Sanan Optoelectronics, MLS Co., Ltd. and a large number of LED companies release semi-annual reports

Sanan Optoelectronics

Sanan Optoelectronics released its semi-annual report. The company's revenue for the first half of 2022 was RMB 6.762 billion, a Year-on-year (YoY) increase of 10.6%. Among this, the overall LED business generated revenue of RMB 5.300 billion, and the integrated circuit business (consolidating three subsidiaries) generated revenue of RMB 1.462 billion.

Affected by new construction projects, the net profit attributable to shareholders of the listed company during the reporting period was RMB 932 million, a year-on-year (YoY) increase of 5.46%. Among them, Hubei Sanan achieved a net profit of RMB 3 million, Hunan Sanan achieved a net profit of RMB 90 million, and Quanzhou Integrated achieved a net profit of -RMB 87 million.

Regarding the LED business, Sanan Optoelectronics stated that during the reporting period, the overall revenue of the LED epitaxy and chip business decreased by 11.53% year-on-year (YoY), with a gross profit margin of 32.55%, an increase of 6.40 percentage points compared to the same period last year. Among them, the sales revenue of traditional LED epitaxy and chips decreased by 24.10% compared to the same period last year, mainly due to multiple factors such as domestic and international economic instability, recurring epidemics, a sluggish real estate market, and shrinking consumer market demand. The demand in the traditional lighting market was weak, and the sales of some products in the traditional LED sector did not meet expectations.

The business scale in high-end LED segments, including Mini LED, Micro LED, horticultural lighting, automotive lighting, UV, and IR, has further expanded, with sales revenue increasing by 84.80% year-over-year. In particular, the application of Mini LED has been continuously promoted by leading international customers. Shipments to one key customer have grown steadily, while shipments to another customer increased starting in April, with sales volume ramping up month by month, achieving sales revenue of RMB 109 million in the second quarter.

In addition, the domestic demand for the high-power advanced horticultural lighting products developed and manufactured by the company remains stable, and these products have gained favor with international customers. The revenue scale in the company's high-end segment still has significant room for growth. In the future, as the production capacity of Quanzhou Sanan and Hubei Sanan continues to be released, the proportion of high-end products will further increase.

During the reporting period, the Company's LED special application business made significant progress. After Sanan Optoelectronics completed the acquisition of WIPAC, a luxury automotive lighting system supplier, the market share of its intelligent headlamp products in next-generation autonomous vehicles increased. Its customer base expanded into high-end models and new energy vehicles, and its automotive lighting business was introduced to leading domestic brands and top-tier international customers.

In the integrated circuit business, during the reporting period, the company's IC operations covered RF front-end, power electronics, and optical technology, with production capacity gradually expanding according to plan. Currently, GaAs RF production capacity has expanded to 12,000 wafers/month, optical technology capacity to 2,000 wafers/month, Hunan Sanan power electronics SiC capacity to 6,000 wafers/month, and power electronics silicon-based GaN capacity to 1,000 wafers/month.

MLS

In the first half of 2022, MLS Co., Ltd. reported revenue of approximately RMB 8.109 billion, a year-on-year (YoY) decrease of 11.16%; net profit attributable to shareholders of the listed company was approximately RMB 202 million, a year-on-year (YoY) decrease of 68.73%.

MLS Co., Ltd. is an international lighting enterprise that integrates LED lighting brands with LED intelligent manufacturing operations. In terms of brand business, the company owns an overseas brand portfolio represented by "LEDVANCE". Products under globally renowned brands such as "LEDVANCE", "Sylvania", and "Radium" are mainly positioned in the high-end light source and smart home application markets. The product portfolio covers four major segments: residential and office lighting, industrial lighting and industrial lighting systems, smart home business, and healthy lighting.

Currently, the company's brands such as "LEDVANCE" and "SYLVANIA" are mainly distributed in Europe and North America, with market shares ranking among the top three locally. During the reporting period, LEDVANCE brand products achieved a revenue of RMB 4.779 billion, with a gross profit margin of 35.58%.

The "MLS" brand has become a well-known industry name after more than twenty years of refined operation and accumulation in the LED lighting field. During the reporting period, the MLS brand achieved Revenue of RMB 820 million, with a gross profit margin of 22.32%.

