Triple worry shrouded LED stocks face value regression

Led plate had let the market madness, now, these companies may have a good day coming to an end.

Displayed great wisdom at the end of February, the sector rose to 20% by the end of January, but as of yesterday, LED index basically "come back to where".

Leading enterprises fell particularly heavy. An optoelectronic price since March 14th the highest price of 50.89 yuan / share, May 4th to close at 39.28 yuan / share, interval or 22.81%; Lehman photoelectric from 44.23 yuan / share fell to 26.74 yuan / share, down 39.54%; the country star power is since February the highest price of 43.09 yuan / share, down to May 3rd of 26.68 yuan / share the interval, or up to 38.08%.

Hidden in the fierce fell behind, is the market for LED industry profitability and performance risk concerns. A quarterly show, LED sector performance slowdown, many LED companies and even decline in performance. For example, the country's first quarter net profit of 25 million 510 thousand yuan, down by 20.42%; net profit attributable to shareholders of Listed Companies in the first quarter net profit of $5 million 268 thousand, down by 38.23%.

"Due to the massive expansion over a period of time, while the terminal market demand and has not really started, leading to LED production capacity 'structural surplus', but also cause there is a big gap between corporate profitability and market expectations. Warburg securities analyst Chen Liang pointed out.

Industry three worries

Capital and institutions by hand, LED stocks rose across two years long journey.

In early 2009, Sanan optoelectronics, Silan, Elec-Tech and other related stocks price is 10 yuan. The Ministry of science and technology leading "ten city lights" project started rising in the industry sounded the horn, "energy saving" and "low carbon economy" concept under the guidance of the LED concept stocks rise directly to a high position. To early 2011, the company's share price has doubled several times, the price earnings ratio is rising, which Sanan optoelectronics price earnings ratio is up to 100 times more.

But the ideal is full, the reality is very skinny". Hot pursuit of the capital market, and can not replace the real market demand.

Had the great in strength and impetus "ten city lights" project launched less than a year, in the country frequently hit a snag, pricing too high, the qualified rate of non-compliance and other problems have been exposed, as in the LED lighting industry bud cast a shadow.

Rather strange that the market is not satisfactory, the net profit of listed companies is not affected by this.

"High government subsidies, has become the biggest source of profits in LED industry, Sanan optoelectronics, such as Elec-Tech, government subsidies accounted for almost half of the country's corporate profits, also disguised spawned the LED industry 'false prosperity'. North a brokerage analyst pointed out that electronic components.

According to a quarterly show, an optoelectronic government subsidies included in the current profits and losses were 130 million yuan, accounting for 78.55% of the company's net profit over the same period; nationstar profit or loss of government subsidies for 1 million 240 thousand yuan, accounting for 23.54% of net profit over the same period, government subsidies and Elec-Tech included in the current profits and losses as high as 133 million yuan. Much higher than the net profit of the reporting period, 65 million 413 thousand yuan.

High and stable government subsidies for enterprises to stable performance report, also further stimulate enterprise expansion impulse. An example is that the production of LED epitaxial wafer and chip core production equipment MOCVD is the basic equipment of the whole industry chain. Only in 2010, the world's new MOCVD more than 730 units, an increase of more than two times more than in 2009, more than 310 units, Chinese companies contributed most of the order requirements.

In addition, LED companies also actively expand capacity in fund-raising. In April 13th this year, three optical throws a placement program, project financing is not more than 8 billion yuan, intends to raise funds for Wuhu optoelectronic industry two and LED two project application package. Prior to this, the backdoor listing of less than three years of Sanan optoelectronics has completed two times respectively issuance, to raise funds 819 million yuan and 3 billion 30 million yuan, prior to 2010, Silan, Elec-Tech company also dished out the additional financing scheme of 600 million yuan and 1 billion 500 million yuan respectively, have been obtained through the issuance examination committee.

Although capacity continues to expand, but the enterprise profit has no substantial growth. Golden State Securities [14.43 shares 0.35%] analyst Cheng Bing pointed out that the current upstream of the LED epitaxial wafer and chip patent monopolized by Europe Japan and the United States enterprises, part of the package in squeezing Taiwan and South Korean companies, but in the downstream part of the application, with the help of local government support and the advantages of the enterprises, in order to obtain development space.

Profits depend on high subsidies, the expansion of production capacity and the technology behind the excessive heteronomy, LED industry seems to be beautiful bubble burst.

Wait for full demand start

The market "is the industry is expected to double the growth rate, the actual growth is only about 30%. Chen Liang bluntly.

AJ securities analyst Zhu Zhiyong said that the market is worried that if the market is not mature LED institutions such as the expected start around 2012, as the industry leading enterprises, is bound to bear no small expansion risk.

In addition, Yangzhou municipal government has made clear that the new MOCVD equipment will be suspended for approval in July 2011, and to stop each MOCVD equipment up to 10 million yuan purchase subsidies, in order to control the growing capacity of LED.

And concentrated area in Guangdong Jiangmen, Anhui Wuhu LED capacity, the government subsidies cut for each set of MOCVD equipment up to tens of millions