Neo-Neon LED market bleak six months loss of HK $ 102 million

Neo-Neon (01868.HK) to loss of semi-annual report (2011 April 1 to September 30) to reflect the dismal state of the LED lighting market at home and abroad. Yesterday, the really bright half 2011 financial results release, as of September 30, really bright in the first half revenue of HK $ 788 million, an increase of 7.9%, loss of 102 million Hong Kong ...

More LED-related content, please visit: www.bgocled.comNeo-Neon (01868.HK) to loss of semi-annual report (2011 April 1 to September 30) to reflect the dismal state of the LED lighting market at home and abroad.
Yesterday, the really bright half 2011 financial results release, as of September 30, really bright in the first half revenue of HK $ 788 million, an increase of 7.9%, a loss of HK $ 102 million. Neo-Neon in the earnings report, said the economic environment deteriorated, leading to customer limit orders generally shrink. The LED over domestic investment, leading to an oversupply of LED production capacity significantly, the rapid decline in market prices.
Reported a first half revenue growth of Neo-Neon completely from the beginning of the acquisition of overseas companies HCI, HCI overseas companies contributed HK $ 219 million in revenue. If the income of foreign companies to remove HCI, really bright in the first half revenue was only HK $ 569 million, down 22.1%.
Neo-Neon Chairman Ben FAN that economic weakness in Europe and America, a direct result of customer orders decline. The company has passed to raise the market share of Chinese and European markets offset the impact of the recession, the Chinese market is expected to become a major source of profit.
LED industry, serious overcapacity, so that really bright and rapid decline in gross margin. Reported a gross profit margin of Neo-Neon products from 33.1% last year, quickly fell to 13.7%, down nearly 20 percentage points.
Neon said soaring raw material prices, labor costs and appreciation of the renminbi, resulting in decreased product gross margin, and the company expanded to the upstream LED epitaxial film business, making a substantial increase in cost of equipment depreciation. It is reported that the current Neo-Neon has 19 sets of MOCVD equipment (LED wafer production equipment) operation, the monthly production capacity of 55,000 LED epitaxial wafers.
Many LED companies expect out incandescent Development and Reform Commission announced roadmap and LED lighting products yet to start two messages of government subsidies. However, a high-level LED lighting that now the family is basically using fluorescent, little more than a 60 watt incandescent, so figure out incandescent lighting to promote the development of LED, the LED market is expected illusory. The LED lighting products in government subsidies has not exactly news, even if implemented, may be little benefit of the LED business.
In fact, riding a tiger, all involved in upstream LED enterprises face the embarrassing situation.
Neo-Neon LED upstream of the first half because of investment, and access to domestic subsidies to 43.1 million yuan of local government. Yesterday, German Runda (002005.SZ) has announced, through a wholly owned subsidiary of BDO International, Yangzhou Runda BDO Runda increase $ 35 million capital increase of Yangzhou BDO Runda registered capital of 7,500 million.
"Local government subsidies, with the LED in place of the enterprise issued by MOCVD equipment, LED companies to honor their commitments and access to local municipal lighting orders, usually bite the bullet." One of the LED industry analysts pointed out that this will only lead to LED overcapacity situation worse. Because, once the MOCVD equipment production, taking into account the cut-off of losses, we will not stop.