Tracking: Fangda group LED business performance has shrunk dramatically

The evening of June 18th, Fangda group notice in the first half net profit will decline 50% to 80%. The company said the results of the change is mainly decided by the board of directors decided to stop holding subsidiary Shenyang Fangda Semiconductor Lighting Co., Ltd. (hereinafter referred to as Shenyang Fangda) operation, the Shenyang side of the relevant assets due to impairment.

Fanta that night the board released the announcement, since the Shenyang side was founded in 2007, the semiconductor lighting (LED) products prices continue to fall, the market competition is intense, wafer and chip LED R & D and production need to invest a lot of money, but funding is not enough, leading to the Shenyang Industrial scale small business has not improved, 2011 net profit loss 17 million 290 thousand yuan (hereinafter referred to as yuan), accounted for large proportion of -17% group net profit for the year, the group decided to stop Shenyang business.

Aijian Securities said that in recent years, LED industry boom as expected, and the many enterprises swarmed, capacity surplus, if there is no technical advantage, the yield is not high, lost in the price war, some enterprises to survive will be shut down, Shenyang Taisho is a failed investment case of LED industry.

Tianfeng Securities said that the main problem of the Shenyang side should be the core technology and product quality does not pass, the other large group profit is not a positive contribution, and short-term improvement room is very small, the company may consider now this revenue less stripping assets, if the Shenyang side to take back the stable profit.

Fangda group also said in its 2011 Annual Report, in 2012 the company will further strengthen the curtain wall system in the LED display system, the advantages of LED engineering applications and curtain wall industry as a key development direction.

So, why not put on the LED side of the big business to invest more money? A staff member of the board of directors of the office did not give a positive explanation, saying only that the company is to stop the development of strategic needs. However, the company's financial statements show that in recent years, the company's financial position is poor, cash flow is quite tight.

Wind database shows that in the first quarter of 2012, Fangda group's revenue was 234 million yuan, down by 10.8%, net profit of $7 million 248 thousand and 300, down 45.60%. While Asian shares (the revenue and net profit year-on-year growth of 51.67% and 57.67%, jintanglang's revenue and net profit year-on-year growth of 40.79% and 72.46%.

The data also show that in 2010 to the first quarter of 2012, Fangda group accounts receivable were 397 million yuan, 664 million yuan and 663 million yuan, the proportion of the revenue of the same period were 34.16%, 49.22%, 283.33%, accounts receivable turnover rate from 3.18 to 0.35; inventories were 280 million yuan, 254 million yuan, 225 million yuan, accounting for the proportion of current assets were 22.23%, 19.11% and 18.14%, the inventory turnover rate from 3.99 to 0.78. Correspondingly, the first quarter of 2012, Asian shares accounts receivable turnover and inventory turnover rates were 0.44 and 3.96, jintanglang accounts receivable turnover and inventory turnover rates were 0.59 and 39.62, operation turnover in the ability of Fangda group.

Accounts receivable and inventories increased significantly caused by the cash flow of large group, from 2010 to 2012 in the first quarter, the company's net operating cash flow of -3118.73 million, -5704.55 million and -4249.05 million.