From 1.5 billion to less than 5 million.

Last night, QinShang Optoelectronic released an announcement saying that due to the slow progress of the "Xinhua Frequency Media LED Display Project", the company signed a cancellation agreement with Guangzhou Ji Cai Culture Communication Co., Ltd. (hereinafter referred to as "Ji Cai Company"). This means that Qinshang Photoelectric Co., Ltd.'s initial five-year contract for a total of 1.5 billion yuan was completed when only 4.667 million yuan was completed.

In 2012, only performed 4.665 million yuan

According to the LED display purchase agreement signed by Qinshang Optronics Co., Ltd. on December 21st, 2011 with Jicai Co., Ltd., the total purchase amount reached 1.5 billion yuan, and the term was five years. The annual purchase amount is estimated to be 300 million yuan.

"However, due to the market's lack of effective demand for LED display, LED display business intensified competition, the government's approval of screen construction applications is more stringent and cautious." All need to be individually approved, and LED displays installed in different places are managed by different regulatory agencies. Therefore, in these actual application processes, the strictness of the government approval process and the uncertainty of the approval results led to a rather slow progress of the project. In addition, Ji Cai will carry out investment and construction of other display projects in other cities in China, resulting in substantial changes in the plans and conditions of the original agreement. From a prudent point of view, Qinshang Optoelectronics decided to negotiate with Ji Cai Company to cancel the original agreement.

According to the announcement, the original agreement was implemented on January 1, 2012, but only 4.667 million yuan was actually contracted for the entire year of 2012, accumulating 256.38 square meters of screen area.

Wei Li said that although the original agreement was lifted, Qinshang Optoelectronics and Ji Cai Company remained in contact. The display unit project of Fangcun and Zhongshan Second Hospital signed by the two parties on the basis of the original agreement was still in accordance with the aforementioned The contract signed is executed. “Ji Cai Company promised that its follow-up LED display projects invested or participated in the construction in Guangdong Province and other regions will continue to use Qinshang Optoelectronics as its first partner, preferring to purchase LED display screens supplied by Qinshang Optoelectronics.”

Loss of opportunity to expand profit growth

According to the announcement, Qinshang Optoelectronic's forecast for the third, fourth quarter and 2012 annual results for 2012 does not include any business that did not occur under the original agreement. Therefore, the agreement was lifted and the company's 2012 annual performance forecast and amendments have not been affected.

According to Wei Li, Qinshang Optoelectronics' business mainly consists of LED lighting business. In 2012, LED display business contributed less than 5% of its main business, while LED lighting business accounted for more than 90%. Wei Li also emphasized that Ji Cai Company was not a major customer of Everlight Optoelectronics, and the company did not rely on its sales contribution.

In spite of this, the lifting of the LED display procurement contract will have a greater impact on the future growth prospects of QinSheng Optoelectronics. Qinshang Optoelectronics had a total operating revenue of 769 million yuan in 2011, of which the display and other business operating revenue was 212.64 million yuan; in the first half of 2012, the company's total operating revenue was 364 million yuan, and display and other business contribution revenue was 12.5465 million yuan. According to the original agreement, LED display business will bring more than 300 million yuan in revenue each year in the next few years. For Shangshang Optoelectronics, it undoubtedly expands a very good new profit growth point.

LED display structure facing adjustment

At present, the LED display industry still presents a situation of oversupply, and fierce competition forces manufacturers to voluntarily lower prices and scramble for orders.

According to industry sources, the LED display prices in 2012 fell by about 15% to 20%. In this process, the big manufacturers with the strength hope to eliminate some of the small and medium-sized manufacturers through price wars, but the price war has greatly affected the performance of LED display manufacturers. It is expected that at least 30% of the company's revenue will appear in 2012. fall back.