Zenith Lab (Jiangsu) Co.,Ltd , https://www.zenithlabo.com
Abstract Yu Diamond's net profit in 2012 declined by 18.42% year-on-year, falling short of market expectations. This was primarily due to rising financial expenses, increased equity incentives, and a drop in the price of single crystal silicon. In 2013, the company's P/E ratio stood at 13.7, significantly lower than the industry average of 16 times, yet it maintained the "Strongly Recommended-A" investment rating.
The company reported a net profit of -18.42% year-on-year, which was below our projections. For the full year, Yu Diamond achieved sales revenue of 551 million yuan, operating profit of 137 million yuan, and a net profit of 115 million yuan, representing growth of 18.52%, a decrease of 16.86%, and a decline of 18.42%, respectively. Earnings per share were 0.20 yuan, or 0.40 yuan per 10 shares (including tax). The net profit margin for the year was 22.45%, while the return on net assets was 9.50%, both declining compared to previous periods by 7.99 percentage points and 2.39 percentage points, respectively.
The underperformance in the fourth quarter was a key factor behind the disappointing annual results. The gross margin for Q4 was 31%, and the net profit margin was 8%, down 18 percentage points and 21 percentage points from the same period last year—marking the lowest levels since the 16th quarter. While the production of single crystals met expectations, the output and sales of polysilicon-cut micron diamonds fell below forecasts, contributing to the overall decline in profitability.
This performance highlights the challenges the company faced in managing costs and maintaining margins amid a weakening market environment. Investors are closely watching how Yu Diamond will respond to these pressures and whether it can restore its growth trajectory in the coming quarters.