Summary | Tough! Most LED listed companies saw a decline in net profit in Q1!

The first quarter is traditionally a slow season for the semiconductor industry. Coupled with the impact of new rounds of epidemics, according to incomplete statistics, except for a few companies such as Bull, Leyard, Absen, and Mao Shuo Power Supply, most LED-related listed companies reported a decline in net profit in their Q1 reports, with some even incurring losses.

Bull Group

Bull Group released its Q1 2022 report, achieving revenue of RMB 3.078 billion, a year-on-year (YoY) increase of 19.58%, and net profit attributable to shareholders of the parent company of RMB 641 million, a year-on-year (YoY) increase of 5.68%.

Bull Group stated that it will continue to deepen its focus on three major business segments: electrical connections, smart electrician lighting, and digital accessories. While continuously strengthening its ToC channel advantages, it will vigorously expand its ToB channel efforts, accelerate exploration of overseas markets, and speed up its global layout.

In its 2021 annual report, Bull Group also stated that the company will focus on the two major tracks of smart ecosystems and new energy, leveraging its core strengths to structure its business, build a whole-home smart ecosystem centered on mainless lighting, and simultaneously support the development of the new energy industry, providing consumers with better and more electrical products and services.

OPPLE Lighting

OPPLE Lighting disclosed its Q1 report: the company achieved revenue of RMB 1.455 billion in the first quarter, a Year-on-year (YoY) decrease of 17.14%; Net profit attributable to shareholders of the Listed company was RMB 66.247 million, a Year-on-year (YoY) decrease of 50.88%; basic earnings per share were RMB 0.09, a Year-on-year (YoY) decrease of 50%.

According to the analysis, the company's revenue performance is under pressure due to factors such as recurring pandemic outbreaks and a weakening real estate sector.

Regarding its development strategy, OPPLE Lighting stated that the company consistently adheres to independent brands, systematically strengthens brand building, seizes opportunities from national regional development and industrial consumption upgrades, focuses on user needs, drives innovation through technology, bases operations on digital and intelligent manufacturing, aims to become a leading provider of comprehensive lighting system solutions in the industry, and actively expands into smart home and other fields through an ecosystem strategy:

In terms of products, we gain deep insights into user lighting needs across various scenarios such as home, retail, industrial, and road environments, achieving a service upgrade from individual products to lighting solutions. We have established a user-centric full lifecycle service assurance mechanism and rapid end-to-end solution delivery capabilities. Regarding channels, the company actively upgrades and empowers existing offline channels while enhancing brand awareness and value through online brand and business layout. Meanwhile, we continue to explore new channels to strengthen our channel advantages; for the high-potential lower-tier markets, we rapidly deploy and formulate corresponding strategies to expand our competitive edge in depth markets.

Driven by technological innovation and adhering to the "people-oriented" design philosophy, we increase investment in lighting technology to further lead the understanding and application of light. Meanwhile, we continue to focus on the "smart lighting" strategy, leveraging IoT and AI technologies to influence partners and users by delivering OPPLE Lighting standards of "health, intelligence, and professionalism," thereby building a smart lighting ecosystem.

Xingyu Shares

Xingyu Shares' revenue in Q1 2022 was RMB 2.132 billion, a Year-on-year (YoY) increase of 11.60%; Net profit attributable to shareholders of the Listed company was RMB 270 million, a Year-on-year (YoY) decrease of 5.61%.

Tospo Lighting

In the first quarter of 2022, Tospo Lighting achieved revenue of RMB 1.256 billion, a year-on-year increase of 4.56%. The net profit attributable to shareholders of the listed company was RMB 60.1078 million, a year-on-year decrease of 36.62%.

Tospo Lighting stated that the decline in net profit was mainly due to equity gains from the disposal of its subsidiary's engineering plastics business in the same period of 2020.

Leyard

In the first quarter of 2022, Leyard achieved Revenue of RMB 1.762 billion, a year-on-year increase of 18.21%; gross profit margin was 30.81%; Net profit attributable to shareholders of the Listed company was RMB 115 million, a year-on-year increase of 10.75%.

Leyard stated that due to the recurring domestic epidemic in the first quarter, direct sales business, especially cultural tourism night tours, were significantly affected in terms of project bidding, implementation, acceptance, and final settlement. Therefore, the revenue and net profit growth during the reporting period were both driven by the intelligent display segment, with its revenue share reaching 86%, a 33% increase compared to the same period last year. In the intelligent display business, overseas markets accelerated their recovery from the second half of last year, achieving a 56% year-on-year growth by the end of the first quarter, with its share rising to 36%.

