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  • LED Industry Winter Is Coming?
    Oct 24, 2018

    According to the industry's previous statistics on the semi-annual reports of 41 listed companies, 14 of them have net profit declines, and currently 22 companies that have disclosed the results of the first three quarters of the company have seen 11 net profit declines, and net profit has fallen. The proportion of enterprises rose from 34% to 50%.

    The increase in financing costs has led to an increase in financial costs. As for the reasons for the decline in earnings, many companies mentioned in the announcement that the company's financing costs continue to increase and financial expenses increase. The policy impact of the government's compression of monetary policy has begun to show its manifestations, especially for small and medium-sized enterprises that are difficult to finance.

    The rising production costs are also an important reason for the decline in corporate profits. According to the statistics of industrial producers published by the National Bureau of Statistics on October 16, the ex-factory price of industrial producers in China rose by 3.6% year-on-year in September, up 0.6% from the previous month. The purchase price of industrial producers rose by 4.2% year-on-year and 0.6% quarter-on-quarter. From January to September, the ex-factory price of industrial producers rose by 4.0% over the same period last year, and the purchase price of industrial producers rose by 4.5%.

    Interpretation of the performance forecast for the first three quarters: The market pessimism is getting stronger, is the industry winter coming?


    Image source: National Bureau of Statistics

    Interpretation of the performance forecast for the first three quarters: The market pessimism is getting stronger, is the industry winter coming?


    Image source: National Bureau of Statistics

    As can be seen from the above data, the production cost of enterprises is generally on the rise. Before the wave of material and chip prices in the industry, there may be a glimpse of one or two.

    The weak bargaining power caused price competition to lead to a decline in profits. LED products, especially general-purpose lighting products, are products with relatively low technical content and weak bargaining power. Consumers are sensitive to price and it is difficult to raise prices. In fact, the price war in the field of general lighting is the more normal existence, and the price increase does not exist. Unfortunately, most of China's LED companies are concentrated in the field of general lighting. The withdrawal of international giants such as 昕诺飞, OSRAM, GE, etc. from the general lighting market is the most intuitive manifestation of the decline in profits caused by weak bargaining power in this segment. After the giants withdrew, the general lighting market was further concentrated, which further exacerbated price competition among manufacturers.

    In addition, the downturn of the overall economic situation, the increasingly complex international environment, and the reduction of government support for the LED industry have led to the gradual fermentation of pessimism in the industry. The specific performance can refer to the stock prices of various listed companies since the beginning of this year. From the beginning of the year, the company has been in a collective diving state. In addition, the recent A-shares caused by the impact of US stocks have plummeted. As of now, almost all LED listed companies have been smashed, and individual companies even have stock prices. A thigh has appeared. However, in the A-shares whose stock price and performance have little relationship, it is good if everyone happens nothing, provided that you did not buy the stock of the LED company.

    Abbie’s business in the low tide period: Abbison: The turnover has increased, and the net profit has tripled.

    According to the results announcement released by Abeson on October 8, the company expects the net profit attributable to shareholders of listed companies from January to September 2018 to 175 million to 180 million, a year-on-year change of 214.00% to 223.00%. .

    The main reason for the company's net profit growth attributable to shareholders of listed companies is that the company achieved operating income of approximately 1.334 billion yuan, a year-on-year increase of 51%, achieving rapid growth; affected by the appreciation of the US dollar, exchange income increased; operating income increased significantly In this case, the increase in administrative expenses is low.

    Low-end enterprises in the state of the snow Shell: net profit plummeted three times, is expected to lose 2018 annual performance

    As the saying goes, some people are happy. On the evening of October 18, Shellett released the third quarter report of 2018, and its performance plummeted more than three times. At the same time, Shell Wright expects a loss of 70 million yuan to 90 million yuan in 2018.

    The report shows that the company achieved revenue of 181,154,465.66 yuan in the third quarter, down 27.85% year-on-year; net profit attributable to shareholders of listed companies was 38,960,332.06 yuan, a sharp drop of 353.67%.

    In the first three quarters, revenues reached RMB 536,398,003.09, down 23.74% year-on-year; net profit attributable to shareholders of listed companies was RMB 55,153,617.73, a year-on-year decrease of 281.75%.

    In the low tide period, the company has a lot of money: the first year of the listing is a loss, the policy subsidy can not be used clearly, the high-level reduction is running fast.

    Jucan Optoelectronics, which was listed in March 2017, saw an increase of 141 million in operating income and a net profit of 409 million in the year of listing. Both of them showed a relatively significant increase, but the operating cash flow only increased by more than 3 million. Operating income and net profit do not match the operating cash flow quite.

    According to the prospectus, the policy subsidy finance of Jucan Optoelectronics from 2014 to 2016 was RMB 25 million, RMB 27 million and RMB 33 million, accounting for 38.96% and 98.60% of the total profit for the current period. .80%. The government subsidies included in the current profit and loss for 2014-2016 are about 88.55%, 30.04%, and 42.58%. According to the accounting standards, if the subsidy cannot be directly used for production in the current period, it should be included as deferred income. However, according to this method analysis, the proportion of current profit and loss in the year of 2015 decreased sharply, indicating that a large number of construction projects in the year have not yet been put into production.

    Interpretation of the performance forecast for the first three quarters: The market pessimism is getting stronger, is the industry winter coming?

    According to the prospectus of Jucan Optoelectronics, the projects under construction in 2014-2016 are 0.18 billion, 0.77 billion, and 35 million. In 2015, the increase of 0.59 billion yuan can be clearly stated. Not yet accepted, that is to say, it has not been installed and put into production.

    On the evening of September 25, 2018, it was announced that the shareholders of Jucan Optoelectronics and Dong Jian were not able to reduce their holdings by 11.61%, a total of about 455 million yuan. According to the disclosure of Jucan Optoelectronics itself, the third quarter of 2018 will be worth 670 million!

    In the low tide period, the company is carrying a lot of weight: Liard and Zhou Ming call for employees to increase their holdings to cheer for the industry.

    Liard announced on the evening of October 16 that the company’s chairman and actual controller Li Jun submitted the “Proposal on Encouraging Internal Staff to Increase Company Shares” for the second time to the company’s Board of Directors, and promised that the company and the company All employees of the capital and holding subsidiaries confirm the amount to be purchased in advance, and complete the net purchase of Liard shares from October 17 to October 26, 2018, for more than 12 months, and holding period In the continuous performance of Liard, the proceeds of these Liard stocks are owned by the individual employees. If the losses caused by these stocks are compensated by Li Jun himself.

    Immediately afterwards, Zhou Ming Technology announced on the evening of October 17 that the company's controlling shareholder and actual controller Lin Yifeng submitted the "Proposal on Encouraging Internal Employees to Increase Company Shares" to the company's Securities Affairs Department. All employees of the Initiative Company and its wholly-owned subsidiaries and holding subsidiaries actively buy shares of the company, and during the period from October 19, 2018 to October 26, 2018, they will complete a net purchase of no more than the agreed amount (not less than 1000 shares). ), if the full amount is held continuously for more than 12 months, and the company continues to perform in the company during the holding period, the proceeds are owned by the individual employees, and the losses are compensated by Lin Weifeng.

    This kind of performance is expected to be better, and the call for compensation has indeed received immediate results. Affected by the call, Liard shares opened higher on the day until the daily limit and continued to close; Zhou Ming Technology's closing price on the 17th rose 3.58%, the intraday increase was as high as 6.71%.