The LED into capital trap performance degradation instead of promotion?

Followed the footsteps in 2009 to join led optoelectronics industry business transformation Elec-Tech, today's performance has also embarked on the same path with Sanan optoelectronics. The size of government subsidies received by the company is not Sanan optoelectronics, but the current performance of government subsidies is heavily dependent on the same Sanan optoelectronics. The August 20th disclosure report shows that the first half of this year from the government subsidies has exceeded the net profit over the same period. After deducting non recurring gains and losses after the first half of the only recorded a net profit of 574 thousand and 600 yuan, representing a drop of more than 90%. The three quarterly performance of the company's pre announcement becomes pale, reported that its small appliance business gross profit fell more than 6 percentage points. Government subsidies over the net profit Elec-Tech semi annual report released on Saturday, first half operating income and net profit rose 15% and 399%, earnings per share reached 0.21 yuan. But seemingly glamorous performance, in fact, quite pale. During the reporting period attributable to shareholders of listed companies net profit of 102 million yuan, but included in the current profit and loss of government subsidies reached $134 million. And out of government subsidies to the non recurring gains and losses, only the net profit of 574 thousand and 700 yuan, compared with the same period last year fell 97.06%. The structure and performance of industry leading Sanan optoelectronics as like as two peas came from its huge subsidies, the construction projects in the seat of the local government, become a major driving force in the growth of the Sanan optoelectronics: 2010 annual net profit of 420 million yuan, including 253 million yuan of government subsidies; this year the company recorded a quarterly net profit of 165 million yuan, but included in the government subsidy the amount of profit or loss of government subsidies for 130 million yuan, net profit in the proportion increased from 60% to 80%; and then to the semi annual report, three optical net profit of 459 million yuan, but in the same period has confirmed 583 million yuan of government subsidies. But China did not deny the government subsidies "dress up" the performance of the company, admitted that the first half net profit report can increase nearly 4 times, because in Wuhu, a wholly owned subsidiary of LED received 130 million yuan of local financial subsidies, this is the company's operating income of 2 million 610 thousand yuan from the same period last year jumped to 135 million yuan in the main reason. The main business gross margin fell 6 percentage points in 2009 was officially entered the LED industry, but more investment let de Ho Runda in the local financial subsidies are not much less than three optical. Since 2011, the company has received notice of the government subsidies from Wuhu, Yangzhou, Bengbu three city, the total amount reached 513 million yuan; Sanan optoelectronics, new year amounted to 1 billion 44 million yuan subsidy. According to the announcement, Elec-Tech this year received 4 pen subsidies in Bengbu, only 75 million 800 thousand yuan will not affect earnings in 2011, the remaining 437 million yuan will be included in the current profits and losses since this year. In the semi annual report, Elec-Tech has three quarterly net profit is expected to increase will occur within 30% year growth, because in addition to the small appliance business into the traditional peak season and LED raised production release, including "government subsidies are in place. Large government subsidies, the company's main business is very weak in the first half. The first major industry in the first half of the small household appliance business income 910 million yuan, but gross profit was only $120 million, gross margin fell by 6.2 percentage points over the same period last year. This de Ho Runda in 22, the company of small household appliances export-oriented business, the first half of the RMB exchange rate appreciation, as well as the product of the high margin of total sales accounted for the decline, resulting in the sharp decline in gross margin.