LED market weakness billion optical crystal rating was lowered

LED industry after the rapid decline in the second half of 2011, the original hope everybody will rebound in 2012, but still subject to the market capacity pressure product prices continued to pile up in excess of requirement, price, gross margin and profit rate are not high camp, LED market is still weak, the latest report of the Securities Merrill Lynch, were also downgraded billion light target price to 34.2 yuan, while the crystal is cut to 45 yuan, both reiterated that "behind the market" rating.

Merrill Lynch pointed out that LED leads to fierce market competition, LED packaging factory profits shrink, plus operating costs and expenses control more difficult, so the estimated billion light year revenue even flat last year, but the profit will decline in 35% years, so the billion light target price from the original 42 yuan down to 34.2 yuan.

According to the forecast, Everlight operations Merrill said in the fourth quarter LED for the traditional off-season, so the estimated revenue for the quarter compared with the previous quarter of 4 billion 900 million yuan is about 2~3% and the interest rate decline, the camp will decline to 5.8% level; for the 2012 full year operating performance, expected revenue is still unchanged from last year's 18 billion 642 million yuan, but by the average product falling prices and operating costs and cost growth, will make the annual profit fell 35%, and this situation will continue until 2013.

The recent stock price continued to rise despite crystal electric higher, but still give "behind the market" Merrill Lynch rating, the main reason for the crystal electric LED grain is still facing the environmental pressure of the pile up in excess of requirement, even if the situation in 2013 may have eased, but the company can profit space is still small, so the target price will be lowered from the original 52 yuan to 45 yuan. If there is a clear breakthrough in 2013 LED lighting market demand, and can successfully win orders for major smart phones or tablet models, Merrill Lynch will be positive for the company's rating.