On February 21, 2011, Dajin Jingdian Holdings Co., Ltd. (HK 0515) announced that its subsidiary, Dajin Dongfang (Yangzhou) Energy Management Co., Ltd. and Jiangsu Lijiang Traffic Construction Engineering Co., Ltd. signed a 4,600-inch LED. The street lamp product purchase contract, worth about 60 million yuan (more than 10,000 yuan per street lamp), is expected to be delivered before the first quarter of 2012.
Prior to this, Dajin Jingdian has successively won local street lighting projects in Yangzhou, Chengdu, Tianjin, Lianyungang and Henan. In November 2010, its subsidiary Dajin Jingdian Energy Management (Shenzhen) Co., Ltd. was also selected as the “Semiconductor (LED) Lighting Product Application Demonstration Project†organized by the National Development and Reform Commission.
Only involved in the LED industry for more than a year, signed LED streetlight projects in many places in China, and its unique operating mode became the focus of hot discussion in the industry overnight.
The picture shows the geographical distribution of Dajin Jingdian in China.
Hand in hand with Oriental Optoelectronic PCB business to seek transformation
On September 28, 2009, Dajin Jingdian Holdings announced that it has reached a cooperation with Shenzhen Dongfang Optoelectronics Co., Ltd. The two parties will establish a joint venture company to jointly manage energy-saving projects such as LED street lamps through contract energy management mode, and design and manufacture LED lighting and packaging products. The time for the cooperation between the two parties was selected after the Ministry of Science and Technology announced the “Response to the “Response to the Pilot Work of the “Ten Cities and Ten Thousand†Semiconductor Lighting Application Project†for a full five months.
In the shareholding structure of the joint venture company, Dajin Jingdu accounted for 70% of the shares and invested RMB 50 million in cash. The remaining 30% will be funded by Oriental Optoelectronics with cash, LED lighting technology and assets. According to the estimates of both parties at the time, the net profit of the JV Company in the first and second financial years will be no less than RMB 30 million.
Prior to this, Dajin Jingdian seems to have nothing to do with the domestic LED industry. Founded in 1988 and listed in Hong Kong in 2006, the company is one of the top 10 PCB circuit board manufacturers in Hong Kong and China. Since the PCB market has developed over the years, it is already a very mature industry. The competition in the same industry is fierce. Therefore, in recent years, although the company's turnover has increased slightly year by year, its net profit has been declining. Especially after the global financial crisis of 2008, the company's net profit showed a continuous 50% decline in 2008 and 2009. The gross profit margin of the products has also been maintained at around 10%, and the future growth space faces bottlenecks.
Founded in 2000, Oriental Optoelectronics has been relatively low-key in the domestic LED industry. The reporter learned about the company's core advantages on its official website: aluminum nitride ceramic structure, gold tin eutectic technology and lighting control system; then we asked some industry experts on this matter, of which the aluminum nitride ceramic structure is indeed better than The current alumina ceramic substrate has a higher thermal conductivity and provides a thermal expansion coefficient close to that of the LED chip, but currently domestic lighting companies are seldom used because of their high cost.
2005-2010 June Jinjin Annual Report (Unit: HKD)
Source: Gaogong LED Industry Research Institute (GLII) is based on the data released by the Hong Kong Stock Exchange in recent years.
Yang Kaishan, Chairman of the Board of Directors of Dajin Precision Electric, said in an interview with the media: "The business opportunities of LED lighting are huge because of the large scale of the market and the support of government policies. In addition, our joint venture company has a variety of technology patents to help the station. The market with unlimited potential in China. The establishment of the joint venture company is mainly to expand the business scope and source of income of the Group. At present, the circuit board business is still the core business of the Group. With the support of Dongfang Optoelectronics in product application and advanced technology, we have successfully developed The PCB specially designed for LED products far exceeds the gross profit margin of our existing products. According to the insiders of the company, the company will not invest in the PCB business in the future while focusing on the development of LED business.
Zhu Jianqin, President of Dongfang Optoelectronics, responded positively: “Dajin Jingdian’s listed company platform allows us to quickly promote our products to local governments and quickly occupy the market. In addition, our technology and Dajin Precision PCB manufacturing With the integration and financial and management support of listed companies, we are confident that we can successfully obtain orders for LED street lamps in the “Ten Cities and Ten Thousand Plans†in mainland China in the near future. Our contract energy management projects are unique. The positioning can ensure a relatively high level of profitability."
Obviously, the cooperation between the two sides is in line with the situation.