During the reporting period, Leyard provided LED display and broadcast control system services for the opening and closing ceremonies of the Beijing Winter Olympics and Winter Paralympics, ensuring the perfect presentation of these grand events. The stage for the Winter Olympics opening ceremony consisted of a floor screen, Ice Cube, ice waterfall, and north-south stand screens, with a total area of approximately 14,500 square meters, making it the largest LED screen in the world. Leyard supplied approximately 10,000 square meters of LED screens, accounting for about 70% of the total display area. In addition, Leyard provided visual effects support for the three major operational centers, four national-level venues, and eight command centers of the Winter Olympics.

Looking ahead to 2022–2024, the company’s development strategy is positioned as “Technology Leadership, Industry Layout, Expanded Applications”:

Technology Leadership: To prepare for the large-scale application market of the Micro LED era, the company will continue to increase its investment in Micro LED technology. Through independent R&D, collaborative R&D, equity investments, and other approaches, we will continuously overcome technical challenges and lead technological innovation and development in the global display industry.

Industrial Layout: To continuously enhance the company's core competitiveness and reduce production costs, the company will implement its industrial layout across upstream and downstream segments of the supply chain through various methods such as investment, joint ventures, and cooperation.

Expand applications: Broaden the application areas of LED display products, including but not limited to LED all-in-one conference displays, outdoor fine-pitch displays, highly immersive display solutions, VR experiences, and the metaverse.

Absen

In the first quarter of 2022, Absen achieved revenue of RMB 493 million, a year-on-year (YoY) increase of 34.42%; net profit attributable to shareholders of the listed company was RMB 19.4554 million, up 177.17% year-on-year (YoY), turning losses into profits.

In its early April earnings forecast, Absen stated that signed orders in the first quarter reached approximately RMB 710 million, a year-on-year (YoY) increase of about 37% compared to RMB 520 million in the first quarter of 2021. Among these, overseas market signed orders amounted to RMB 370 million, up 61% YoY; domestic market signed orders totaled RMB 340 million, up 17% YoY.

In the first quarter, overseas market revenue accounted for 60.1% of Absen's total Revenue. In previous investor relations activity records, Absen stated that the overseas pandemic situation might see a turning point in 2022, with the market expected to recover. If normal life resumes abroad, various LED large-screen application scenarios will gradually restart and are expected to achieve rapid growth. Over the next three years, Absen will continue to focus on its LED display business.

In addition, Absen stated in its previous earnings forecast that logistics disruptions and other consequences caused by factors such as the epidemic in Hong Kong and Shenzhen and the Russia-Ukraine war resulted in approximately RMB 70 million of revenue not being recognized in the first quarter. This portion of revenue will be gradually realized in the coming months.

MOSO Power

In Q1 2022, MOSO Power achieved revenue of RMB 338 million, a year-on-year (YoY) increase of 1.76%; net profit attributable to shareholders of the listed company was RMB 9.6379 million, a year-on-year (YoY) increase of 6.80%.

Sanan Optoelectronics

Sanan Optoelectronics released its Q1 2022 report. The company achieved revenue of RMB 3.107 billion in the first quarter, a Year-on-year (YoY) increase of 14.35%; net profit attributable to shareholders of the listed company was RMB 429 million, a Year-on-year (YoY) decrease of 22.94%.

Sanan Optoelectronics stated that, affected by pandemic control measures, annual maintenance, and adjustments in downstream customers' schedules, its integrated circuit business achieved revenue of RMB 620 million and net profit of RMB 152 million. The filter business was impacted by the pandemic, preventing some customers from successfully completing factory audits and affecting shipments, resulting in sales revenue of only RMB 16 million. According to preliminary communications with customers, this shortfall will be gradually made up as the impact of the pandemic subsides.

In the first quarter, the company's inventory increased by RMB 712 million compared to December 31, 2021, including an increase of RMB 150 million in raw materials, RMB 139 million in work-in-progress, RMB 65 million in semi-finished goods, and RMB 358 million in finished goods. The increase of RMB 358 million in finished goods comprised RMB 230 million from the LED epitaxy chip business, RMB 99 million from the integrated circuit business, and RMB 29 million from the LED application products business.

Changelight Optoelectronics

Changelight Optoelectronics released its Q1 report, stating that in the first quarter of this year, the company achieved revenue of RMB 403 million, a year-on-year (YoY) decrease of 7.84%; the net profit attributable to shareholders of the listed company was a loss of RMB 7.1997 million, a year-on-year (YoY) decrease of 116.66%.

It is reported that in the first quarter of 2022, Hisense Visual Technology newly acquired 109.95 million shares of Changelight Optoelectronics. As of March 25, 2022, Hisense Visual Technology held a total of 106.74 million shares of Changelight Optoelectronics, accounting for 12.29% of the company's total share capital, becoming the company's largest shareholder.

On March 8, Changelight Optoelectronics finalized the raising of RMB 1.5 billion through a private placement of shares to specific investors. The funds raised will be primarily invested in the R&D and manufacturing projects for Mini/Micro LED and high luminous efficacy LED chips. Upon completion, the project will add an annual production capacity of 6.36 million units of Mini LED BLU, Mini LED GB, Micro LED chips, and high luminous efficacy LED chips.

