Notable Chinese LED Manufacturers Listed on OTC Market

Under the LED industry’s new restructure trend, statistics compiled by LEDinside found there has been at least 25 mergers in the Chinese market in 2014. Company leaders are greeting each other with “have you merged yet?” or “how is the acquisition negotiations going?” Companies that are missing out on the acquisitions have lost their excellent quality standard.

Chinese LED manufacturer LianTronics has announced restructure plans that it will be acquiring 100 percent of UTOP and ESDLumen shares by cash or issuance of stocks.

If the restructure is approved then ESDLumen will become the first company in the LED industry to move from the over-the-counter (OTC) market to becoming listed on the Emerging Stock Board. Below are other companies in the OTC market worth looking into.

ESDLumen is of course the first company to look into. After the company became listed on the OTC market on Jan. 24, 2014, the company’s stellar economic performance was also a factor to have attracted LianTronic investments. From 2012 to the first half of 2014, the company’s revenue was RMB 282 million, RMB 289 million and RMB 147 million respectively. Net profits from 2012 to 2014 were RMB 32.11 million, RMB 35.79 million and RMB 25.17 million.

There are nine other LED companies listed in China’s OTC market, whose revenue performance are worth evaluating. Manufacturers should choose which ones to acquire after surveying their revenue conditions.

Jiuzhou Optoelectronics Technology (Jiuzhou) has emerged as a heavy weight among the 10 LED package and lighting manufacturers listed on the OTC market. In the first half of 2014, Jiuzhou Optoelectronics revenue was up 45.96 percent YoY to RMB 252 million, while net loss was down 33.26 percent to RMB 27.11 million. Notably, Jiuzhou reached a breakthrough in niche lighting product sales, and successfully entered the weapon equipment field.

Gopro Light, which has a history of 20 years in China’s LED package industry, is one of the country’s earliest package manufacturers. The company’s product range currently includes LED package, LED backlight and lighting products. Gopro Light’s revenue during first half of 2014 was down 11.23 percent to 102 million, but net profits were up 3.39 percent to 10.68 million. Gross margin during the first half of 2014 rose 3.02 percent to 31.69 percent, as product technology matured and lowered product costs.

LC-LED, a Chinese manufacturer that specializes in surface-mount device (SMD), COB and high power light sources and products, reported revenues during first half of 2014 were up 49.68 percent to RMB 21.48 million, net profits also soared 190.41 percent to RMB 2.02 million. Although, the company manufacturers products are manufactured in small volumes, but its outlook remains upbeat with increases in revenue and profits.

Toplite’s revenue during first half of 2014 was up 3.51 percent to RMB 29.75 million, while net losses plunged 701.3 percent to RMB 926,600. Trend of falling product prices directly caused dropping profits, according to Toplite. Investors still should take to heart the revenues fell more than seven times.

Pengyuan Opto’s main revenue source is still from LED luminaires, and the company’s revenue during first half of 2014 was up 15.85 percent to 8.45 million, while net loss dropped 22.45 percent to about RMB 7 million. Pengyuan Opto explained losses mostly were related to local government construction projects and large enterprises energy efficiency upgrade bidding process, where a fund is set up for the project. The bidding process is usually open to public during the first half of the year, while actual sales are implemented in second half of 2014.

Lanxing Energy Saving Lighting is mainly focused on high power LED construction luminaires and special luminaires for boats. The company’s revenue reached RMB 23.46 million in first half of 2014, down RMB 2.73 million YoY, or 10.42 percent on a monthly basis. Net profits also plunged 82.28 percent YoY by RMB 530,400. The company is in a bad situation of growing revenues but not profits. “The company will acquire a leading position in the market through continual technological innovation, and cost control to become a leader in ship lighting,” said Lanxing Energy Saving Lighting.

Ike Lighting, a Chinese LED manufacturer that specializes in indoor lighting and commercial lighting reported revenue during first half of 2014 dropped 17.11 percent YoY to RMB 10.90 million. Net losses plunged 472.49 percent to RMB 231,400. Despite the huge losses, Ike Lighting stated “The company’s profits and losses have reached a balance point, and revenues will gradually soar with profits are slowly returning and steadily increasing.”

Chipshow, which similar to ESDLumen is involved in the display industry, reported revenues during first half of 2014 was up 11.69 percent YoY to 96.55 million, while net profits increased 13.41 percent YoY to RMB 5.17 million.

Yaham has been excluded from the list since it became a Hans Laser subsidiary. Hans Laser has a 51 percent stake in the company. Manufacturers can use the information above to make better acquisition decisions in the future. (Author: Amber Liu, Chief Editor, LEDinside Chinahttp:// Translator: Judy Lin, Chief Editor, LEDinside)

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