Capital + Technology + Investment Street Light Order = Fund Raising
In the following three months, Dajin Jingdian successfully won the LED streetlight project in Yangzhou, Chengdu, Tianjin, Lianyungang and Henan.
On November 19, 2009, the company signed a letter of intent for cooperation with the Yangzhou Economic Development Zone Administrative Committee of Jiangsu Province. According to the plan of “Ten Cities and Ten Thousand Cities†in Yangzhou at that time, the first stage target was 50,000 LED Street Lights. Among them, Dajin Jingdian was selected as one of the three major suppliers, and it can win no less than 15,000 baht according to the company's expectations. In this regard, the company's senior management will regard this winning bid as an important milestone in the LED municipal lighting business.
After a month of first taste of government orders, the company signed an agreement with the Management Committee of the Southwest Airport Economic Development Zone of Shuangliu County, Chengdu, Sichuan Province on December 30, 2009, except for the establishment of Dajin Dongfang (Sichuan) Energy Management Co., Ltd. At the same time, it also got a total of 30,000 LED LED street lamp renovation project.
On December 13, 2010, Dajin Jingdian announced again that it signed the “Lianyungang Economic and Technological Development Zone Project Investment Agreement†and the Lianyungang Economic and Technological Development Zone Low Carbon Green Lighting Demonstration Project Management Framework with the Lianyungang Economic and Technological Development Zone Management Committee. Agreement, responsible for the LED street lighting project in Lianyungang. According to the company's plan, Lianyungang LED Optoelectronics Manufacturing Project (Dajin Dongfang (Jiangsu) Optoelectronics Co., Ltd. (tentative name)) has a total investment of USD 150 million, of which the Lianyungang Development Zone Management Committee will provide a support amount of RMB 10.98 million. At the same time, according to the framework agreement, the company expects to renovate and build local Led Street Lights about 20,000 miles from 2011, with an estimated total value of not less than RMB 200 million.
In addition to the next three major projects, Dajin also won the bid for Tianjin 2,500 street lamps, and Zhengzhou, Henan, about 120 million yuan contract. Among them, the Tianjin project reporter interviewed the Tianjin Street Lamp Management Office and related departments by telephone. The answer was that they did not know anything about this project.
2009-2010 Dajin Jingdian Domestic LED Street Light Winning Project
Data source: The High-tech LED Industry Research Institute (GLII) is organized according to public information, and the winning bid portion is the result of estimating according to the amount of the public project.
During the company's negotiation of the Lianyungang project, Wu Guangji, the investment director of the group, said in an interview that the 2010 results can reflect the contribution of the LED street lighting business, and the LED street lighting business won 500 million yuan and 700 million yuan respectively in 2011 and 2012. The ultimate goal is to get a $1 billion contract. In general, the LED street light product business has a net profit margin of about 20%; if it undertakes a street light project, the gross profit margin is as high as 50%.
After signing a contract with the Lianyungang Technology Development Zone Management Committee, Yang Kaishan said: "The Group believes that this innovative business cooperation model will set a realistic framework for the Group's future LED operations and can serve as a reference for other government cooperation projects. The government supports that we will make full use of the lighting technology owned by Dajin Jingdian, and strive to expand this operation mode to other surrounding cities, further expand the Group's market share, and strive to become a leading enterprise in the LED lighting industry."
Corresponding to the order, Dajin Precision Power has three energy management companies (Yangzhou, Sichuan, Lianyungang) in the country within one year. Among them, Sichuan company invested 10 million yuan in the first phase. According to the plan, EMC contract energy management investment and financing may reach more than 600 million yuan in the later period; Lianyungang project investment is 150 million US dollars (about 1 billion yuan); When I visited the website, I didn't see any information about Yangzhou Company.
As of the time of the press release, the project environmental assessment report of the three companies was not available for the time being.
At the same time, the reporter also found that in 2010, Jinjin Jingdian successfully raised funds in the capital market for five consecutive times, totaling more than 300 million Hong Kong dollars. Such frequent large-capital fundraising, in addition to enriching the company's operating funds, the large number of LED streetlight orders in the mainland market has clearly become a weapon for enterprises to raise funds. It is difficult to convince investors to enter the market because of the decline in PCB business.
The investment-for-order model has already made Dajin Jingdian taste the sweetness, and perhaps this is the catalyst for the Group's business transformation.
2010 Jinjin Jingdian annual fundraising list
Source: HKEx Announcement
Strategic Alliance + Vertical Integration Mode
Different from the simple investment order of Qinshang Optoelectronics, the vertical integration of Sanan Optoelectronics itself and the upstream investment exchange order, Dajin Jingdian chose to quickly establish an industrial strategy alliance to achieve vertical integration in the business development of LED street lamps.