In the field of intelligent lighting equipment manufacturing, the company's main light source products include LED fine-pitch displays, Mini LED direct-view displays, Mini LED backlights, SMD LEDs, and Lamp LEDs. In the downstream industry, the company's products are categorized by application areas into commercial lighting, healthy lighting, office lighting, residential lighting, and professional lighting. During the reporting period, MLS Co., Ltd.'s intelligent manufacturing business achieved revenue of RMB 2.351 billion, with a gross profit margin of 17.17%.

According to the semi-annual report, its performance drivers are mainly:

As the pandemic situation in overseas markets normalized, economic and cultural activities in Europe, the United States, and emerging growth economies returned to normal, with downstream demand being steadily released. After years of integration, LEDVANCE’s brand and (Sales) channel have formed synergies with the domestic supply chain. LEDVANCE’s operations have stabilized, and its profitability continues to improve. Driven by the recovery of demand in Europe and the United States, LEDVANCE’s business continued to contribute steadily to Revenue and profits during the reporting period.

In addition, during the reporting period, on the one hand, MLS Co., Ltd. brand business continued to expand into new (Sales) channel markets, adjusted business strategies in a timely manner according to market conditions, and strengthened operations and follow-up channel services; on the other hand, MLS Co., Ltd. brand business continued to launch new products, expanding into new categories for various commercial and residential scenarios based on lighting products.

In terms of intelligent manufacturing, during the reporting period, the company continued to strengthen its LED packaging products and related material manufacturing business, updated production process technologies, accelerated the upgrade of digital production workshops, and improved production efficiency and product quality. It continuously increased the production capacity for small-pitch display LEDs and display modules.

Refond Optoelectronics

Ruifeng Optoelectronics' revenue in the first half of 2022 was approximately RMB 649 million, a Year-on-year (YoY) decrease of 9.6%; net profit attributable to shareholders of the listed company was approximately RMB 17.2 million, a Year-on-year (YoY) decrease of 50.82%.

During the reporting period, the company identified Mini LED, UV LED, IR LED, automotive electronics, and laser light sources as new growth drivers. It actively expanded its presence in emerging display applications and high-end specialized application fields to create new business and profit growth points, achieving a strategic transformation from component manufacturing to a comprehensive Solution provider.

Regarding the display LED business: The company's display LED portfolio includes LCD backlight LEDs, CHIP LEDs, RGB LEDs, and Mini LEDs. During the reporting period, sales revenue from the display LED business amounted to RMB 317,470,458.00, a year-on-year (YoY) decrease of 4.3%, accounting for 48.88% of the main operating revenue. The production capacity during the reporting period was 5,391.64KK, with a gross profit margin of 14.66%, representing a year-on-year (YoY) decrease of 4.85 percentage points. The decline in gross profit was mainly due to reduced sales volume caused by shrinkage in the consumer market, which also affected internal production capacity, leading to increased costs and a subsequent drop in gross profit.

In the lighting LED business: During the reporting period, the company's lighting LED sales amounted to RMB 211,929,681, a Year-on-year (YoY) decrease of 21.11%, accounting for 32.63% of the main operating revenue. The production capacity during the reporting period was 15,087.5KK, with a gross profit margin of 5.76%, representing a Year-on-year (YoY) decrease of 8.58%. The decline in gross profit was mainly due to reduced sales volume caused by shrinkage in the consumer market, which also affected internal production capacity, leading to increased costs and a subsequent drop in gross profit.

Other LED business: The company's other LED products include automotive LED, infrared LED, ultraviolet LED, and laser projection business. During the reporting period, sales revenue from other LED business was RMB 104,977,673, a Year-on-year (YoY) increase of 11.95%, with a gross profit margin of 27.06%, a Year-on-year (YoY) decrease of 1.92%. The growth in performance was mainly due to the increase in automotive business performance, while the decline in gross profit was mainly due to price decreases caused by industry competition.

ST Dehao

ST Dehao's revenue in the first half of 2022 was approximately RMB 711 million, a year-on-year decrease of 27.15%; the net profit attributable to shareholders of the listed company was a loss of approximately RMB 157 million.

The company's main business is currently divided into the home appliances segment and the LED packaging segment. The home appliances segment is an advantageous industry where the company has cultivated deep expertise over many years, and it serves as the company's pillar industry, accounting for approximately 90% of the total annual revenue. It is primarily engaged in the research and development and manufacturing of small home appliance products, with a focus on kitchen appliances.

Another core business is LED packaging. After LED chips are packaged, they are used in downstream applications such as LED lighting and displays. The company's main products include mobile phone flash units, OEM automotive headlights and aftermarket taillights, backlight sources, and outdoor lighting.

