"Behind the NVC infighting: Elec-Tech is suffering from a subsidy dependency syndrome"

In the "radar and bucket Hutch" turned upside down when the storm in the first half of the major shareholder of BDO Runda performance and management ability will undoubtedly become the focus of concern.

Results showed that the first half of 2014, China achieved total revenue of 1 billion 935 million yuan, although an increase of 42.98%, but net profit attributable to shareholders of listed companies 32 million 810 thousand yuan, down 35.03%, net profit after deducting non recurring gains and losses is -1796.44 million yuan, down 546.91% yoy.

It is worth noting that the semi annual report, included in the current profit and loss of government subsidies up to 64 million 430 thousand and 800 yuan. This means that if there is no part of the government subsidies, the loss in the first half will be more embarrassing situation.

Since 2009, the Chinese government to increase efforts to support the LED industry, a series of financial subsidies came into being, triggering a stampede of capital. Under this background, Elec-Tech ended a single small household appliance business model, the transition to the LED industry began marching. Nearly six years of financial data reporter statistics found that since 2009, government subsidies included in the final statement of the Elec-Tech accumulated up to 1 billion 108 million yuan, the cumulative net profit over the same period was only 856 million yuan, net profit of government subsidies than a full 250 million. Thus, the government grants whitewash the 1 billion 100 million BDO performance, become the turnaround magic weapon of choice. The serious "subsidy dependency" can peep.

In fact, the "radar love" from the original congenial to rapid evolution, a life-and-death struggle torn bucket, but only 19 months. Wu Changjiang had to sell shares, Wang Donglei scored a gambler NVC beyond all expectations, said Wu Changjiang, with the same gamble of Wang Donglei ally, this from the outset is destined to be a bigger gamble. The key is to win, Wang Donglei can let NVC in accordance with the original plan Elec-Tech and achieve effective integration in the LED industry chain. However, in the "Ray drama of the moment, want to break the sea Elec-Tech Jixun operating difficulties, still seems a long way to go.

Six years subsidy of 1 billion 100 million

The day before, Elec-Tech released the first half of 2014 report. The first half of this year, China achieved operating income of 1 billion 935 million yuan, an increase of 42.98%. However, despite the high revenue growth, but de Ho Runda's profitability is intriguing. During the reporting period, net profit attributable to shareholders of listed companies 38 million 702 thousand and 500 yuan, down by 23.36%.

In accordance with the accounting algorithm, attributable to shareholders of listed companies net profit = net profit after deducting non recurring gains and losses, and non recurring gains and losses, including non current assets disposal gains and losses, included in the current profit or loss of government subsidies, etc.. Therefore, if the net profit is positive, while the net profit after deducting non negative, and the net profit after deduction of non net profit or loss of the current amount of government subsidies is correct, then the government subsidy is its reliance on profitability". Interestingly, the first half of the profit or loss of government subsidies income up to 64 million 430 thousand and 800 yuan. In other words, if it is not government subsidies, the first half of the loss will reach 25 million 728 thousand and 300 yuan.

Nearly six years of financial data reporter found out, from 2009 to the first half of this year, the amount of government subsidies included in the current profits and losses were 8 million 100 thousand and 300, 269 million 560 thousand and 400, 310 million 264 thousand and 400, 224 million 223 thousand and 900, 232 million 3 thousand and 900 and 64 million 430 thousand and 800, total government subsidies to be included in the final statement of up to 1 billion 108 million yuan, the cumulative net profit over the same period was only 856 million yuan government subsidies, net profit for 250 million higher than. That is to say, government subsidies 1 billion 100 million played a thickening performance effect, color performance elec-tech.

Prior to this, a major theme of Wu Changjiang Wang Donglei and the attack Elec-Tech is Elec-Tech, poor operating conditions, by taking huge government subsidies to survive long-term. In the past August, Wu Changjiang revealed that the BDO financial situation is very bad, "are likely to collapse", explaining the Elec-Tech business worries.

For the performance of government subsidies by questioning eat losses, Elec-Tech secretaries Dunfee told reporters frankly, LED as a new industry, government support, the implementation of appropriate subsidies, subsidies amount is higher, this is the norm in the industry, which is a necessary stage of development of LED industry. Especially Elec-Tech is at the initial stage, the problem is more prominent.

Such as NVC future smooth, if approved by the board of directors, Wang Donglei likely will return to the BDO as general manager.

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