After obtaining technical support with Shenzhen Dongfang Optoelectronics Co., Ltd., in July 2010, the company formed a strategic alliance with AV Concept Holdings Limited (also listed in Hong Kong). Dajin Jingdian is looking at the Korean LED chip business.
Xiansi has always been a shareholder and distribution agent for the South Korean Wavesquare chip. In June 2010, Xiansi Bank increased its shareholding to 26.26%. Then I thought about spending another $25 million to build a new chip factory in South Korea with Wavesquare, which will increase the current production capacity of Wavesquare's approximately 1 million LED chips to 15 million.
According to the ideas of both parties, the future will be based on the Wavesquare chip package, and with the ceramic circuit board technology, the current production cost of LED street lamps can be reduced by 20% to 30%.
In addition to ensuring the production of upstream chips and street lamps, Dajin Jingdian has also made efforts in the installation of street lamps and market development. In June 2010, the company established a joint venture company with Fengrun Enterprise Co., Ltd. in Shenzhen. The joint venture company will be engaged in LED lighting project installation, LED lighting maintenance and LED lighting market business development.
At the same time, the subsidiary Dajin Dongfang and Foshan Lighting (000541) signed an agreement in May 2010 to produce the Buddha brand streetlights. According to the agreement, the two parties will jointly expand the “Ten Cities and Ten Thousand Miles†and “Thousand Miles of 100,000†LED projects in Foshan and surrounding areas.
The above picture shows the layout of Dajin Jingdian LED industrial chain
On March 3, 2011, Dajin Jingdian Holdings issued a “positive profit forecastâ€, which indicated that the profit forecast for the year ended December 31, 2010 will increase significantly by more than 200% compared with the same period last year.
Prior to this, Dajin Jingdian has successively won local street lighting projects in Yangzhou, Chengdu, Tianjin, Lianyungang and Henan. In November 2010, its subsidiary Dajin Jingdian Energy Management (Shenzhen) Co., Ltd. was also selected as the “Semiconductor (LED) Lighting Product Application Demonstration Project†organized by the National Development and Reform Commission.
Only involved in the LED industry for more than a year, signed LED streetlight projects in many places in China, and its unique operating mode became the focus of hot discussion in the industry overnight.
The picture shows the geographical distribution of Dajin Jingdian in China.
Hand in hand with Oriental Optoelectronic PCB business to seek transformation
On September 28, 2009, Dajin Jingdian Holdings announced that it has reached a cooperation with Shenzhen Dongfang Optoelectronics Co., Ltd. The two parties will establish a joint venture company to jointly manage energy-saving projects such as LED street lamps through contract energy management mode, and design and manufacture LED lighting and packaging products. The time for the cooperation between the two parties was selected after the Ministry of Science and Technology announced the “Response to the “Response to the Pilot Work of the “Ten Cities and Ten Thousand†Semiconductor Lighting Application Project†for a full five months.
In the shareholding structure of the joint venture company, Dajin Jingdu accounted for 70% of the shares and invested RMB 50 million in cash. The remaining 30% will be funded by Oriental Optoelectronics with cash, LED lighting technology and assets. According to the estimates of both parties at the time, the net profit of the JV Company in the first and second financial years will be no less than RMB 30 million.
Prior to this, Dajin Jingdian seems to have nothing to do with the domestic LED industry. Founded in 1988 and listed in Hong Kong in 2006, the company is one of the top 10 PCB circuit board manufacturers in Hong Kong and China. Since the PCB market has developed over the years, it is already a very mature industry. The competition in the same industry is fierce. Therefore, in recent years, although the company's turnover has increased slightly year by year, its net profit has been declining. Especially after the global financial crisis of 2008, the company's net profit showed a continuous 50% decline in 2008 and 2009. The gross profit margin of the products has also been maintained at around 10%, and the future growth space faces bottlenecks.
Founded in 2000, Oriental Optoelectronics has been relatively low-key in the domestic LED industry. The reporter learned about the company's core advantages on its official website: aluminum nitride ceramic structure, gold tin eutectic technology and lighting control system; then we asked some industry experts on this matter, of which the aluminum nitride ceramic structure is indeed better than The current alumina ceramic substrate has a higher thermal conductivity and provides a thermal expansion coefficient close to that of the LED chip, but currently domestic lighting companies are seldom used because of their high cost.
