Sanan Optoelectronics breaks through the high inventory of Wuhu base into a "life-saving straw"
[Source: "High-tech LED - Research and Review" May issue / reporter Wu Juping] On April 18, Sanan Optoelectronics released its first quarter 2012 financial report. The data showed that its first quarter revenue was 510 million yuan, an increase of 85 percent year-on-year. %, net profit of 204 million yuan, an increase of 40%. For the substantial increase in net profit, the report explained that due to the company's wholly-owned subsidiary Anhui Sanan Optoelectronics Co., Ltd. equipment gradually increased production.
However, Sanan Optoelectronics' inventory has reached a new high, rising from 910 million yuan at the end of 2011 to 971 million yuan, an increase of nearly 60 million yuan from the end of 2011.
"This year's market reaction is good, and the goods are basically sold out. This batch of stocks is mainly the goods that were stranded last year." Ke Yongrui, executive director of Sanan Optoelectronics, told Gaogong LED. Although Sanan Optoelectronics is increasing its efforts to sell goods, the persistent high inventory is still a “fishbone†that cannot be avoided. The longer the storage time, the greater the risk of depreciation and the loss will be unpredictable.
How will Sanan Optoelectronics break through high inventory?
High inventory into a "time bomb"
As the leader of the domestic LED chip industry, Sanan Optoelectronics once had a high level of inventory problems last year.
Sanan Optoelectronics' 2011 annual report shows that its inventory rose from 310 million at the beginning of the year to 918 million at the end of the year, behind the short-term winter of overcapacity in the LED industry. According to the report of the High-tech LED Industry Research Institute (GLII), in 2011, there was a situation of oversupply in the upstream of LEDs, with a 30% drop in supply and demand. International chip giants including South Korea's Samsung, Jingyuan Optoelectronics, etc. have all lowered their capacity utilization indicators to varying degrees. To this end, Sanan Optoelectronics also had to start large cargo at the end of last year to suspend huge inventory pressure.
Entering 2012, the domestic chip market is gradually picking up. Sanan Optoelectronics still chose to speed up the release of production capacity. MOCVD in Wuhu and Tianjin production bases gradually entered mass production. Due to the inertia of the production cycle, the high production capacity released last year concentrated in the first quarter, and the inventory reached a new high of 970 million yuan.
"The goods shipped this year are basically not in stock. This batch of goods is mainly last year. We are trying our best to clear the way. The company is also increasing the manpower and resources of the marketing department." Ke Yongrui said.
Despite this, Sanan Optoelectronics still has to face the risk of depreciation of inventory depreciation.
"It depends on the structure of the goods. If it is a small cost of white light, the problem will not be too big. If it is not, the cost of low-cost provision can also reduce the loss to a certain extent. If you do not make low-cost accruals, this At least 30% to 50% of the goods will be lost.†Shen Guang, vice president of Yaweilang Optoelectronics, told Gaogong LED that if calculated according to this logic, the 9.7 billion inventories will have at least 200 million potential loss risks. .
Liu Qi, general manager of Shandong Inspur Huaguang, said: "The same industry will encounter inventory situation. â€
A person close to Sanan Optoelectronics said that Sanan Optoelectronics is currently dumping a large amount of goods on the market, and conservative estimates are at least 30%.
Although Ke Yongrui repeatedly stated that the inventory did not have any actual impact on the company's operations in the interview, its first quarter report showed that Sanan Optoelectronics' cash flow during the reporting period was 134 million yuan, a year-on-year decrease of 71%.
The industry believes that last year's LED market demand growth slowdown is only temporary, relative overcapacity, the actual market has not been fully opened, the future market will enter the elimination game of the big Evergrande, the real good play is still behind.
In the secondary market, Sanan Optoelectronics has also planned an urgent need to raise 6.3 billion yuan through private placement. As the company's first major event in the first quarter, the report shows that the issuance plan has been submitted to the Securities and Futures Commission and is awaiting approval.
It is reported that the above raised funds will mainly be used in Wuhu Optoelectronics Industrialization (Phase II) project of Anhui Sanan Optoelectronics Co., Ltd.
However, Sanan Optoelectronics' inventory has reached a new high, rising from 910 million yuan at the end of 2011 to 971 million yuan, an increase of nearly 60 million yuan from the end of 2011.
"This year's market reaction is good, and the goods are basically sold out. This batch of stocks is mainly the goods that were stranded last year." Ke Yongrui, executive director of Sanan Optoelectronics, told Gaogong LED. Although Sanan Optoelectronics is increasing its efforts to sell goods, the persistent high inventory is still a “fishbone†that cannot be avoided. The longer the storage time, the greater the risk of depreciation and the loss will be unpredictable.
How will Sanan Optoelectronics break through high inventory?
High inventory into a "time bomb"
As the leader of the domestic LED chip industry, Sanan Optoelectronics once had a high level of inventory problems last year.
Sanan Optoelectronics' 2011 annual report shows that its inventory rose from 310 million at the beginning of the year to 918 million at the end of the year, behind the short-term winter of overcapacity in the LED industry. According to the report of the High-tech LED Industry Research Institute (GLII), in 2011, there was a situation of oversupply in the upstream of LEDs, with a 30% drop in supply and demand. International chip giants including South Korea's Samsung, Jingyuan Optoelectronics, etc. have all lowered their capacity utilization indicators to varying degrees. To this end, Sanan Optoelectronics also had to start large cargo at the end of last year to suspend huge inventory pressure.
Entering 2012, the domestic chip market is gradually picking up. Sanan Optoelectronics still chose to speed up the release of production capacity. MOCVD in Wuhu and Tianjin production bases gradually entered mass production. Due to the inertia of the production cycle, the high production capacity released last year concentrated in the first quarter, and the inventory reached a new high of 970 million yuan.
"The goods shipped this year are basically not in stock. This batch of goods is mainly last year. We are trying our best to clear the way. The company is also increasing the manpower and resources of the marketing department." Ke Yongrui said.
Despite this, Sanan Optoelectronics still has to face the risk of depreciation of inventory depreciation.
"It depends on the structure of the goods. If it is a small cost of white light, the problem will not be too big. If it is not, the cost of low-cost provision can also reduce the loss to a certain extent. If you do not make low-cost accruals, this At least 30% to 50% of the goods will be lost.†Shen Guang, vice president of Yaweilang Optoelectronics, told Gaogong LED that if calculated according to this logic, the 9.7 billion inventories will have at least 200 million potential loss risks. .
Liu Qi, general manager of Shandong Inspur Huaguang, said: "The same industry will encounter inventory situation. â€
A person close to Sanan Optoelectronics said that Sanan Optoelectronics is currently dumping a large amount of goods on the market, and conservative estimates are at least 30%.
Although Ke Yongrui repeatedly stated that the inventory did not have any actual impact on the company's operations in the interview, its first quarter report showed that Sanan Optoelectronics' cash flow during the reporting period was 134 million yuan, a year-on-year decrease of 71%.
The industry believes that last year's LED market demand growth slowdown is only temporary, relative overcapacity, the actual market has not been fully opened, the future market will enter the elimination game of the big Evergrande, the real good play is still behind.
In the secondary market, Sanan Optoelectronics has also planned an urgent need to raise 6.3 billion yuan through private placement. As the company's first major event in the first quarter, the report shows that the issuance plan has been submitted to the Securities and Futures Commission and is awaiting approval.
It is reported that the above raised funds will mainly be used in Wuhu Optoelectronics Industrialization (Phase II) project of Anhui Sanan Optoelectronics Co., Ltd.
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