Surge! Multiple chip companies release semi-annual reports, with the highest net profit increase approaching 35 times

BPSemi's net profit surged more than 34-fold in the first half of the year

On August 17, BPSemi, a leading LED driver chip design company, released its semi-annual report stating that in the first half of 2021, the company achieved Revenue of RMB 1.066 billion, a Year-on-year (YoY) increase of 177.19%; Net profit attributable to shareholders of the listed company was RMB 336 million, a Year-on-year (YoY) increase of 3456.99%. BPSemi recorded its highest growth ever in the first half of this year.

BPS is one of the leading domestic chip design enterprises in power management driver ICs. Its main business is the design, R&D, and sales of analog semiconductor power management chips. The company's current products include LED lighting driver chips, motor driver chips, AC/DC power supply chips, DC/DC power supply chips, etc.

Among them, the operating performance of each product line is as follows:

Benefiting from strong downstream demand in the industry, the company's sales revenue from LED lighting driver products increased significantly in the first half of 2021, and the gross profit margin of LED lighting driver products rose. Among them, the sales volume of general-purpose LED lighting driver products increased by 76.02% year-on-year, achieving sales revenue of RMB 534 million, a year-on-year increase of 145.65%; the sales volume of smart LED lighting driver products increased by 197.55%, achieving sales revenue of RMB 472 million, a year-on-year increase of 232.97%.

BPS pointed out that in the first half of 2021, upstream production capacity supply in the industry remained tight with no signs of easing in the short term. To make fuller use of existing resources and align with the company's product strategy, BPS optimized its product structure during the reporting period and increased the delivery priority for smart LED lighting driver chips. The proportion of smart LED power driver chips in total sales revenue rose from 36.91% in the same period last year to 44.33%, an increase of 7.42 percentage points.

In the field of AC/DC power supply chips, against the backdrop of domestic substitution, BPS has actively promoted its AC/DC products and received positive customer feedback. Specifically, AC/DC power supply chips for major home appliances (primarily white goods such as air conditioners, refrigerators, and washing machines) have completed customer validation, with multiple customers entering the mass production sales stage; AC/DC power supply chips suitable for small home appliances have begun the sample delivery stage; and AC/DC products for single-live-wire smart panels have started mass shipments. During the reporting period, products with built-in AC/DC power supply chips achieved total sales revenue of RMB 12.2097 million, representing a year-on-year increase of 1,204.30%.

In terms of production capacity, during the reporting period, the company's overall product sales volume increased by 89.37% compared to the same period last year. Amid tight upstream supply in the industry, in addition to maintaining existing production capacity, the wafer foundry Global Foundries Singapore Pte. Ltd, with which the company previously established process cooperation, has also gradually brought additional production capacity. Furthermore, the company adopted the method of prepaying some suppliers to secure medium- to long-term production capacity for raw materials in advance.

BPS also stated that during the reporting period, upstream raw material prices increased. To balance product costs and customer demand, the company adjusted its product prices. The increase in unit price drove the overall gross profit margin up from 25.03% in the same period last year to 46.76%, an increase of 21.73 percentage points.

In addition, BPS continues to deepen cooperation with upstream and downstream enterprises in the semiconductor industry through external investments, expanding its Industry layout. In June 2021, for the purpose of Industry synergy, the company planned the Acquisition of a 95.75% equity stake in Nanjing Lingou Chuangxin Electronics Co., Ltd. Nanjing Lingou's main products are motor control MCUs, which help enhance the competitiveness of the company's overall Solution in the field of variable frequency ceiling fan lights and variable frequency home appliances. They also expand chip R&D capabilities in niche markets such as electric vehicles, servo control, and power tools, strengthening the company's market competitiveness and creating new profit growth points.

Jucan Optoelectronics' net profit increased by more than 4 times, with gross margin improvement

On the evening of August 17, Jucan Optoelectronics released its semi-annual report, showing growth in both Revenue and Net profit, with the growth rate of Net profit exceeding that of Revenue.

