The LED sector once made the market crazy, and now the good days of these companies may have come to an end.
Relevant data show that the plate's increase reached 20% from the end of January to the end of February, but as of yesterday, the LED sector index basically "where to go back and forth."
The decline of leading companies is particularly heavy. Sanan Optoelectronics' stock price started from the highest price of 50.89 yuan/share on March 14th, and closed at 39.28 yuan/share on May 4, with a drop of 22.81%; Lehman Optoelectronics fell from 44.23 yuan/share to 26.74 yuan/share, the decline 39.54%; National Star Optoelectronics from the highest price of 43.09 yuan / share in February, fell to 26.68 yuan / share on May 3, the range fell as high as 38.08%.
Hidden behind the violent decline is the market's concerns about the profitability and performance risks of the LED industry. A quarterly report showed that the growth rate of the LED sector slowed down, and many LED companies even experienced a decline in performance. For example, the net profit of Guoxing Optoelectronics in the first quarter was 25.51 million yuan, down 20.42% year-on-year; Lehman Optoelectronics' net profit attributable to shareholders of listed companies in the first quarter was 5.268 million yuan, down 38.23% year-on-year.
"Because of the large-scale expansion in the past period of time, and the demand market of the terminal has not yet started, resulting in structural overcapacity of LED production capacity, but also caused a large gap between corporate profitability and market expectations." Warburg Securities analyst Chen Liang pointed out.
Industry triple worry
With the help of hot money and institutions, the rising journey of LED concept stocks spans two years.
At the beginning of 2009, the prices of related concept stocks such as Sanan Optoelectronics, Silan Micro and Dehao Runda were still below 10 yuan. The launch of the “Ten Cities and Ten Thousand Miles†project led by the Ministry of Science and Technology blew the rising horn of the industry. Under the guidance of the concepts of “energy saving and emission reduction†and “low carbon economyâ€, LED concept stocks skyrocketed. By the beginning of 2011, the above-mentioned company's share price has doubled, and the price-earnings ratio has also risen. The price-earnings ratio of Sanan Optoelectronics is more than 100 times.
But "the ideal is very full, the reality is very skinny." The capital market is hotly sought after and cannot replace the real market demand.
The original "Ten Cities and Ten Thousand Miles" project was launched less than a year ago. It has been frequently hitting nails in various places. The products are overpriced and the qualification rate is not up to standard. The LED lighting industry is in its infancy. A layer of shadow.
Quite surprisingly, although the marketing is not satisfactory, the net profit of listed companies has not been affected by this.
“High government subsidies have become the biggest source of profits for the LED industry. With Sanan Optoelectronics and Dehao Runda as the representatives, the government’s subsidies have almost occupied half of the profits of enterprises, and they have also created a false prosperity in the LED industry. "An electrical and electronic component analyst at a brokerage in the north pointed out.
According to its quarterly report, Sanan Optoelectronics has a government subsidy of RMB 130 million for the current profit and loss, accounting for 78.55% of the company's net profit for the same period; Guoxing Optoelectronics has a government subsidy of RMB 1.24 million for the current profit and loss, accounting for the same period of net profit. 23.54%, while Dehao Runda's government subsidies for the current profit and loss amounted to 133 million yuan, much higher than the company's net profit of 65.413 million yuan during the reporting period.
High and stable government subsidies have brought stable performance statements to enterprises, which has further stimulated the company's impulse to expand production. One example is that MOCVD, the core production facility for LED epitaxial wafers and chips, is the basic equipment for the entire industry chain. In 2010 alone, there were more than 730 new MOCVDs in the world, more than double the number of 310 in 2009. Chinese companies contributed most of their ordering needs.
In addition, various LED companies are actively raising funds to expand production capacity. On April 13 this year, Sanan Optoelectronics threw out an additional issuance plan, with a planned financing of no more than 8 billion yuan. The funds raised are intended to be used in the second phase of Wuhu Optoelectronics Industrialization and LED application packaging. Prior to this, Sanan Optoelectronics, which had been listed for less than three years, had completed two additional issuances, raising funds of 819 million yuan and 3.03 billion yuan respectively. Prior to 2010, Silan Micro and Dehao Runda also threw separately. The additional financing plan of 600 million yuan and 1.5 billion yuan has been approved by the audit committee.
Although the production capacity is expanding, the profit margin of the company has not increased significantly. According to Cheng Bing, an analyst at Guojin Securities, the patent for epitaxial wafers and chips in the upstream of LED is monopolized by European, Japanese and American companies. The packaging of the midstream is squeezed by Taiwanese and Korean companies, and only in the downstream application. Only those enterprises with government support and localization advantages can gain development space.
Behind the technology of high profits subsidies, over-expansion of capacity and subject-mattering, the beauty bubble of the LED industry seems to be ruining.
Waiting for full demand to start
“The market expects the industry to double its growth rate, and the actual growth is only about 30%.†Chen Liang said bluntly.
Zhu Zhiyong, an analyst at Aijian Securities, said that the market is worried that if the mature market of LEDs cannot be started around 2012 as expected by the organization, enterprises that are leading the industry will have to bear the risk of expansion.
In addition, the Yangzhou Municipal Government has clearly stated that it will suspend the approval of new MOCVD equipment in July 2011 and stop the purchase subsidy of up to 10 million yuan for each MOCVD equipment to control the increasing LED production capacity.
In the areas of LED production capacity such as Jiangmen in Guangdong and Wuhu in Anhui, the government's deadline for subsidies of up to 10 million for each MOCVD equipment is approaching. Under the government's plan to delay subsidies, the domestic MOVCD procurement boom may come to an abrupt end.
However, there are still optimistic people.
Industrial Securities analyst Liu Liang pointed out in an industry analysis report that with the release of new MOCVD equipment capacity in 2010, the structural supply and demand imbalance of LED chips is expected to reduce downstream application costs, thus promoting LED lighting applications at the end of 2011. Launched in early 2012. For investors, once the real market is launched, the good days of LED will undoubtedly come back.
"We are still optimistic about the LED industry for a long time, because the general trend of energy saving and emission reduction is no problem." Hua Bao Securities analyst Chen Liangru said that the overall decline in recent times may be regarded as the concept of LED being squandered by hot money. After the high value return journey.
However, for how long this adjustment time will last, Chen Liang said that “it will last for a whileâ€.
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