In the first half of 2022, the company's total revenue decreased by 27.15% compared to the same period in 2021. Among them, overseas revenue reached RMB 526.8677 million, a decrease of 28.67% compared to the same period in 2021. The main reason is that during the reporting period, the company optimized and adjusted its small home appliance business, abandoning some low-margin products. At the same time, the decline in overseas market demand led to a decrease in revenue from the small home appliance business and a corresponding reduction in operating costs.

The net profit attributable to shareholders of the listed company, after deducting non-recurring gains and losses, was -166.4042 million yuan, representing a reduction in loss of 28.8571 million yuan compared to the same period in 2021. The main reasons for the changes in the above financial indicators are: the rapid appreciation of the RMB against the US dollar and the significant rise in bulk raw material prices have had a major impact on the profitability of the company's products in the short term; additionally, after the cessation of LED-related business operations, relevant idle assets that have not yet been disposed of still require depreciation and amortization of fixed assets and intangible assets, as well as payment of necessary maintenance costs, resulting in significant losses for the company.

ST Dehao stated that the company has actively taken corresponding measures to respond: on one hand, the company continues to absorb the pressure of rising costs by developing new products, improving production efficiency, integrating its small home appliance business, optimizing personnel, and strictly controlling expenses; it also uses appropriate financial instruments to mitigate the risk of exchange rate fluctuations. On the other hand, it is negotiating with overseas customers to adjust prices for existing products, although the effect of price adjustments has a certain lag. Finally, regarding LED-related assets, the company will continue to promote the disposal and monetization of idle assets, integrate existing assets, continue to clear inventory, recover funds in a timely manner, and reduce operating costs.

In the LED packaging business, the second half of 2022 will focus on niche segments such as automotive lighting, flashlights, and backlights, enhancing quality assurance. With the recent surge in oil prices, a wave of micro electric vehicles has swept through cities. The company possesses mature and stable automotive lighting R&D technology, and is poised to make the micro electric mobility vehicle segment another profit growth point.

Silan Micro

In the first half of 2022, Silan Micro achieved Revenue of RMB 4.185 billion, a Year-on-year (YoY) increase of 26.49%; and Net profit attributable to shareholders of the Listed company of RMB 599 million, a Year-on-year (YoY) increase of 39.12%.

Silan Micro's main products include three major categories: integrated circuits, discrete semiconductor devices, and LED products. During the reporting period, revenue from all three product categories achieved growth.

Among them, the revenue from light-emitting diode (LED) products (including LED chips from Silan Mingxin and Silan Mingjia, and LED color screen pixel tubes from Meikale Optoelectronics) was RMB 364 million, a year-on-year (YoY) increase of 23.75%.

Silan Micro stated that, affected by the pandemic and slowing downstream demand, domestic LED chip market demand was relatively weak. The production capacity utilization rate of its subsidiary Silan Mingxin's LED chip production line declined to a certain extent. Meanwhile, falling LED chip prices led to increased provisions for inventory impairment losses, resulting in operating losses for Silan Mingxin.

Despite unfavorable market conditions, Silan Mingxin is striving to increase its market share of LED color display chips while accelerating the development of high-luminance LED lighting chips to rapidly enter mid-to-high-end chip markets such as automotive lighting and landscape lighting.

In the first half of the year, driven by rising demand for mid-to-high-end LED color displays in overseas markets, the revenue of the Company's subsidiary, Meikale Optoelectronics, increased by 37.48% year-on-year. Among these, Meikale's small-pitch products, "4-in-1" products, and "1515" series products experienced rapid growth.

Silan Mingjia, an affiliate of Silan Microelectronics, saw its H1 [[6. LED 与半导体照明]] output fall short of expectations, with [[17. 产业与经济常用词]] utilization significantly below target. However, by strengthening alignment with market demand, enhancing product performance, and stabilizing mass production of new products, chip output has gradually increased. Currently, Silan Mingjia has established a [[17. 产业与经济常用词]] of 72,000 4-inch [[6. LED 与半导体照明]] wafers per month. Going forward, it will accelerate expansion into mid-to-high-end applications such as small-pitch [[6. LED 与半导体照明]], [[1.3 技术缩写与型号（各语言通用，保留原文）]] [[6. LED 与半导体照明]], and automotive [[1.3 技术缩写与型号（各语言通用，保留原文）]].