In the first half of the year, Jucan Optoelectronics achieved revenue of RMB 961 million, a year-on-year (YoY) increase of 56.70%; net profit attributable to shareholders of the listed company reached RMB 70.1086 million, a significant year-on-year (YoY) increase of 412.55%.

Jucan Optoelectronics is mainly engaged in the R&D, production, and sales of compound optoelectronic semiconductor materials. Its main products are GaN-based high-brightness LED epitaxial wafers and chips.

The company stated that the aforementioned core operating indicators all showed significant growth, mainly due to:

(1) Benefiting from the sustained upturn in the LED chip industry, especially the strong demand for mid-to-high-end chips, the company's production capacity release effect was significant during this period. Meanwhile, by adhering to the production and sales strategy of "unifying marketing with sales, determining production based on sales, and promoting sales through production," the company further increased its product market share, achieving unity between maximized production capacity and optimized benefits. With steady expansion in domestic and overseas markets, revenue achieved substantial year-on-year growth.

(2) The company strengthened technological innovation, increased R&D investment, and implemented product transformation and upgrading. High-end products represented by high luminous efficacy, high voltage, flip-chip, and backlighting have high added value and strong market competitiveness. The company timely raised the selling prices of certain chip products, significantly increasing gross profit, which in turn drove a substantial year-on-year (YoY) growth in net profit.

(3) On the basis of sustained growth in net operating cash flow driven by a significant improvement in operational efficiency, the Company successfully completed a private placement of shares to specific investors. This effectively controlled the scale of interest-bearing liabilities, further reduced interest expenses, and substantially improved the financial position, resulting in a significant decline in the asset-liability ratio. These developments will have a clear positive impact on operating performance in the current period and in subsequent periods.

In terms of revenue composition by product, GaN-based high-luminance LED chips and epitaxial wafers achieved sales revenue of RMB 576 million, with the gross profit margin rising from 21.7% in the same period last year to 27.52% this year. The products are mainly applied in mid-to-high-end fields such as display backlighting, general lighting, horticultural lighting, and medical aesthetics.

In addition, in the first half of 2020, the production output of Jucan Optoelectronics' Suqian production base reached 6.35 million pieces, and reached 9.34 million pieces in the first half of this year. In June this year, Jucan Optoelectronics completed a private placement, one of the fundraising investment directions being the "High Luminous Efficacy LED Chip Capacity Expansion and Upgrade Project" in Suqian. Upon completion of the project construction, it is expected to form a production capacity of 9.5 million blue-green LED chips per year, including 8.28 million blue-green LED chips per year and 1.2 million Mini LED chips per year.

The upstream LED chip sector has entered a period of high prosperity. In addition to the aforementioned companies, Silan Micro achieved revenue of RMB 3.308 billion in the first half of the year, a Year-on-year (YoY) increase of 94.05%; net profit attributable to shareholders of the listed company reached RMB 431 million, a significant Year-on-year (YoY) surge of 1306.52%.

In the first half of the year, Fuman Electronics achieved revenue of RMB 851 million, a year-on-year increase of 239.31%; net profit was RMB 316 million, a year-on-year increase of 1190.55%.

In the first half of 2021, Mingwei Microelectronics achieved Revenue of RMB 618 million, an increase of 237.69%; Net profit was RMB 303 million, a Year-on-year (YoY) increase of 944.79%;

Sanan Optoelectronics achieved revenue of RMB 6.114 billion in the first half of the year, a Year-on-year (YoY) increase of 71.38%; net profit was RMB 884 million, a Year-on-year (YoY) increase of 39.18%.

Amid chip shortages and rising prices, the LED industry's profit structure shows an "upstream-heavy, downstream-light" pattern, even sparking recent controversy over alleged price gouging in the LED chip segment. Recently, Shanglanpu Video issued a public report accusing Fullhan Electronics of abusing its market dominance to monopolize the relevant chip market, and has submitted a "Report Letter on Fullhan Electronics' Suspected Abuse of Market Dominance to Monopolize the Relevant Chip Market" to the China Optics and Optoelectronics Industry Association and the Anti-Monopoly Bureau of the State Administration for Market Regulation. However, Fullhan Electronics denies directly supplying Shanglanpu Video.