LED lighting prices decline in large sun lighting performance or lower than expected

2014 results or below company plans

According to Yankon disclosed in the 2014 three quarter earnings, the first three quarters of the company achieved total revenue of 2 billion 410 million yuan, an increase of 1.27%, attributable to shareholders of listed companies net profit of 214 million yuan, an increase of 18.6%, earnings per share 0.22 yuan, slightly lower than expected and UBS Securities company plans, mainly affected by the decline in the price increase and LED lighting delayed effect of subsidies.

LED lighting prices decline will narrow the material, the demand is expected to maintain rapid growth

The 2 quarter of 2014 began to be affected by chip prices, LED lighting prices fell, leading to decline in revenue. But the current LED lighting and energy saving lamp spreads fell to about 1.5x, 12 months of stable prices, UBS Securities is expected to decline this year, the price will be significantly narrowed. At the same time, the penetration rate of LED lighting is still low (UBS Securities is estimated to be about 10% in 2014), the next few years is expected to continue to maintain rapid growth, UBS electronics team is expected to reach a penetration rate of 2016 to reach 23.1%.

New customers to develop effective, subsidies are expected to receive this year

Because of Yankon success among other customers outside of PHILPS, including the United States, Germany, Russia and other countries and distributors and retailers, the UBS Securities Company LED lighting sales growth from up to 110%/80%/60% 100%/70%/55% the original 2014/15/16 forecast, but down LED lighting price and revenue forecasts, and down-regulation of 2015/16 gross margin assumption. At the same time, government subsidies in 2014 part of the company's accounts receivable delayed, but UBS Securities is expected to receive this year, and is expected to launch a new subsidy policy, so the company 2014/2015/2016 years of subsidies from the original 1.2/0.45/0.5 billion yuan adjusted to 0.8/1.0/0.8 billion yuan forecast.

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