Pak Lighting

In the first half of 2022, Sanxiong Aurora's revenue was RMB 1.101 billion, a year-on-year (YoY) decrease of 1.32%; net profit attributable to shareholders of the listed company was approximately RMB 65.34 million, a year-on-year (YoY) decrease of 9.30%.

Pak Lighting is mainly engaged in the R&D, production, and sales of LED luminaires, lighting sources, and lighting control products, providing customers with comprehensive lighting solutions and related professional services. The company's product applications cover commercial lighting, office lighting, industrial lighting, residential lighting, outdoor lighting, etc.

The company's wholly-owned subsidiary, Guangdong Sanxiong Aurora Lighting Engineering Co., Ltd., has launched outdoor lighting EPC services, possessing integrated comprehensive service capabilities for outdoor lighting projects, from scheme design and product supply to construction, installation and commissioning, and project handover.

Pak Group stated that due to the impact of the pandemic, domestic economic growth slowed in the first half of the year, with a significant decline in macroeconomic performance especially in the second quarter, which greatly impacted overall demand in the lighting industry. The Shanghai outbreak in the second quarter significantly affected business operations and logistics transportation in the company's East China region. As a result, the company's total Revenue for the first half decreased by 1.32% Year-on-year (YoY). In addition, the company expanded its marketing and R&D teams in line with new operational goals, increased investment in information technology infrastructure, and saw rising marketing and administrative expenses, leading to a Year-on-year (YoY) decline in Net profit for the first half.

In addition, e-commerce, overseas, and hardware businesses achieved relatively fast Year-on-year (YoY) growth. In the home lighting segment, Revenue from project departments such as industrial lighting, public spaces, and hotel lighting within the commercial lighting segment continued to grow Year-on-year (YoY), while Revenue from project departments such as municipal transportation, smart emergency, electrical products, and real estate within the commercial lighting segment declined Year-on-year (YoY).

During the reporting period, Pak continued to improve and optimize its channel and dealer system under the "1+N" model, recruiting dealers with corresponding competitive advantages to supplement and enhance the company's channel system. In the first half of the year, the company established 114 new terminals in the commercial sector, 138 new terminals in the residential sector, 21 new comprehensive terminals, and over 1,000 new hardware channel terminals.

Qinshang Shares

In the first half of 2022, Qinshang Shares' revenue was approximately RMB 434 million, a year-on-year decrease of 32.05%; the net profit attributable to shareholders of the listed company was approximately RMB 93.5541 million, a year-on-year increase of 236.87%.

During the reporting period, the company was mainly engaged in semiconductor lighting business, focusing on the R&D, production, and sales of smart lighting, outdoor lighting, landscape lighting, and outdoor courtyard products. During the reporting period, the semiconductor lighting business segment overcame the impact of exchange rate fluctuations and domestic and international epidemics on orders and supply chains, achieving revenue of 311 million yuan, a year-on-year increase of 4.6%.

In recent years, the company has gradually focused comprehensively on the smart lighting sector and outdoor courtyard product sector, establishing landscape lighting as one of its core business areas. It has launched a rich and comprehensive product matrix, demonstrating its strength in the field of landscape lighting applications through multiple large-scale projects.

Especially in terms of smart lighting market layout, as early as 2012, the company began R&D of cutting-edge application technologies and products such as smart cities and optical communications. Leveraging its advantages in outdoor lighting, it focused on practical applications of "comprehensive urban smart city networks based on smart streetlights", developing related products for smart cities, smart transportation, and smart security carried by street lights, further strengthening the core competitiveness of its main business.

After years of technological innovation and practical scenario applications, the company has accumulated extensive service experience in smart transportation, smart urban management, smart security, and smart lighting, demonstrating strong growth potential in the field of smart city construction and applications. With the company's continued R&D and market expansion, demand is expected to gradually increase, driven by the national 5G new infrastructure initiative.

In addition, regarding the education and training business, since the introduction of the "Double Reduction Policy," the Company has actively implemented it and gradually phased out related businesses. As of the end of the reporting period, the Company has completely divested from off-campus education and training businesses and will no longer engage in such activities. The "Double Reduction Policy" has been fully implemented, removing policy obstacles to the Company's development.

Aike Shares

Aike Shares' revenue in the first half of 2022 was approximately RMB 357 million, a year-on-year (YoY) decrease of 37.93%; net profit attributable to shareholders of the listed company was approximately RMB 3.5778 million, a year-on-year (YoY) decrease of 91.38%.

