On August 20th, Jufei Optoelectronics (300303, SZ) released the 2016 semi-annual report. What makes people happy is that the company's revenue in the first half of this year increased sharply by 57.32% to 655 million yuan, while net profit fell by 12.56% year-on-year to 59.414 million yuan.
In addition to the increase in product sales, another reason for the growth of Jufei Optoelectronics' revenue is the merger of Hong Kong subsidiary statements; one of the important reasons for the decline in net profit is the decline in the gross profit margin of LED products. The gross profit margin of Jufei Optoelectronics LED lighting products has fallen below 10% in the first half of 2016, only 9.4%.
Dr. Zhang Xiaofei, Dean of the High-tech Industry Research Institute, said in an interview with the Daily Economic News that lighting packaging companies with gross margins below 10% are difficult to survive. "15% of gross profit margin will have a profit of around 7%. Rate, gross profit margin is less than 10%, profit is less than 5%, and it is difficult to survive by counting raw materials and labor costs."
The decline in gross profit margin of LED lighting products is already the norm in the industry. For Jufei Optoelectronics, LED lighting products account for only 11.32% of revenue, and can still support the company with other products, and many small and medium-sized LED companies may not be so lucky.
M&A projects contribute nearly 30% increase
Earlier this year, Jufei Optoelectronics acquired a 51% stake in Hong Kong company LiveCom Limited for 90 million yuan. According to the announcement, LiveCom Limited is an international information integrated service provider, which provides one-stop communication, enterprise information and TV content for overseas operations for cross-border users such as enterprises, organizations and governments in China. service.
Jufei Optoelectronics financial statements show that the year-on-year growth of revenue in the first half of this year was 239 million yuan, while LiveCom Limited from the date of purchase to the end of June, the revenue was 72.082 million yuan. In other words, about three of the revenue increments of Jufei Optoelectronics in the first half of the year have contributed to LiveCom Limited.
Jufei Optoelectronics announced that the company's main LED packaging, the business is relatively single, affected by the industry's prosperity, the company proposed to diversify in the emerging industries through mergers and acquisitions, investment, etc., to foster new profit growth points.
However, although the M&A has contributed revenue to the company, it has also dragged down the net profit. According to the financial statements, the gross profit margin of Jufei Optoelectronics LED industry in the first half of the year was 23.68%, down 1.26 percentage points from the same period of the previous year; the gross profit margin of the newly added communication technology service industry was only 18.69%, lower than its main business.
The decrease in gross profit margin is undoubtedly an important reason for the decline in the net profit of Jufei Optoelectronics. In addition, with the expansion of revenue scale, Jufei Optoelectronics increased the amount of accounts receivable in the first half of 2016 by 42.37% to 563 million yuan, and the provision for bad debts increased.
At the same time, the three major expenses of Jufei Optoelectronics increased significantly, among which the sales expenses increased by 2.01 times to 18,337,600 yuan. In addition, the investment income and non-operating income of Jufei Optoelectronics decreased significantly. The above factors superimposed, which made Jufei Optoelectronics' net profit decline in the first half of 2016.
LED lighting device gross margin fell below 10%
In the main business composition table, the gross profit margin of Jufei Optoelectronic Lighting LED products is particularly noticeable. The revenue of this product is 74.109 million yuan, the operating cost is 67.114 million yuan, and the gross profit margin is only 9.4%.
Jufei Optoelectronics started in LED packaging, and its main products can be divided into backlight LED products and lighting LED products according to their uses. The "Daily Economic News" reporter combed the annual report and found that when the A shares were launched in 2012, the gross profit margin of Jufei Optoelectronics LED products was 23.5%. Since then, it has been declining year after year, and it has fallen below 10% in the first half of this year.
Excessive competition and enthusiasm have long been the norm in the LED industry.
Guo Xiu, secretary-general of the Guangdong Lighting Association, said in an interview that the gross profit margin of LED upstream and downstream products is relatively high, and the package of the midstream is slightly lower. "The profit margin of the industry has been very limited and has been drained unless there is an innovative type. Technological breakthroughs or new products, there are many companies with gross profit margins of 7% and 8% in the industry."
With the news that the company has been closed down in the industry chain, the LED industry has shown a "dismal" scene. "Technological innovations include changes in application methods, which intensify industry competition. However, industry integration and progress are good things. After two to three years of adjustment, the market will be more standardized and better. The market for LED lighting products is still there. Although the growth rate of the industry has slowed down, it has been growing." Guo Xiu said.
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