Expansion effect to be tested by the market Sanan Optoelectronics 4 billion Wuhu Phase II project stranded

It has been two years since Sanan Optoelectronics (600703) decided to raise 8 billion yuan for Wuhu Optoelectronics Industrialization (Phase II) project (hereinafter referred to as Wuhu Phase II) and Anhui Sanan Optoelectronic LED Application Product Industrialization Project. However, the reporter recently found that the second phase of the 4 billion yuan project of Sanan Optoelectronics has been quietly stranded.

According to industry insiders, the LED upstream industry in which Sanan Optoelectronics is located has shown signs of overcapacity. Enterprises and governments should be calm and rational and should not continue to expand.

There is no timetable for project construction

On March 15 this year, Sanan Optoelectronics issued an announcement and decided to terminate the company's public offering of A shares.

According to the announcement, due to changes in the market environment, in conjunction with the company's situation, the company and the sponsor institution Ping An Securities decided to terminate the company's public offering of A shares, and applied to the CSRC to withdraw the company's public offering of A shares. Application documents.

However, in the announcement, Sanan Optoelectronics did not mention the specific content of the additional issuance plan, and did not mention the fundraising plan investment project.

Recently, the reporter reviewed the Announcement of Sanan Optoelectronics in 2011 and found that the abortion plan that was blurred was a big article.

On May 6, 2011, Sanan Optoelectronics announced that it will publicly issue no more than 210 million A shares. The total amount of funds raised will not exceed 8 billion yuan (including the issuance expenses), all of which will be used for the industrialization of Wuhu Optoelectronics in Anhui Sanan Optoelectronics Co., Ltd. (Phase II) project and Anhui Sanan Optoelectronics Co., Ltd. LED application product industrialization project, the total investment of the two projects is about 9.125 billion yuan. The second phase of Wuhu is 5 billion yuan.

Three months later, Sanan Optoelectronics re-issued that according to the feedback from the securities regulatory authorities, the amount of the above-mentioned additional is reduced to a total of no more than 6.3 billion yuan, and the funds raised to be invested in Wuhu Phase II have also shrunk to 4 billion yuan.

Despite this, the issuance programme has not yet made substantial progress.

Wang Qing, director of Sanan Optoelectronics, said in an interview that the long-term issuance cycle and the downturn in the financing market are the main reasons for the company to abandon the additional issuance. The company is considering other financing channels, but there is no final conclusion. No timetable.

In today's increasingly fierce competition in the industry, Sanan Optoelectronics has given up the two-year expansion plan that has not caused much concern, which may be related to the "ingenious handling" of the announcement. In this regard, a lawyer who did not want to be named believes that Sanan Optoelectronics is not a violation of this regulation, but it is reasonable to explain the handling of these two projects.

The expansion effect is yet to be tested by the market

Compared with two years ago, the LED upstream industry in Sanan Optoelectronics is becoming more and more surplus.

Some insiders speculated that Sanan Optoelectronics took the initiative to abandon the issuance of funds and slow down the launch of new projects. Perhaps there are considerations in this regard.

However, Wang Qing denied the above speculation in the interview. He said that there is still a lot of room in the market. However, the impact of the stranding of the second phase of Wuhu on the company will not be positive. Wang Qing did not give a positive response, saying that the company's performance will be reflected in the financial report.

According to Sanan Optoelectronics' 2012 annual report, the company achieved revenue of 3.363 billion yuan in 2012, a year-on-year increase of 92%; net profit of 810 million yuan, down 13% from the previous year. In addition, its main business LED gross margin was 25%, down 14% year-on-year.

According to its annual report, MOCVD equipment purchased by Anhui Sanan Optoelectronics Co., Ltd. Wuhu Photoelectric Industrialization (Phase I) project (hereinafter referred to as Wuhu Phase I) has been put into production. Although it has obtained certain economic benefits, most of the equipment was in 2012. Gradually put into production, it still needs a process to reach full production. When the production capacity is completely released, the scale effect will be fully exerted, and the company's performance will be gradually reflected. In the first quarter of this year, Sanan Optoelectronics' net profit decreased by 18.77% year-on-year.

According to industry insiders, Sanan Optoelectronics has considerable strength in the field of domestic LED epitaxial wafers, but the current overcapacity appears, blindly expanding the risk of hidden danger.

The aforementioned industry insiders said that the production capacity gradually released from the first phase of Wuhu will further increase the performance of Sanan Optoelectronics in the future. After the taste of sweetness, Sanan Optoelectronics's desire for the second phase of Wuhu is also reasonable.

(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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