2005-2010 June Jinjin Annual Report (Unit: HKD)
| Â Â Â Â Â Â Â Â Â | 2005 | year 2006 | 2007 | Year 2008 | Year 2009 | June 2010 |
| Turnover | 495,632 | 613,156 | 740,968 | 838,870 | 739,314 | 418,805 |
| Net profit | 37,289 | 39,098 | 60,034 | 27,721 | 11,137 | 12,087 |
Yang Kaishan, Chairman of the Board of Directors of Dajin Precision Electric, said in an interview with the media: "The business opportunities of LED lighting are huge because of the large scale of the market and the support of government policies. In addition, our joint venture company has a variety of technology patents to help the station. The market with unlimited potential in China. The establishment of the joint venture company is mainly to expand the business scope and source of income of the Group. At present, the circuit board business is still the core business of the Group. With the support of Dongfang Optoelectronics in product application and advanced technology, we have successfully developed The PCB specially designed for LED products far exceeds the gross profit margin of our existing products. According to the insiders of the company, the company will not invest in the PCB business in the future while focusing on the development of LED business.
Zhu Jianqin, President of Dongfang Optoelectronics, responded positively: “Dajin Jingdian’s listed company platform allows us to quickly promote our products to local governments and quickly occupy the market. In addition, our technology and Dajin Precision PCB manufacturing With the integration and financial and management support of listed companies, we are confident that we can successfully obtain orders for LED street lamps in the “Ten Cities and Ten Thousand Plans†in mainland China in the near future. Our contract energy management projects are unique. The positioning can ensure a relatively high level of profitability."
Obviously, the cooperation between the two sides is in line with the situation.
Capital + Technology + Investment Street Light Order = Fund Raising
In the following three months, Dajin Jingdian successfully won the LED streetlight project in Yangzhou, Chengdu, Tianjin, Lianyungang and Henan.
On November 19, 2009, the company signed a letter of intent for cooperation with the Yangzhou Economic Development Zone Administrative Committee of Jiangsu Province. According to the plan of “Ten Cities and Ten Thousand Cities†in Yangzhou at that time, the first stage target was 50,000 LED Street Lights. Among them, Dajin Jingdian was selected as one of the three major suppliers, and it can win no less than 15,000 baht according to the company's expectations. In this regard, the company's senior management will regard this winning bid as an important milestone in the LED municipal lighting business.
After a month of first taste of government orders, the company signed an agreement with the Management Committee of the Southwest Airport Economic Development Zone of Shuangliu County, Chengdu, Sichuan Province on December 30, 2009, except for the establishment of Dajin Dongfang (Sichuan) Energy Management Co., Ltd. At the same time, it also got a total of 30,000 LED LED street lamp renovation project.
On December 13, 2010, Dajin Jingdian announced again that it signed the “Lianyungang Economic and Technological Development Zone Project Investment Agreement†and the Lianyungang Economic and Technological Development Zone Low Carbon Green Lighting Demonstration Project Management Framework with the Lianyungang Economic and Technological Development Zone Management Committee. Agreement, responsible for the LED street lighting project in Lianyungang. According to the company's plan, Lianyungang LED Optoelectronics Manufacturing Project (Dajin Dongfang (Jiangsu) Optoelectronics Co., Ltd. (tentative name)) has a total investment of USD 150 million, of which the Lianyungang Development Zone Management Committee will provide a support amount of RMB 10.98 million. At the same time, according to the framework agreement, the company expects to renovate and build local Led Street Lights about 20,000 miles from 2011, with an estimated total value of not less than RMB 200 million.
In addition to the next three major projects, Dajin also won the bid for Tianjin 2,500 street lamps, and Zhengzhou, Henan, about 120 million yuan contract. Among them, the Tianjin project reporter interviewed the Tianjin Street Lamp Management Office and related departments by telephone. The answer was that they did not know anything about this project.
2009-2010 Dajin Jingdian Domestic LED Street Light Winning Project
| project | Yangzhou | Chengdu | Tianjin | Zhengzhou | Lanzhou | Lianyungang | total |
| Number of winning bids (ç›) | 15,000 | 30,000 | 2,500 | unknown | unknown | 20,000 | 67,500 |
| Successful bid amount (100 million yuan) | 1.2 | 3 | 2,500 | 1.2 | unknown | 2 | 8.7 |
During the company's negotiation of the Lianyungang project, Wu Guangji, the investment director of the group, said in an interview that the 2010 results can reflect the contribution of the LED street lighting business, and the LED street lighting business won 500 million yuan and 700 million yuan respectively in 2011 and 2012. The ultimate goal is to get a $1 billion contract. In general, the LED street light product business has a net profit margin of about 20%; if it undertakes a street light project, the gross profit margin is as high as 50%.
