Gaogong LED Weekly Report - The Truth Behind the Performance of "Beautiful"

March 05, 2021

Key Analysis

This week, 22 LED stocks fell by 10 stocks, 11 stocks rose, 1 stock was suspended, and 22 stocks rose an average of 0.01%.

Twenty-four of the 24 companies that have announced their performance have performed brilliantly, while only six of the 13 listed companies have achieved rapid growth in their business. Five companies rely on mergers and acquisitions to supplement their performance. The increase in the performance of the home business due to the low base of the previous profit and the increase in non-operating income.

It can be seen from the list of transcripts of various enterprises that nearly half of the enterprises' revenues or profits or "camp" and "profit" doubled down, and even some enterprises suffered losses. The net interest rate of only 6 companies of 24 LED listed companies exceeded 10%.

High-tech observation

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â—‡ Display focus (1): The overall profit is higher and the market tends to concentrate (click for details)

The ex-factory price of the knife is only 0.5 yuan! (Click for details)

Market review

This week, 22 LED stocks fell by 10 stocks, 11 stocks rose, 1 stock was suspended, and 22 stocks rose an average of 0.01%. This week, Hongli Optoelectronics (300219) gained a good week, and Sanan Optoelectronics (600703), Guoxing Optoelectronics (002449) Wanrun Technology (002654) and Moso Power (002660) saw a large decline.

This week, the high-tech LED industry index closed at 1229.1 points, the weekly decline was 1.3%, the Shanghai and Shenzhen 300 index closed at 3018.28 points, and the weekly decline was 2.4%. Although both declined, the high-tech LED industry index performed slightly stronger than the broader market. The high-tech LED industry index fell again this week after a sharp decline for two consecutive weeks. It may rebound slightly in the short term, but the support is weak in the long run.

The truth behind the performance of "Juli"

In March 2016, most companies in the LED sector have submitted their transcripts for 2015. From the list of transcripts of various companies, it can be seen that nearly half of the company's revenue or profit or “camp” and “profit” double decline, and even enterprises. There was a loss, and from the perspective of corporate net interest rate, in 2015, only 6 companies in 24 LED listed companies had a net profit margin of more than 10%.

Chart 1: Revenue of listed companies in the LED sector in 2015

Data source: company announcement, GGII finishing

In 2015, it was a year of survival for many “fragile” LED companies, because they failed to survive the winter of this year; for many “healthy” LED companies, it’s chilly. One year, because they really feel the taste of death; for a few "physical and healthy" LED practitioners, it seems to be a very "harmonious" year, and there are not many incomes and profits.

However, are these “strong and healthy” LED companies really “physically strong”, or do they seem to be “external and strong” or rely on the “tonic” to maintain the “virtual image”? Let us Let's take a look at the truth behind the “strong” corporate performance.

In 2015, among the 24 LED listed companies that have published annual reports or performance reports, 13 companies have “camp” and “profit” double receipts, and revenue and net profit growth are more objective. However, behind the brilliant performance of various companies, there is a hidden truth.

Chart 2: 2015 “Ying” and “Lee” Double-received LED Listed Companies

Data source: company announcement, GGII finishing

Beautiful performance

â—‡ Aoyang Shunchang LED business performance is brilliant. In 2014, Aoyang Shunchang LED business realized operating income of 242 million yuan, contributing a net profit of 82,216,700 yuan to shareholders of listed companies, accounting for 48% of the net profit of listed companies. In 2015, LED business realized operating income of 367 million yuan. The net profit attributable to shareholders of listed companies was 113 million yuan, accounting for 47% of the net profit of listed companies.

â—‡ In 2015, Guoxing Optoelectronics continued to strengthen the integration of the industry chain and optimize the customer structure. On the other hand, the project was gradually completed, the production capacity was released, and the company's research and development capabilities, quality control capabilities and cost control capabilities were further enhanced. The company's sales revenue, operating profit and total profit continued to grow.

â—‡ In 2015, Hongli Optoelectronics achieved revenue of 1.588 billion yuan, a year-on-year increase of 56.02%, and net profit of 150 million yuan, a year-on-year increase of 65.03%. The growth of Hongli Optoelectronics was mainly due to the expansion of production capacity and the increase of major business. The other subsidiaries also contributed some achievements. In 2015, Smida promised a performance of 32 million yuan. If the performance of the subsidiary is deducted, Hongli Optoelectronics still has performance. With a 30% increase, performance is still impressive.

◇ In 2015, Liard’s revenues increased significantly, mainly due to the rapid growth of the small-pitch TV market, the performance of M&A companies and the expansion of overseas orders. In 2015, Liard's consolidated operating income reached 527 million yuan, and the net profit reached 125 million yuan. If the contribution of the 2015 mergers and acquisitions company was deducted, Liard's operating income increased by 26.8% in 2015, and net profit increased by 23%. Performance is still impressive.

