LED5 "quasi-reorganization" company in 2013

Overwintering, surplus, and reshuffle have become key words in the current LED industry. In 2012, the LED industry did not expect a complete recovery as expected, and it was still struggling to make ends meet. "Funding problems" plague many LED companies. In 2013, will the LED industry “spring blossom” and the industry accelerate “integration”?

Maoshuo Power: The market downturn led to lower than expected results

Maoshuo Power released the third quarterly report for 2012. In the third quarter, the company achieved a total operating income of 133 million yuan, a year-on-year decrease of 4.54%, and a net profit attributable to shareholders of the listed company was 8.21 million yuan, a decrease of 39.67% year-on-year;

In the first three quarters, the total operating income was 373 million yuan, a year-on-year decrease of 12.92%, and the net profit attributable to shareholders of the listed company was 37.82 million yuan. The company estimates that the net profit attributable to shareholders of the listed company for 2012 was 4835-6447 million yuan.

Event Comment

As the economic environment at home and abroad has continued to slump, the electronics industry as a whole has not been prosperous during the peak season in the third quarter of this year, which has caused the company's consumer electronics power business to suffer a major adverse impact. This is the main reason for the decline in the company's performance during the reporting period. The profit contribution rate of the company's LED driver power business is expected to increase further, which will help improve the company's overall business profitability.

The company today launched the equity incentive plan (Amendment). According to the conditions for unlocking the incentive objects, the average annual growth rate of the company's net profit in the next three years should be above 20%. Analysts believe that the implementation of the equity incentive plan will help improve the corporate governance structure, help the company's sustainable development, and help increase the certainty of the company's rapid growth in the future.

Due to the downturn in the downstream market and the lack of signs of improvement in the short term, analysts downgraded the company’s earnings forecast. As the leading manufacturer of LED street lamp driving power in China, the company will benefit from long-term energy saving and emission reduction at home and abroad, and vigorously promote the main development trend of green lighting. Analysts expect the company's EPS to be 0.56 yuan and 0.75 in 2012, 2013 and 2014 respectively. Yuan, 0.99 yuan, the corresponding PE were 29.21 times, 21.7 times, 16.45 times respectively, and maintained the "recommended" rating.

Hongli Optoelectronics: steady growth, stable gross profit margins:

On October 23, 2012, Hongli Optoelectronic announced the third quarter of 2012. The report shows that the company achieved operating income of 397.78 million yuan in the first three quarters of 2012, a decrease of 1.70% from the same period of the previous year, and the net profit attributable to the shareholders of the parent company was 45.24 million yuan, a decrease of 11.58% from the previous year. In the third quarter of 2012, the company achieved operating income of 1,385.54 million yuan, up 6.68% from the same period of the previous year, and realized a net profit attributable to shareholders of the parent company of 13.96 million yuan, a decrease of 0.14% over the previous year.

Comments:

The growth rate of income and profit was stable. Affected by industry factors, there was also the impact of the company's own delivery room and other relocations. In the first three quarters of 2012, the company’s revenue growth remained stable, with revenue falling 1.70% year-on-year and net profit falling 11.58% year-on-year. In addition to industry factors, the company relocated to the new industrial park in July 2012. During the relocation process, due to weather, equipment installation, and debugging, the release of LED packaging capacity was affected. These factors resulted in a certain reduction in operating income and net profit of the company in the first three quarters of 2012 compared to the same period of last year.

Gross profit margin dropped slightly, but basically remained at a high level. The company's 2012Q3 gross profit margin decreased by 0.07 percentage points year-on-year, a decrease of 2.12 percentage points from the previous quarter. After the listing of several companies in the LED packaging industry, significant capacity expansions have taken place. Therefore, analysts expect the downward pressure on prices to remain.

Various policy incentives and LED lighting requirements are gradually approaching. On February 27, 2012, the Department of Economic Development of the Ministry of Finance, the Department of Resource Conservation and Environmental Protection of the National Development and Reform Commission, and the Department of High-tech Development and Industrialization of the Ministry of Science and Technology released two tenders for the promotion of financial subsidies for semiconductor lighting products in 2012. The bidding content covered indoor LED lighting products and outdoor LED lighting products. The Ministry of Industry and Information Technology promulgated the “12th Five-Year Plan for Electronic Information Industry” and also explicitly proposed the promotion of LED and energy-saving lighting products. Analysts expect that most tenders will be won by domestic manufacturers and have a positive impact on domestic manufacturers.