Aike shares stated that, after years of development, the company has accumulated rich project experience in smart control systems, smart landscape lighting, and smart road lighting. The company is the designated supplier for the China Pavilion at the Dubai Expo, a main provider of outdoor smart lighting cloud control platforms and products for the Wuhan Military World Games, a main provider of themed lighting control systems and products for the Qingdao SCO Summit, and a main provider of point light source products and control systems for the Qianjiang New City themed lighting at the Hangzhou G20 Summit... It is also a main provider of control systems and products for overall lighting projects in more than 30 large cities, including Beijing, Shanghai, Guangzhou, Chongqing, Tianjin, Nanjing, Nanchang, Haikou, and Fuzhou.

In the area of smart energy-saving photovoltaics, the company improves the luminous efficacy of luminaire products while meeting the needs of application lighting scenarios. By combining self-developed control technology to achieve energy saving goals, it responds to the national "dual carbon" standards. Developed photovoltaic products include: solar point light sources, solar linear lights, solar wall washers, solar floodlights, solar flood lamps, solar spotlights, and solar pathway lights.

Tai Long Shares

In the first half of 2022, Tailong Shares' revenue was approximately RMB 1.475 billion, a year-on-year (YoY) decrease of 46.08%; net profit attributable to shareholders of the listed company was approximately RMB 37.9857 million, a year-on-year (YoY) decrease of 49.55%.

During the reporting period, the company's main business was semiconductor distribution, supplemented by commercial lighting. Meanwhile, the company is actively transforming into an innovative technology enterprise. Semiconductor distribution is a new business segment added after the company completed the Acquisition of Bosida in 2020. The main business involves semiconductor distribution related to wireless communications and consumer electronics. Products are mainly applied in wireless communications, consumer electronics, and industrial IoT fields, with mobile phone RF front-end chips as the core. It has now become the main source of the company's Revenue.

The commercial lighting business primarily provides customers with integrated commercial lighting solutions that combine lighting design, development and manufacturing, and comprehensive system services. Main products include three categories: lighting fixtures, LED displays, and optoelectronic signage.

By business segment, the semiconductor distribution segment achieved revenue of RMB 1,274,858,200, a decrease of 49.56% compared to the same period last year; during the reporting period, net profit was RMB 37,865,800, a decrease of 43.75% compared to the same period last year.

The company's commercial lighting business segment achieved total operating revenue of RMB 200.2686 million, basically flat compared to the same period last year; net profit was RMB 119,900, a decrease of 98.50% compared to the same period last year. In the first half of 2022, affected by the recurring domestic epidemic, the company's production and transportation were restricted, and the decrease in production capacity utilization led to an increase in the unit manufacturing cost of products; at the same time, some new factory buildings have been put into use in recent years, and new production equipment has been purchased for the new factory buildings to break through the original production capacity bottleneck. In addition, the company continues to promote information construction. Although these matters are beneficial to the long-term development of the company, they still keep the fixed management costs of the company at a high level in recent years. Combining the above factors, the profitability of the company's commercial lighting segment business was low during this reporting period.

Luoman Shares

Luoman Shares' revenue for the first half of 2022 was approximately RMB 88.863 million, a year-on-year decrease of 64.84%; net profit attributable to shareholders of the listed company was approximately RMB 19.1709 million, a year-on-year decrease of 58.19%.

Roman Holdings stated that the main reasons were: affected by the COVID-19 pandemic, demand for landscape lighting declined. From March to June, the recent COVID-19 outbreak in Shanghai significantly impacted the company's business expansion, causing some projects to halt and project cycles to extend, resulting in an overall decline in revenue and profitability below expectations.

Roman Shares' main business includes overall planning and detailed design of landscape lighting, construction of landscape lighting projects, and other services such as remote centralized control management. In the first half of the year, while fully implementing epidemic prevention and control measures, the company's management deeply advanced the "One Core, Two Wings, Six Sectors" strategic layout: with landscape lighting as the core, technology and creativity as the wings for sustainable development, forming six synergistic business sectors: design consulting, urban renewal, urban operations and maintenance, cultural creativity, energy saving and environmental protection, and digital technology.

During the reporting period, the Company leveraged Chengdu and Kunming as strategic breakthroughs, focusing on cultural tourism and night-time urban renewal. The first immersive themed night tour project was successfully launched, further enhancing regional market competitiveness and laying a solid foundation for reversing the unfavorable business performance in the first half of the year and maintaining business stability.

Virtual and real coexistence: the first immersive themed night tour project launched