â—‡ In 2015, Lianjian Optoelectronics achieved revenue of 1.535 billion yuan, a year-on-year increase of 58.2%, and net profit of 235 million yuan, a year-on-year increase of 75.1%. In 2015, the original business of Lianguang Optoelectronics grew steadily. Secondly, the business of UFIDA and EasyCard began to increase its performance for the company in March. According to the restructuring plan, Youtuo Public Relations and Easystar respectively promised that the net profit for 2015 will be no less than RMB 37.2 million and RMB 42 million. If the total performance is deducted, the net profit of Lianjian Optoelectronics will still increase by 16% in 2015. Still considerable.

â—‡ In 2015, Chau Ming Technology achieved revenue of 1.314 billion yuan, a year-on-year increase of 35%, and net profit of 118 million yuan, an increase of 93.39%. In 2015, the main reason for the growth of Zhouming Technology's performance was the growth of the company's overseas market and UTV small-pitch display products.

Relying on mergers and acquisitions to supplement performance

â—‡ In 2015, the growth of Wanrun Technology was benefited from the acquisition of Rishang Optoelectronics. In 2015, Rishang Optoelectronics realized revenue of 310 million yuan and net profit of 37.558 million yuan. From the date of purchase, the company's net profit attributable to the company was 37.552 million yuan. In deducting the contribution of Sunshine Optoelectronics, the net profit of Wanrun Technology declined by 53.17% in 2015.

â—‡ In 2015, the company achieved revenue of 1.419 billion yuan, an increase of 53.99%, and a net profit of 101 million yuan, an increase of 99.05%. The company's performance growth was mainly due to the acquisition of Kang Mingsheng. From the date of the merger to the end of the reporting period, Kang Mingsheng went to the Changfang Group. The net profit contributed was 87.671 million yuan. If the performance contribution of this part was deducted, the net profit of the 2015 senior group fell 74%.

â—‡ In 2015, Moso Power's revenue and net profit growth was considerable, mainly due to the steady growth of the company's main business and the consolidation of Founder's FPC business. In addition, the company received 35 million yuan to terminate the major asset restructuring compensation. The company has been able to turn a profit for the company's annual net profit.

â—‡ In 2015, Shell Wright achieved revenue of 798 million yuan, a year-on-year increase of 80.65%, and net profit of 586.922 million yuan, an increase of 240.06%. The main reason for the increase in the performance of Shell Wright in 2015 was the consolidated performance of Fushun Optoelectronics. In 2015, Fushun Optoelectronics promised a performance of 54.5 million yuan. If the performance contribution of Fushun Optoelectronics was deducted, the net profit of Snowlight in 2015 declined year-on-year. However, if Fushun Optoelectronics promised a large gap in performance, the net profit of Shellett could also increase.

â—‡ In 2015, Weiwei achieved a revenue of 1.902 billion yuan, a year-on-year increase of 179.68%, and a net profit of 136 million yuan, a year-on-year increase of 1568.51%. In 2015, Weiwei acquired Huayuan New Energy and achieved a significant increase in sales revenue and net profit. In 2015, Huayuan New Energy promised a performance of 200 million yuan. If the company's net profit of Huayuan New Energy in 2014 was deducted by 120 million yuan, the net profit of Weiwei's shares will still increase by 100% in 2015. The low base in the previous period is its The main reason for the substantial increase in performance.

Low base in the previous period

â—‡ In 2015, Ruifeng Optoelectronics adjusted its business strategy in a timely manner and continuously optimized the cost structure. The company's profits achieved a large increase and the net interest rate increased.

other

◇ In 2015, in the context of a sharp decline in operating profit, DeHao Runda’s total profit, net profit attributable to shareholders of listed companies, and basic earnings per share were basically the same as last year, mainly due to the transfer of its subsidiary, Kailei Motor. The income from the equity transfer was 466 million yuan (before tax), which is not the reason, the company is still in a loss state.

It is concluded that only 6 of the 13 listed companies with outstanding performance have achieved rapid growth based on their own business. The six companies are a chip company, two packaging companies and three application companies. The application companies are all based on the display business. Mainly; there are 5 companies that rely on mergers and acquisitions to supplement their performance. If the M&A business is deducted, the performance of some enterprises will decline significantly compared with the performance of the same period last year; in addition, there are two companies that are supplemented by the low profit base and non-operating income. The performance increased significantly. From this point of view, in 2015, the “cold winter” was actually “frozen and frostbite”. A large number of enterprises, only 25% of listed companies have achieved good growth. Looking forward to 2016, LED companies that have survived the harsh winter should welcome them. Spring.

Analyst:

Name: Li Shengfa

Email: sf.

phone

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