Saturday, October 6, 2018

Random thoughts: Sarine Technology update

Not vested yet.

I continue to read up on Sarine technology, or rather, more on Lab growth Diamond and synthetic diamond.

I scuttlebutt at one local retailer, and ask if they sell lab growth Diamond. He told me they dun, but it can be already be found quite easily in Singapore market.

He told me lab grown diamond will lose its shine after a long time as compared to natural diamond. Well, that is a good one because no one can verify long time now.

He goes on to say they have buy back policy for diamond and there is no such for synthetic diamond.

I tested his sincerity but checking if it is cheaper by 20- 30 percent. I know debeer create diamonds that are 80 percent cheaper. So it should be anything between 30 to 80 difference. He first tried to evade the ans by saying it depends. But when I come back to the qn  he said for his own opinion, it can goes up to 50 percent. BINGO!

When I ask around if anyone would buy a sythentic diamond, one mentioned it depends if there is accreditation that it is real diamond, meaning it's made of carbon hahahah.

I checked online and realized that there is accreditation for lab growth Diamond although there is some resistance from GIA to grade and accredited it specifically.

I change my thesis.

This could well be a big disruptor and is a war not easily won by incumbents.

If sythentic diamond offer buyback and accreditation, then the only differentiation would be the atas vanity effect to differentiate market segment. Although there is worse secondary market for sythentic than natural diamond now. I believe sythentic diamond would make secondary market for natural diamond even more challenging, such that any small stored value is considered as negligible for both diamonds

But there would have become a niche market and lost the mass market. Remember the farmed salmon and wild salmon thingy in my previous post.

If one is concerned about value, I would buy sythentic compare to natural because if a jeweler can't tell the difference, who is going to risk paying a premium even with accreditation?

Not only that, if I understand the young better, the yolo generation cares quite a fair bit about ideas and sustainability. Natural diamond marketing is a diamond is forever, and it is used to link to love.

Sythentic diamond claim to be green, sustainable and conflict free. In short, there is no blood stain on your pledge of love. I think that is quite a strong narrative that can easily catch on.

The things is, sythentic diamond require cutting, and polishing too. Sarine Tech has the capability to do that.

Right now, it's a war like oil sand and conventional crude by OPEC.

Debeer want to undercut the margin and at the same time, differentiate the natural diamond premium.

I think Sarine do not have any binding agreement with natural diamonds supplier, but going to the other side too early only risk angering the suppliers and customers.

In conclusion,

Sarine will survive, no matter who win the war. But before one side dominate, it can just make do with the smaller pie before switching ...

I would think it's really worth watching, like the CDG and Grab fight.

This time, I think I will not make the same mistake of not taking action when it is clear which side is gaining 

2 comments:

  1. Hi,

    You can consider looking at Value Investor Asia YouTube page whereby they have a lot of analysis on the counter as well as interviews from the ceo. I am not vested nor done any research on the company but thought it might be good to share.

    You can consider doing a porter 5 forces analysis of the company to see if a moat exists. Do your own due diligence!

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    Replies
    1. Hahah thanks man INTJ

      For the head up. Will definitely look at it

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