Core Viewpoint - The article highlights the importance of technological innovation in enterprises, exemplified by a 60-year-old company in Zhengzhou that has successfully adapted to market demands and expanded into new sectors through continuous innovation [1][2]. Company Overview - Zhengzhou Abrasives Research Institute Co., Ltd. (referred to as "Sanmo Institute") was established to develop synthetic diamonds to break the Western blockade after the founding of New China [2][4]. - The company successfully produced China's first synthetic diamond in 1963, marking a significant milestone in the superhard materials industry [2][4]. Historical Achievements - In 1965, the Sanmo Institute developed the first six-sided press, enabling mass production of synthetic diamonds, and in 1966, the first cubic boron nitride was successfully developed, completing the puzzle of superhard materials [4]. - Currently, China's synthetic diamond production accounts for approximately 95% of the global market [4]. Technological Advancements - The company has upgraded its machinery, including a new six-sided press with larger diameter, higher performance, and longer lifespan, reflecting its commitment to innovation [4][5]. - The Sanmo Institute has expanded its product offerings to include high-speed grinding wheels, which have been adopted by international automotive manufacturers [5]. Market Expansion - The company has shifted its focus to emerging industries such as automotive and electronics, adapting to new market demands and overcoming challenges during its transformation [5][6]. - Recent developments include the creation of precision superhard grinding tools for humanoid robots, showcasing the company's ability to innovate in complex and high-precision applications [6]. Product Diversification - The application of synthetic diamonds has broadened from industrial materials to functional materials and consumer products, including cultivated diamond jewelry [6].

Core Viewpoint - The article discusses China's dominance in the synthetic diamond industry, highlighting its technological advancements and the implications of recent export controls on superhard materials, which could impact global semiconductor production costs and capabilities [11][12][28]. Group 1: Synthetic Diamond Industry Overview - The synthetic diamond industry in China originated from the development of the six-sided press machine in the 1960s, enabling the country to produce industrial-grade synthetic diamonds independently [9][10]. - As of now, China accounts for 95% of the global synthetic diamond production, with Henan province contributing approximately 80% of the national output [10][11]. Group 2: Export Controls and Strategic Implications - Recent export controls on synthetic diamond products, including micro-powder, single crystals, and grinding wheels, are seen as a strategic move to increase production costs for foreign semiconductor manufacturers [11][12]. - The inability of foreign companies to produce six-sided press machines limits their capacity to expand synthetic diamond production, reinforcing China's market position [13]. Group 3: Future Risks and Opportunities - Despite China's current advantages, there is a risk of foreign competitors utilizing chemical vapor deposition (CVD) methods to produce synthetic diamonds, which could disrupt the market [16][18]. - The demand for diamond-based thermal management solutions in AI chips and other technologies is projected to grow significantly, with the diamond cooling market expected to expand from $5 million in 2023 to $15.24 billion by 2030 [24][28].

Core Viewpoint - The article discusses China's dominance in the synthetic diamond industry, highlighting its technological advancements and recent export controls that could impact global semiconductor production costs, particularly in the context of AI and high-performance computing [13][14][27]. Group 1: Synthetic Diamond Production - The majority of synthetic diamonds are produced in Henan, China, which accounts for approximately 80% of the country's total output and 95% of the global production [12]. - The development of the six-sided press machine in the 1960s marked a significant milestone, enabling China to produce synthetic diamonds independently [9][10]. - Technological advancements, such as the powder catalyst process and indirect heating techniques, have improved the efficiency and reduced energy consumption in diamond production [11][12]. Group 2: Export Controls and Strategic Implications - Recent export controls on synthetic diamond products, including micro-powder, single crystals, and grinding wheels, are seen as a strategic move to increase production costs for foreign semiconductor manufacturers [13][14]. - The export restrictions are comparable to those imposed on rare earth materials, positioning synthetic diamonds as a critical leverage point in international trade [13][14]. Group 3: Risks and Future Developments - Despite China's current advantages, there is a potential risk of foreign competitors utilizing chemical vapor deposition (CVD) methods to produce diamonds, which could lead to a shift in the market dynamics [18][19]. - The demand for diamond-based thermal management solutions in AI chips and other high-performance applications is expected to grow, creating new opportunities for the diamond industry [24][27]. - Domestic advancements in semiconductor technology, particularly in diamond substrate applications, are crucial for maintaining competitive advantages in the evolving market [27][28].

