Huacan Optoelectronics passed the "Proposal on Establishing a wholly-owned Subsidiary and Partially Changed Investment Project" on September 11th, and decided to invest 1.8 billion yuan to establish an LED production base in Suzhou. Market participants have interpreted the company's large-scale investment in the current LED market downturn, and the description of the company's related "feasibility report" is not the same. Some analysts believe that this may be related to the different support policies of the two places.
1.8 billion investment super company net assets
Huacan Optoelectronics Co., Ltd. indicated that the company decided to change the fundraising investment project and set up Huacan Optoelectronics (Suzhou) Co., Ltd. with 300 million yuan of funds raised. According to the “Feasibility Analysis on Establishing a wholly-owned subsidiary and partially changing the fundraising projectâ€, the company plans to invest 1.806 billion yuan to establish a production base. The main business of the subsidiary is consistent with the listed company, and the project investment direction and the original IPO of the listed company are raised. The fund investment project "the third phase of LED epitaxial chip construction project" is consistent.
The project is planned to build an LED blue-green light epitaxy and chip production base with a construction area of ​​approximately 92,360 square meters in the Zhangjiagang Economic and Technological Development Zone of Jiangsu Province. It is planned to complete the infrastructure construction within three years to realize equipment installation and officially put into production. After the project is completed, the company will add a total of 1995 KK/month of blue and green light chip capacity to the company, equivalent to 3 million epitaxial wafers of 35,000 pieces/month.
As of the first half of 2012, Huacan Optoelectronics had total assets of 1.885 billion and net assets of 1.656 billion. The total investment planned for the Suzhou project is as high as 1.806 billion yuan, which is already higher than the company's net assets.
It is worth noting that the company has been in Wuhan for seven years. As of the first half of this year, the fixed assets in Wuhan were 660 million yuan. Counting IPO fundraising projects, the construction in progress is 290 million yuan. The total investment of the company's IPO fundraising project “The third phase of LED epitaxial chip construction project†is planned to be 1.398 billion yuan. The company was listed on June 1 this year. It has just raised 923 million yuan. Why did it get a lot of money when it got the money, and it did not hesitate to withdraw IPO project funds?
Foreign investment or too thin due to local subsidies
At the 11th shareholders' meeting, investors and the media questioned why the company would expand its production capacity so much in the current LED market downturn, and why Suzhou was chosen instead of Wuhan. Zhou Fuyun, chairman of the company, said that the company's current production capacity is equivalent to more than 70,000 chips/month of 2 inch epitaxial wafers, and the actual sales capacity has reached 200,000. Even if the IPO fundraising project reaches the production capacity, the new epitaxial wafer production capacity is 104,400 pieces/month. There is still a lot of room for improvement.
In the "feasibility report", the company mentioned that the reasons for investing in the Suzhou project include: promoting the localization of LED chips for semiconductor lighting, saving production and market costs, diversifying the company's operational risks, and attracting multiple talents.
However, market participants said that the above reasons do exist, but the core may be factors such as policy advantages and local government support. Among them, the most direct and biggest impact on the LED industry is financial subsidies.
Taking Sanan Optoelectronics, which has the same layout of LED chips, as an example, the financial subsidies received by the company in 2011, 2010 and 2009 were 800 million yuan, 250 million yuan and 47.64 million yuan respectively. The total profit of Sanan Optoelectronics in 2011 was 1.37 billion yuan, and government subsidies accounted for 58%. In 2012, the company has received three government subsidies for the announcement, which are 12.15 million yuan, 60 million yuan, and 100 million yuan respectively.
The financial subsidies of Huacan Optoelectronics in 2009, 2010 and 2011 were respectively 2,754,500 yuan, 4,741,100 yuan and 9,943,900 yuan, which is dwarfed by Sanan Optoelectronics. So far this year, the company has not announced that it has received financial subsidies.
