Foreign capital: crystal electric and canyuan is expected to take 20% of global market share

LED chip manufacturers EPISTAR and canyuan announced in June 30th will be merged with 3.448 shares, with a renewal of canyuan crystal electric, "new crystal electric" will be formed in the end of this year, then canyuan will become the 100% holding subsidiary of crystal electric. For the LED chip two hands, the latest report issued by the foreign side also gave praise, pointed out that the merger, is a win-win situation for crystal power, canyuan.

Small friction analysis, the current monthly production capacity of about 900 thousand crystal film (with a length of 2 inches to calculate the film, the same below), but also need to fear an additional $350 thousand monthly production capacity to meet the current customers in the lighting, backlight booming demand. Now eat canyuan, is expected to push the crystal electric capacity to 1 million 300 thousand tablets.

Small Moldova pointed out that in this case the merger can benefit both sides: first, crystal power can increase 25% capacity, and reduce the pressure of bidding originally from canyuan. In 6~12 months, canyuan estimated production efficiency and gross margin, it is expected to increase to level with similar crystal electric. Small friction and believes that this case in addition to further expand the merger of both sides of the patent barriers, the new crystal power is expected to win 20% of the global market share, as well as 30~40% capacity.

Citigroup is incorporated into the analysis, in canyuan, EPISTAR's monthly production capacity will reach about 1 million 200 thousand, the number of MOCVD machines will increase to 450~500, it can reduce the unit cost of production, and it is helpful to get more customers back (for example, the United States and the BOE) lighting brand customers.

It pointed out that the merger of EPISTAR and canyuan display confirms the LED lighting and backlighting demand remains strong, and even competitors continued expansion of factory land three, is expected in 2015, the number of Taiwan MOCVD machine from 150~160 now and then increased to 250~260, the market will likely produce price pressures, but Citigroup good, through the optimization of product mix crystal electric and play the synergy, can still steady growth driven profit.

Lyon believes that crystal power into canyuan between widening and three optical gap, and the crystal electric next year EPS forecast from $3.98 to $4.03, and the maintenance of crystal electric buy rating and target price of 90 yuan. But Lyon also reminded that the move on the downstream of the LED packaging plant has a negative impact on fear, due to the upstream suppliers tend to big rival, choose less.

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