Core Insights - The article highlights the vibrant economic development in Shangqiu, focusing on the growth of various industries and the implementation of innovative strategies to enhance manufacturing capabilities [1][2][3]. Industry Developments - The establishment of over 200 industrial robots at Henan Asbela Refrigeration Co., Ltd. has addressed the long-standing issue of a lack of core components in the local refrigeration industry, thereby improving the supply chain [1]. - The world's largest cultivated diamond production facility is located in the Suiyang District, which aims to extend the cultivated diamond industry into design and other downstream sectors [1]. - Shenhuo New Materials Technology Co., Ltd. has achieved mass production of 8-micron double-sided photovoltaic battery foil, marking a significant advancement in the "coal-electricity-aluminum" industry chain [1]. Economic Growth - Shangqiu has formed a distinctive industrial pattern with "one county, one characteristic industry," leading to the selection of superhard materials as a national advanced manufacturing cluster [2]. - In 2024, the industrial added value of high-tech manufacturing and strategic emerging industries is projected to grow by 37.8% and 16.6% year-on-year, respectively, significantly outpacing provincial averages [2]. - The city's GDP is expected to reach 327.227 billion yuan in 2024, with stable grain production exceeding 14 billion jin [2]. Innovation and Technology - The implementation of an innovation-driven development strategy has resulted in the establishment of 7 national high-tech industrialization bases and 6 provincial high-tech zones, leading to significant advancements in technology [3]. - The region has nurtured 19 gazelle enterprises and 4 innovation-leading companies, showcasing a robust ecosystem for technological advancement [3]. Urban and Rural Development - The city is enhancing its urban infrastructure while simultaneously promoting rural industries, with several towns recognized for their agricultural strength [4]. - Initiatives aimed at improving urban living conditions and rural environments have led to recognition for excellence in community development [4]. Reform and Open Economy - The deepening of state-owned enterprise reforms has positioned Shenhuo Group as a benchmark enterprise, reflecting the city's commitment to improving the business environment [5]. - Shangqiu's logistics center has maintained its position as a leader in import and export volumes, supported by recent reforms in customs and trade [5].

Core Viewpoint - Company anticipates growth in profitability driven by special bearings, high-end consumer bearings, superhard materials, and composite superhard materials, focusing on high-end, intelligent, and green transformation [2] Financial Performance - In Q1 2025, the company reported revenue of 703 million, an increase of 10.48% year-on-year; net profit attributable to shareholders was 88.48 million, up 3.46%; earnings per share rose to 0.1673, a 2.58% increase [4][6] - The company has a debt ratio of 33.57% and a gross profit margin of 29.81% [6] Shareholder Information - As of April 30, 2025, the company had 43,499 shareholders [3] - The company is aware of the low presence of institutional investors among its top shareholders and is taking measures to improve market communication and enhance company value [5] Business Strategy - The company is focusing on developing its new materials sector, particularly in diamond functional applications, which is expected to become a significant business pillar in the next 3-5 years [2] - The company is considering mergers and acquisitions as a growth strategy when suitable opportunities arise [5] Market Position - The company has developed a series of bearings for industrial robots and is exploring market opportunities in the robotics sector [6] - The company aims to enhance its market competitiveness and profitability to attract more long-term investors [5] Analyst Ratings - Recently, one institution has given a buy rating for the stock [7] - Financing data indicates a net inflow of 74.62 million in the last three months, with an increase in financing balance [8]

Group 1: Company Performance - As of April 30, 2025, the number of shareholders is 43,499 [4] - In Q1 2025, the company reported revenue of 703 million, an increase of 10.48% year-on-year [5] - The net profit attributable to shareholders is 88 million, reflecting a growth of 3.46% compared to the same period last year [5] - Earnings per share increased by 2.58% to 0.1673 yuan per share [5] Group 2: Business Growth Areas - The company anticipates growth in special bearings, high-end consumer bearings, superhard material tools, and composite superhard materials as key profit drivers [2] - The new materials sector aims to advance the functional application of diamond and special diamond products, expected to become a significant business pillar within 3-5 years [2] - The basic components sector focuses on high-precision machine tool bearings and electric spindles to meet national industrial development needs [2] Group 3: Market Position and Strategy - The company is aware of its low valuation compared to peers and aims to enhance market competitiveness and profitability [6] - Factors affecting the low presence of institutional investors include industry characteristics, market perception, and liquidity concerns [6] - Measures to attract institutional investors include improving market communication, enhancing company value, and optimizing shareholder structure [6] Group 4: Future Considerations - The company is open to mergers and acquisitions when suitable opportunities arise [5] - There is potential interest in the robotics industry, although no current partnerships exist [6] - The company has developed a series of bearing products for industrial robots, indicating readiness to explore this market [6]