The insider told reporters that as far as Huacan Optoelectronics is concerned, some of the local authorities in Wuhan have not fulfilled certain promises to the company, even if they have made a red-headed document. Market participants said that it is not clear what promise Suzhou has made to Huacan Optoelectronics. However, the important projects related to Sanan Optoelectronics LED were settled in Anhui, and they received considerable local policy support.
1.8 billion investment super company net assets
Huacan Optoelectronics Co., Ltd. indicated that the company decided to change the fundraising investment project and set up Huacan Optoelectronics (Suzhou) Co., Ltd. with 300 million yuan of funds raised. According to the “Feasibility Analysis on Establishing a wholly-owned subsidiary and partially changing the fundraising projectâ€, the company plans to invest 1.806 billion yuan to establish a production base. The main business of the subsidiary is consistent with the listed company, and the project investment direction and the original IPO of the listed company are raised. The fund investment project "the third phase of LED epitaxial chip construction project" is consistent.
The project is planned to build an LED blue-green light epitaxy and chip production base with a construction area of ​​approximately 92,360 square meters in the Zhangjiagang Economic and Technological Development Zone of Jiangsu Province. It is planned to complete the infrastructure construction within three years to realize equipment installation and officially put into production. After the project is completed, the company will add a total of 1995 KK/month of blue and green light chip capacity to the company, equivalent to 3 million epitaxial wafers of 35,000 pieces/month.
As of the first half of 2012, Huacan Optoelectronics had total assets of 1.885 billion and net assets of 1.656 billion. The total investment planned for the Suzhou project is as high as 1.806 billion yuan, which is already higher than the company's net assets.
It is worth noting that the company has been in Wuhan for seven years. As of the first half of this year, the fixed assets in Wuhan were 660 million yuan. Counting IPO fundraising projects, the construction in progress is 290 million yuan. The total investment of the company's IPO fundraising project “The third phase of LED epitaxial chip construction project†is planned to be 1.398 billion yuan. The company was listed on June 1 this year. It has just raised 923 million yuan. Why did it get a lot of money when it got the money, and it did not hesitate to withdraw IPO project funds?
Foreign investment or too thin due to local subsidies
At the 11th shareholders' meeting, investors and the media questioned why the company would expand its production capacity so much in the current LED market downturn, and why Suzhou was chosen instead of Wuhan. Zhou Fuyun, chairman of the company, said that the company's current production capacity is equivalent to more than 70,000 chips/month of 2 inch epitaxial wafers, and the actual sales capacity has reached 200,000. Even if the IPO fundraising project reaches the production capacity, the new epitaxial wafer production capacity is 104,400 pieces/month. There is still a lot of room for improvement.
In the "feasibility report", the company mentioned that the reasons for investing in the Suzhou project include: promoting the localization of LED chips for semiconductor lighting, saving production and market costs, diversifying the company's operational risks, and attracting multiple talents.
However, market participants said that the above reasons do exist, but the core may be factors such as policy advantages and local government support. Among them, the most direct and biggest impact on the LED industry is financial subsidies.
Taking Sanan Optoelectronics, which has the same layout of LED chips, as an example, the financial subsidies received by the company in 2011, 2010 and 2009 were 800 million yuan, 250 million yuan and 47.64 million yuan respectively. The total profit of Sanan Optoelectronics in 2011 was 1.37 billion yuan, and government subsidies accounted for 58%. In 2012, the company has received three government subsidies for the announcement, which are 12.15 million yuan, 60 million yuan, and 100 million yuan respectively.
The financial subsidies of Huacan Optoelectronics in 2009, 2010 and 2011 were respectively 2,754,500 yuan, 4,741,100 yuan and 9,943,900 yuan, which is dwarfed by Sanan Optoelectronics. So far this year, the company has not announced that it has received financial subsidies.
The insider told reporters that as far as Huacan Optoelectronics is concerned, some of the local authorities in Wuhan have not fulfilled certain promises to the company, even if they have made a red-headed document. Market participants said that it is not clear what promise Suzhou has made to Huacan Optoelectronics. However, the important projects related to Sanan Optoelectronics LED were settled in Anhui, and they received considerable local policy support.
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