Market Context and Implications for SF DIAMOND

The Shanghai‑Shenzhen market opened on October 21, 2025, with a strong, risk‑premium‑driven rally that lifted the Shanghai Composite, Shenzhen Component and ChiNext indices by 1.2 %, 1.97 % and 2.92 % respectively. A total of 1.16 trillion CNY of trading volume was recorded in the first half of the day, indicating robust liquidity across the market. Central bank operations—specifically a 7‑day reverse repurchase of 159.5 billion CNY at a 1.40 % rate—provided an additional liquidity injection, supporting the broad‑based upward momentum.

Among the leading sectors, the super‑hard materials cluster emerged as the most active theme, with an average gain of roughly 4 % in early trading. Within this cluster, SF DIAMOND’s peers—four‑angle reach (四方达), Hubei Diamond (黄河旋风), and Huifeng Diamond (惠丰钻石)—posted gains ranging from 9 % to 13 %, reinforcing the perception that the sector is benefiting from structural demand in high‑precision tooling, drilling, and advanced manufacturing. The sector’s performance is underpinned by several macro drivers:

  1. Infrastructure and Energy Expansion – China’s continued investment in coal mining, shale gas extraction and the development of deep‑sea and deep‑ground resource projects has amplified demand for durable cutting tools and abrasives.
  2. Manufacturing Modernisation – The shift toward high‑end CNC machining, aerospace component fabrication and automotive lightweighting creates a sustained need for polycrystalline diamond (PCD) and polycrystalline cubic boron nitride (PCBN) products.
  3. Export Opportunities – With SF DIAMOND exporting to roughly 40 countries, global trade recoveries, particularly in the United States, Europe and Southeast Asia, provide a tailwind that may offset domestic cyclical fluctuations.

SF DIAMOND: Positioning and Growth Prospects

SF DIAMOND operates out of Zhengzhou and specialises in a comprehensive range of super‑hard materials, including PCD die blanks, PDC cutters, PCBN inserts, and super‑abrasives. Its product portfolio serves a broad spectrum of applications—from wire drawing and mining to aerospace and national defence—ensuring diversified revenue streams. The company’s market capitalisation stands at 6.79 billion CNY, and its price‑earnings ratio of 63.32 reflects the premium placed on its high‑margin, high‑technology business model.

The current market rally has placed SF DIAMOND at the forefront of investor attention for several reasons:

  • Sector Momentum – As the super‑hard materials theme climbs, firms with a proven track record of technology leadership and export capability—SF DIAMOND included—are likely to benefit disproportionately.
  • Supply‑Chain Resilience – The company’s position within the Zhengzhou industrial cluster, coupled with a robust domestic supply chain for raw materials, positions it to meet escalating demand without significant bottlenecks.
  • Innovation Pipeline – SF DIAMOND’s ongoing R&D efforts in thermally stable PCD products and next‑generation super‑abrasives align with the industry’s push toward higher‑temperature, longer‑life tooling solutions, providing a competitive edge against peers.

Forward‑Looking Outlook

Given the current trajectory of the super‑hard materials sector and the broader macro environment, SF DIAMOND is poised for accelerated growth in the near term. Expected catalysts include:

  1. Expansion of Deep‑Ground Projects – Government emphasis on “deep‑sea and deep‑ground” standardisation projects is likely to translate into new contracts for high‑performance cutting tools.
  2. Export Recovery – As international trade tensions ease, SF DIAMOND could capture increased market share in key export regions, particularly in North America and the European Union.
  3. Technological Advancements – Continued investment in PCD and PCBN product development will enable the company to command premium pricing and secure long‑term service contracts.

In summary, the October 21 market conditions—characterised by a risk‑premium‑driven rally and a surge in super‑hard materials activity—create an optimal environment for SF DIAMOND to capitalize on its technological strengths and expanding global footprint. Investors should monitor the firm’s earnings announcements and contract pipeline releases, as these will provide concrete indicators of its ability to translate sector momentum into sustained profitability.