LED lighting demand release Sanan Optoelectronics received a large order of 500 million yuan from Zhaochi

On June 18, Sanan Optoelectronics (600703) issued a major contract announcement stating that its wholly-owned subsidiary Anhui Sanan Optoelectronics Co., Ltd. (hereinafter referred to as “Anhui Sanan”) was wholly-owned with Zhaochi Co., Ltd. (002429) on July 17. Subsidiary Shenzhen Zhaochi Energy Saving Lighting Co., Ltd. (hereinafter referred to as “Shenzhen Zhaochi”) signed the “Strategic Procurement Framework Agreement”, which stipulates that Shenzhen Zhaochi will purchase from Sanan, Anhui within the next year from the date of signing the agreement. 100 million yuan of LED chips, this amount accounts for about 15% of Sanan Optoelectronics' revenue of 3.363 billion in 2012.

Significant signs of industry recovery

The person in charge of Sanan Optoelectronics said that the LED market has started to improve this year, especially since the second quarter began to have strong demand. In addition to several research and development equipment, the company currently has more than 130 MOCVD equipment in production.

“There are indications that the LED industry, which was still in the cold winter last year, has obviously recovered this year,” said the person in charge. The price has continued to fall in the past few years, laying the foundation for a significant increase in the penetration rate of the lighting industry. He is very optimistic about the market outlook for the second half of the year and next year. "I think the industry has warmed up and it may last for several years."

For the price of the chip, the person in charge said that since the price dropped in March, the price of the chip has been relatively stable, but the industry's recovery will not lead to the rise in chip prices, the person in charge expressed caution, "chip prices rose for LED lighting A warmer market is not necessarily a good thing."

The person in charge said that Shenzhen Zhaochi is one of the dominant enterprises in the domestic LED packaging industry. The signing of this strategic cooperation agreement marks that the company has become the main supplier of Shenzhen Zhaochi LED chips.

Sanan Optoelectronics Investment Plus

Interestingly, the industry's recovery has once again ignited the investment impulse of Sanan Optoelectronics. The company’s additional issuance plan, which was just abandoned in March, was introduced again two months later. On May 28, the company announced that it will not issue more than 208.6 million shares at a price of not less than 15.82 yuan per share. The total amount of funds raised is not more than 3.3 billion yuan, of which no more than 2.8 billion yuan will be invested in Wuhu Optoelectronics Industrialization. (Two phase project.

The announcement shows that the Wuhu Optoelectronics Industrialization (Phase II) project will expand the production scale of blue and green light chips on the basis of the first phase of the project. The construction period of the project is 12 months. After the project is completed, the company will realize an annual output of 1.223 million pieces of LED epitaxial wafers (calculated by 4-inch epitaxial wafers) and 25.514 billion blue and green chips.

In terms of Zhaochi shares, this year, with the release of downstream LED lighting demand and the gradual shift of TV backlights to domestic purchases, the revenue of LED business of Zhaochi has ushered in rapid growth. According to the 2013 target set by the management of Zhaochi, the company will become one of the top five LED companies in China in the next 3-5 years.

Analysts said that the cooperation between Zhaochi and Sanan Optoelectronics is conducive to giving full play to their respective resource advantages, and the 500 million big orders also indicate that the management of Zhaochi has full confidence in the development of the company's LED business.

(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)

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