Down 96 percent, profits triple: China's lab-grown paradox
Henan's Power Diamond guides first-half net profit to 80–93 million yuan, nearly triple last year, on revenue almost doubling to about 450 million yuan — in a category whose wholesale prices have fallen 96 percent since 2018.
By The Grown Desk
What changed
The lab-grown diamond price collapse is the most documented fact in the modern jewelry trade; the profitability of the companies causing it is the least.
What it means
- Stop reading the 96 percent as an obituary; it is a cost curve, and cost curves have owners. The profits are consolidating with whoever runs the cheapest reactors and whoever owns the consumer brand — the middle, as ever, gets nothing.
- For jewelers the practical read is stable: grown-diamond supply gets cheaper and more industrial from here, which makes margin discipline and honest two-tier positioning more valuable, not less.
Key figures
| H1 net profit | 80–93M¥ |
|---|---|
| revenue | ~450M¥ |
| LGD wholesale since 2018 | −96% |
| global LGD market (127B¥) | $18.8B |
Source: Power Diamond H1 guidance
Both halves of the paradox are true at once
Power Diamond, a manufacturer in China's Henan province, told investors this week to expect first-half net profit of 80 to 93 million yuan — nearly triple a year earlier — on revenue almost doubling to roughly 450 million yuan, per the South China Morning Post.
The company credits manufacturing-process breakthroughs and robust export growth, with the United States its largest source of demand.
A cost curve, not an obituary: price and low-cost margin part ways. Carat Capital graphics desk.
A commodity on a technology curve rewards the cheapest producer
Both halves of the paradox are true at once. Wholesale lab-grown prices are down 96 percent since 2018, and this page has charted every leg of the fall.
But a commodity on a technology curve rewards the producer whose costs fall faster than the price — each reactor-efficiency gain lands directly in margin, and volume does the rest.
The global lab-grown market now runs about 127 billion yuan, or $18.8 billion, and analysts expect China to account for nearly two-thirds of world output by 2030, with Henan the industrial core. Power Diamond's guidance is what winning that race looks like in a filing.
Money is funding the consolidation, not fleeing it
The capital markets have noticed on both sides of the Himalayas. Limelight Diamonds, an Indian lab-grown producer, raised Rs 275 crore this week — flagged in the Association of Intelligent Diamond International's weekly review as a signal of investor appetite for grown-diamond manufacturing even as the natural sector contracts.
Money is not fleeing the category that crashed; it is funding the consolidation of it.
The natural industry's same-week split-screen was stark: De Beers pausing Venetia for two years and warning, in the SCMP's paraphrase, of protracted challenging conditions as the industry evolves.
The two supply chains are now running opposite playbooks — natural withholding carats to defend price, grown adding reactors to defend share — and both, on the current evidence, are rational.