BPS

In the first quarter of 2022, BPSemi achieved revenue of RMB 302 million, a year-on-year (YoY) decrease of 25.93%; the net profit attributable to shareholders of the listed company was a loss of RMB 11 million, a decrease of 116.60% compared to the same period last year, turning from profit to loss.

BPSemi stated that the main reasons for the decline in product sales during the reporting period are as follows:

① Since 2021, affected by the global pandemic, international sea freight and other logistics delivery times have been significantly delayed. Overseas customers have adopted the practice of placing orders and stocking up in advance to ensure product delivery, resulting in a rigid increase in overall inventory levels in transportation and manufacturing. Secondly, working from home has further stimulated end-user demand for certain consumer products. Combined with the fact that upstream supply expansions, such as wafer production capacity, require a certain time cycle, the overall chip market is in a state of shortage. Expectations of price increases have prompted downstream customers to strengthen their willingness to stock up. The above reasons objectively resulted in stockpiling in the first three quarters of 2021 that exceeded terminal market demand. Starting from the fourth quarter of 2021, downstream customers' demand for the company's products decreased significantly in order to digest previous inventory, which continued to affect the company's product sales volume in the first quarter of this year.

② In the first quarter of 2022, the global rampage of the Omicron virus and its spread within China had a certain impact on domestic logistics and production activities across the upstream and downstream of the supply chain. Starting in mid-March, the Shanghai area where the company headquarters is located was severely affected by the epidemic, and logistics restrictions posed certain challenges to product sales.

③ In the first quarter of previous years, affected by the Spring Festival holiday shutdown of downstream LED lighting manufacturing, the proportion of annual sales was relatively low. However, in Q1 2021, due to tight upstream wafer production capacity, there was strong stocking demand from downstream customers in the company's industry, resulting in an unusually active off-season. The company's product shipments in Q1 2021 reached 25% of the full-year shipments, a significant increase compared to 19% in 2019 and 16% in 2020. In Q1 2022, the industry's supply-demand imbalance eased, returning to a normal seasonal off-season.

In addition, during the reporting period, BPSemi's gross profit margin decreased by 7.60% Year-on-year (YoY), which was related to raw material procurement prices. During the reporting period, the company's average cost increased by 50.63% compared to the same period last year.

Fuman Micro

In the first quarter of 2022, Fuman Micro achieved revenue of RMB 276 million, a year-on-year (YoY) increase of 3.61%; net profit attributable to shareholders of the listed company was RMB 55.56 million, a year-on-year (YoY) decrease of 9.69%.

Fuman Micro is a driver chip manufacturer. In 2022, the company will accelerate the construction of its Pingshan Packaging and testing factory. Upon completion, the company will add new Packaging production lines for 5G RF chips and related products; and expand the Production capacity for small-pitch LED screens, power management chips, and other chips.

MLS

MLS Co., Ltd. announced its Q1 results, reporting revenue of approximately RMB 3.995 billion in the first quarter of 2022, a year-on-year (YoY) decrease of 10.7%; net profit attributable to shareholders of the listed company was approximately RMB 182 million, a year-on-year (YoY) decrease of 38.65%.

Hongli Zhihui

According to the Q1 2022 report released by Hongli Zhihui, the company achieved total operating revenue of RMB 837 million during the reporting period, a Year-on-year (YoY) decrease of 2.27%; the Net profit attributable to shareholders of the Listed company decreased by 12.97% Year-on-year (YoY).

Refond Optoelectronics

Refond Optoelectronics disclosed its Q1 2022 report, achieving revenue of RMB 309 million, a Year-on-year (YoY) increase of 0.45%; the net profit attributable to shareholders of the listed company was a loss of RMB 3.63 million, turning from profit to loss Year-on-year (YoY), a decrease of 124.72% compared to the same period last year.

Ruifeng Optoelectronics stated that the main reasons for the net loss attributable to shareholders of the listed company during the reporting period were a decline in sales gross profit due to fierce market competition, and an increase in credit impairment losses during the reporting period.

AMEC

In the first quarter of 2022, AMEC achieved revenue of RMB 949 million, a year-on-year (YoY) increase of 57.31%; net profit attributable to shareholders of the listed company was RMB 117 million, a year-on-year (YoY) decrease of 14.94%.

AMEC stated that the main reasons for the growth in Revenue were benefiting from the development of the semiconductor equipment market and the company's product competitive advantages. The revenue from etching equipment in this reporting period was RMB 714 million, a Year-on-year (YoY) increase of approximately 105.03%. However, as revenue from the newly signed large-scale orders for Mini LED MOCVD equipment has not yet been recognized in this period, the revenue from MOCVD equipment was RMB 42 million, a decrease of approximately 68.59% compared to the same period last year.