LED industry faces double pressure, Zhou Ming technology, high growth myth is difficult to reproduce
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As a supplier of LED application products and solutions, Chau Ming Technology's current products are mainly LED high-definition energy-saving full-color display and LED energy-saving lighting two series. In 2010, the company's operating income was 501 million yuan, of which LED display revenue accounted for more than 90%. From 2009 to 2010, the company's revenue growth rate is close to 50%, and the net profit growth rate has exceeded 80% for two consecutive years. It was once known as the high growth myth of the LED industry.
However, since the middle of this year, the performance growth of Chaon Ming Technology has begun to decline sharply. Zhouming Science and Technology News reported that the company's net profit for the first half of the year was 22.05 million yuan, a year-on-year increase of 0.50%. After deducting non-recurring gains and losses, the net profit was 18.43 million yuan, down 10.79% year-on-year; the third quarterly report showed that the company's third quarter net The profit was 13.1 million yuan, a year-on-year increase of 0.59%. In the first nine months, the company's net profit was 35.14 million yuan, a year-on-year increase of 0.53%. Compared with the net profit growth rate of more than 80% in the previous two years, the performance of Zhouming Technology in the first three quarters of this year has made it impossible to link with “high growth†anyway.
It is worth noting that the third-quarter earnings report of Zhouming Technology also showed that “the non-operating income during the reporting period increased by 665.87% compared with the same period of last year, which was mainly due to the receipt of government project subsidies and listing subsidies during the reporting periodâ€. Some financial analysts pointed out that although the third quarterly report of Chau Ming Technology did not show the specific figures of non-operating income in the third quarter, more than 600% of the increase had to attract investors' attention. If the non-operating income is excluded, the current revenue of Chau Ming Technology will be discounted, and its net profit and net profit growth rate will also be affected.
For the current performance, Zhouming Technology’s third-quarter earnings report stated that during the reporting period, “operating costs increased by 16.24% compared with the same period of the previous yearâ€, “business tax and surcharges increased by 20.77% compared with the same period of the previous yearâ€, and “sales expenses were higher than the same period of the previous year. The growth rate was 42.21%" and "administrative expenses increased by 32.66% compared with the same period of last year." In response, the above financial analysts believe that the significant growth of the above financial projects has a certain impact on the net profit growth of Chau Ming Technology. “The financial report shows that the company’s operating income in the third quarter was 153.56 million yuan, a year-on-year increase of 31.68%. This is a good data. However, after eliminating these huge financial expenses, its net profit was only 13.1 million yuan, a year-on-year increase of less than 1%. It is really unacceptable to the outside world," said the financial analyst.
Insiders pointed out that at present, among the listed companies, the main business of LED products production and sales are Sanan Optoelectronics, Ganzhao Optoelectronics, Hongli Optoelectronics, Dehao Runda and many other companies. Ming Technology does not have a dominant position in the current industry competition. In terms of operating income, in 2010, Chau Ming Technology's operating income was 501 million yuan, while Sanan Optoelectronics' operating income in 2010 reached 862 million yuan, and the financial indicators such as revenue and net profit growth in the same period of this year were better than Zhou Ming Technology. From the perspective of gross profit margin, Zhouming Technology's 2010 financial report and the first three quarters of 2011 reported that the company's gross profit margin remained at around 25%, while the same industry's Alto Electronics' gross profit margin remained at around 45%. In contrast, Chau Ming Technology does not have an absolute advantage.
In this regard, a securities analyst said that there are many enterprises in the LED industry. Compared with other companies in the industry, Chau Ming Technology does not have an absolute advantage in terms of volume and profit level, plus the current market environment and the entire LED. With the increasingly fierce competition in the industry, it is difficult for Zhouming Technology to maintain its previous high growth myth.
In addition, the above-mentioned insiders also introduced that due to the soaring prices of raw materials and rising labor costs, the cost of LED industry has increased by nearly 30% year-on-year. The profit margin of many domestic LED manufacturers has approached the critical point. Coupled with the low positioning of some LED manufacturers, the homogenization is serious and the market competition is extremely fierce. This means that the future growth of the LED industry is not bright, and in this context, whether Zhou Ming Technology can continue to maintain rapid growth in performance will also be a huge question mark. 
