an issue price of 21.32 yuan and a total share capital of 152 million after the issue.
Yu Diamond is one of the major manufacturers of synthetic diamonds in China. The company's main products are synthetic diamonds. In 2009, the company produced 400 million carats of synthetic diamonds, ranking third in China in terms of production and sales, second only to the Central South Diamond and the Yellow River whirlwind. In 2009, the company's product market share in China was 7.45%. The actual controller of the company is Guo Liuxi, who directly holds 37.9% of the shares of the company before the issuance.
As a kind of super-hard material, synthetic diamond has high compressive strength, high wear resistance and corrosion resistance, so it is widely used in sawing, grinding, cutting, drilling and other tools. According to statistics, in 2006, the market size of China's super-hard materials products was about 20 billion yuan, and the market size of super-hard materials was about 4 billion yuan. In 2010, it will increase to about 37 billion yuan and 6 billion yuan respectively; in 2012, it will reach 473 yuan respectively. 100 million yuan and 9 billion yuan. In addition, the current market size of super-hard materials and products in the international market is about 11 billion US dollars, and the growth rate is about 10%. The market prospect is also very broad. The current production capacity of the company is 420 million carats. The overall scale of the company is located in the cyclone of the Yellow River and Central South. After the company, the market share is the third in the synthetic diamond industry. Although the market share of the company's synthetic diamond products has increased year by year in recent years, there is still a significant gap compared with the previous two. After the fundraising project is completed, the company's production bottleneck will be solved and the production capacity will be further improved.
The company always regards the promotion of innovation capability as the most important means of enterprise competition, thus accumulating certain technological advantages. The performance of synthetic equipment is obvious, the cost is low, and the proportion of high-grade products is high.
The company's fund-raising investment mainly includes “300 million carats of high-grade synthetic diamond project with annual output”. After the project is put into production, the company's synthetic diamond production capacity will increase from 300 million carats to 720 million carats by 420 million carats, a year-on-year increase of 70%. Effectively solve the problem of the company's existing capacity shortage. After the successful implementation of the fundraising project, the company will effectively expand the company's production capacity and further enhance the company's overall research and development strength, thereby enhancing the company's competitiveness and ability to withstand market risks.
Comprehensive analysis of the company's future development trend and the investment project's production situation, we expect the company's 2010 and 2011 results are 0.32 yuan and 0.47 yuan, respectively, according to 2011 to give 30 ~ 35 times pe, the company's reasonable price is 14.1 ~ 16.5 yuan about. Investors are advised to apply carefully.

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