After signing a contract with the Lianyungang Technology Development Zone Management Committee, Yang Kaishan said: "The Group believes that this innovative business cooperation model will set a realistic framework for the Group's future LED operations and can serve as a reference for other government cooperation projects. The government supports that we will make full use of the lighting technology owned by Dajin Jingdian, and strive to expand this operation mode to other surrounding cities, further expand the Group's market share, and strive to become a leading enterprise in the LED lighting industry."
Corresponding to the order, Dajin Precision Power has three energy management companies (Yangzhou, Sichuan, Lianyungang) in the country within one year. Among them, Sichuan company invested 10 million yuan in the first phase. According to the plan, EMC contract energy management investment and financing may reach more than 600 million yuan in the later period; Lianyungang project investment is 150 million US dollars (about 1 billion yuan); When I visited the website, I didn't see any information about Yangzhou Company.
As of the time of the press release, the project environmental assessment report of the three companies was not available for the time being.
At the same time, the reporter also found that in 2010, Jinjin Jingdian successfully raised funds in the capital market for five consecutive times, totaling more than 300 million Hong Kong dollars. Such frequent large-capital fundraising, in addition to enriching the company's operating funds, the large number of LED streetlight orders in the mainland market has clearly become a weapon for enterprises to raise funds. It is difficult to convince investors to enter the market because of the decline in PCB business.
The investment-for-order model has already made Dajin Jingdian taste the sweetness, and perhaps this is the catalyst for the Group's business transformation.
2010 Jinjin Jingdian annual fundraising list
| Announcement date | Net proceeds | Proposed use of proceeds | Actual use of proceeds |
| January 21, 2010 | Approximately HK$1,750,000 | Will be used as general working capital of the Group | The net proceeds have been used as general working capital of the Group |
| January 21, 2010 | Approximately HK$62,400,000 | Will be used as general working capital of the Group | The net proceeds have been used for the general working capital of the Group and to obtain the principal interests of Shenzhen Dongfang Optoelectronics Co., Ltd. |
| May 20, 2010 | Approximately HK$240,000 | Will be used as general working capital of the Group | The net proceeds have been used as general working capital of the Group |
| May 20, 2010 | Approximately HK$40,000,000 | To support the Group's possible future investments and/or general working capital of the Group | Has been used as planned to expand the Group's LED business |
| January 14, 2011 | Approximately HK$218,300,000 | Will be used as general working capital of the Group | Â |
Strategic Alliance + Vertical Integration Mode
Different from the simple investment order of Qinshang Optoelectronics, the vertical integration of Sanan Optoelectronics itself and the upstream investment exchange order, Dajin Jingdian chose to quickly establish an industrial strategy alliance to achieve vertical integration in the business development of LED street lamps.
After obtaining technical support with Shenzhen Dongfang Optoelectronics Co., Ltd., in July 2010, the company formed a strategic alliance with AV Concept Holdings Limited (also listed in Hong Kong). Dajin Jingdian is looking at the Korean LED chip business.
Xiansi has always been a shareholder and distribution agent for the South Korean Wavesquare chip. In June 2010, Xiansi Bank increased its shareholding to 26.26%. Then I thought about spending another $25 million to build a new chip factory in South Korea with Wavesquare, which will increase the current production capacity of Wavesquare's approximately 1 million LED chips to 15 million.
According to the ideas of both parties, the future will be based on the Wavesquare chip package, and with the ceramic circuit board technology, the current production cost of LED street lamps can be reduced by 20% to 30%.
In addition to ensuring the production of upstream chips and street lamps, Dajin Jingdian has also made efforts in the installation of street lamps and market development. In June 2010, the company established a joint venture company with Fengrun Enterprise Co., Ltd. in Shenzhen. The joint venture company will be engaged in LED lighting project installation, LED lighting maintenance and LED lighting market business development.
At the same time, the subsidiary Dajin Dongfang and Foshan Lighting (000541) signed an agreement in May 2010 to produce the Buddha brand streetlights. According to the agreement, the two parties will jointly expand the “Ten Cities and Ten Thousand Miles†and “Thousand Miles of 100,000†LED projects in Foshan and surrounding areas.
The above picture shows the layout of Dajin Jingdian LED industrial chain
On March 3, 2011, Dajin Jingdian Holdings issued a “positive profit forecastâ€, which indicated that the profit forecast for the year ended December 31, 2010 will increase significantly by more than 200% compared with the same period last year.
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