On May 28, 2012, the Guangdong Provincial Government issued the "Guangdong Province Implementation Plan for Promoting the Use of LED Lighting Products." Starting from the implementation date of the project, lighting projects in the province's roads, public places, government agencies, state-owned enterprises and public finances or state-owned capital investment projects, and new districts such as Nansha, Qianhai and Hengqin, will all use LED lighting products. , The original non-LED lighting product transformation work, the Pearl River Delta region will strive to by the end of 2013, the east and west areas were completed in batches before the end of 2014. To achieve lighting energy saving over 50% of the province's total caliber, pulling the LED industry at the end of the "12th Five-Year Plan" to achieve an annual output value of 500 billion yuan. The program requires that the LED lamps used in all projects must be recommended catalog products of LED benchmarking system in Guangdong Province. At the same time, the adoption of the EMC model is encouraged.

With the decrease of chip cost and the encouragement of domestic and foreign policies, LED lighting is gradually started up in a silent manner. Among them, the Guangdong market is at the forefront of the domestic market, and it is more favorable for the provincial companies such as Hongli Optoelectronics.

Earnings forecast and investment rating. Analysts expect the 2012-2013 EPS to be 0.30 yuan and 0.40 yuan. According to the closing price of 7.18 yuan on October 23, 2012, the dynamic PE corresponding to the next two years will be 24× and 18× respectively. The company is a company with excellent qualification in the LED packaging sector. If the lighting starts, the company will benefit significantly. Analysts gave the company an "overweight" rating and set a target price of 8.27 yuan, corresponding to 28 times PE in 2012.

Sanan Optoelectronics: Laying the company’s leading position on the basis of technological upgrading

The LED upstream epitaxial chip segment is still an industry and capital-intensive industry link. The company has increased capital and fixed assets through refinancing and government subsidy, which has reached a scale effect. At present, the company's MOCVD equipment reaches more than 140 units, and the number has reached the international level. However, there is still a large gap in technology. In 2011, the company quickly increased the company's key technologies in MOCVD through overseas R&D investment and the introduction of large quantities of talents, especially luminous efficiency (above 140 lm/w), reliability, and yield ( 70%) has been greatly improved, and it has reached the leading domestic and international level, laying a good foundation for the company's product application and customer scope expansion.

The industrial chain integration technology scale advantage stabilizes the domestic leading position. The Sanan Optoelectronics industrial chain has extended from epitaxial chips to sapphire, down to the packaging stage and directly into the application and engineering fields. The overall advantages of the industrial chain ensure the stability of the company's sapphire supply and LED chip shipping channels; chip types from the original landscape decoration, display and other fields have been extended to LED street lamps, LED general lighting, large-size backlight, automotive lighting, The expansion of the company's chip application area has opened up a broader market space, combined with the company's domestic first-scale advantages of its core MOCVD equipment, which has consolidated the company's leading position in the country.

The growth momentum of the company in 2012-2014 mainly comes from the increase in the company's yield, the increase in equipment utilization and the increase in the number of equipment. With the increase in the yield rate of a single device, with the company's technological R&D investment and the introduction of a large number of high-end talents, the company's yield rate is expected to increase by at least 10-15%; as the company’s technology improves steadily, the operating rate of equipment can also be significantly increased, with minimum 30% to 40% of the points were increased to 80% to 90%; in addition, the company plans to invest in the equipment of the second phase of Wuhu. It is expected that there will be more than 100 MOCVD equipment investment in the future, and the investment in new equipment is expected to increase the company’s production capacity, or for the company’s One of the main drivers of revenue growth.

Finance and valuation

Analysts expect the 2012-2014 earnings per share to be 0.74, 0.97, and 1.12, respectively. Analysts have adopted a relative valuation method. The comparable company’s 2012 average annual PE is 24.14 times, because the company is in a leading position and the profit structure of the company is developing positively. . Analysts gave a certain premium, giving the company a PE valuation of 28 times in 2012, corresponding to a target price of 20.72 yuan/share, giving the company a Buy rating for the first time.

Sunshine Lighting: Energy-saving lamp faucet entering the LED lighting industry

The LED industry has shown a rapid growth in the structural oversupply, and downstream applications have benefited more. The rapid growth of production capacity in the upstream segment of the LED industry has resulted in serious oversupply and a sharp drop in prices, which has driven the continued decline in the production costs of downstream LED application products, driving the continuous increase in market penetration and penetration rate.

Better energy-saving effect Once the penetration rate of LED lighting products rises rapidly, it will erode the energy-saving lamp market space. By comparison, the economy of energy-saving lamps is the best, followed by LEDs. From the perspective of energy-saving effect, the cost of electricity for LED is better, which is about 75% of the cost of energy-saving lamps. Analysts believe that once the technology of LED lamps continues to advance and the cost declines rapidly, the popularity of LED lamps will grow rapidly, the relative advantages of energy-saving lamps will no longer exist, and their market space will continue to be eroded.

The proportion of lighting business increased by 30% year-on-year, and the business structure adjustment showed results. In the middle of the 12th year, the revenue from the two businesses of energy-saving lamps and lamps accounted for 66% and 32%, respectively. The proportion of lighting products with better profitability increased by 30% year-on-year, and the effectiveness of the company's business structure adjustment began to show.