Risk of delisting? What happened to this UV LED company's performance?
Recently, wafer and component manufacturer SemiLEDs Corp announced revenue of $886,000 for the second quarter of fiscal year 2024 (ended in late February), nearly halving from the previous quarter's $1.65 million, with gross margin dropping from 15% to 13%.
SemiLEDs expects revenue to rebound to approximately $1 million +/-10% in the third fiscal quarter of 2024 (ended in late May).
It is understood that on July 11, 2023, SemiLEDs received a notice from the Nasdaq Stock Market indicating that it did not meet the minimum stockholders' equity of $2.5 million required for continued listing under Nasdaq Listing Rule 5550(b)(1), or the market value of listed securities or net profit from continuing operations as an alternative.
In accordance with the Listing Rules, SemiLEDs submitted a plan to regain compliance. Nasdaq accepted the plan and granted the company an extension until January 8, 2024. According to the Form 8-K filed by the company on January 9, 2024, Nasdaq determined that it complied with Rule 5550(b)(1) of the Listing Rules. However, if SemiLEDs fails to demonstrate compliance when filing its next periodic report, it may be delisted. Based on shareholders' equity in the second fiscal quarter, SemiLEDs believes it meets the minimum shareholders' equity requirement.
In addition, the company underwent a new round of adjustments to its business structure and product strategy in 2013, and acquired Taiwan Semiconductor Lighting in 2014. The two parties complemented each other's advantages in , commercial lighting, automotive LED lighting, and other areas, further expanding their presence in the mainland China LED market.
According to previous reports by foreign media, CrayoNano AS, a Norwegian semiconductor company focused on nanotechnology, signed a cooperation agreement with SemiLEDs, a Taiwan-based LED chip and component manufacturer, to jointly develop next-generation UVC-LED chip products for the disinfection market.
SemiLEDs primarily develops, manufactures, and sells LED chips and LED components for general lighting applications, including street lights and commercial, industrial, system, and residential lighting, as well as special industrial applications such as ultraviolet (UV) curing, medical/cosmetic, counterfeit detection, horticulture, architectural lighting, and entertainment lighting.
In addition, internationally renowned lighting manufacturer Acuity Brands and leading LED chip enterprise Azure Lithium Core recently released their financial reports.
1 Acuity Brands
On April 3, 2024 (U.S. time), Acuity Brands released its financial results for the second quarter of fiscal year 2024, ended February 29. The report showed that Acuity Brands' net sales for the second quarter were $905.9 million (approximately RMB 6.553 billion), a decrease of 4.0% Year-on-year (YoY).
In its earnings report, Acuity Brands stated that the company achieved satisfactory performance in the second quarter of fiscal 2024. The company successfully increased adjusted operating profit, operating margin, and . It also generated strong free cash flow and effectively allocated capital to create value.
The report shows that in the second quarter of fiscal 2024, Acuity Brands' operating profit reached $118.1 million (approximately RMB 854 million), an increase of 5.9% Year-on-year (YoY). Operating profit as a percentage of net sales was 13.0%, an increase of 120 basis points compared to the same period last year. Adjusted operating profit was $140.1 million, up 6.1% Year-on-year (YoY). Adjusted operating profit as a percentage of net sales was 15.5%, an increase of 150 basis points compared to the same period last year.
In terms of business segment performance, Acuity Brands' Lighting and Lighting Controls (ABL) business reported net sales of $843.5 million in the second quarter, a decrease of 5.3% Year-on-year (YoY), while operating profit reached $126.0 million, an increase of 1.9% Year-on-year (YoY).
The operating profit margin of the ABL business was 14.9% of net sales, an increase of 100 basis points year-on-year. The adjusted operating profit for the ABL business was USD 136.4 million, an increase of USD 3.1 million or 2.3% year-on-year. The adjusted operating profit margin for the ABL business was 16.2% of net sales, an increase of 120 basis points year-on-year.
2 Azure Lithium Core
In 2023, Azure Lithium Core's LED business performed remarkably, achieving revenue of approximately RMB 1.240 billion during the reporting period, a year-on-year increase of 10.04%.
The announcement stated that since the second half of 2023, signs of recovery in downstream application market demand for LED have emerged, and the series products have also begun to gradually increase in volume, with the overall market environment improving. Huai'an Shunchang achieved a turnaround from loss to profit, realizing a net profit attributable to shareholders of the listed company of approximately RMB 0.04 billion.
There are currently signs of warming in the LED chip industry. The company has been adjusting the product structure of its LED business, focusing on high-end products such as display backlights, and maintaining leading competitiveness in the Mini LED field. Supported by the recovery in downstream demand for LED chips, the production capacity of LED products increased by 89.35% to 13,721,577 units during the reporting period, with sales volume reaching 10,537,755 units. The gross profit margin of LED products also improved, increasing from 13.11% in 2022 to 13.51% in 2023. The announcement stated that the company continues to implement its strategic development plan to promote the transformation of its LED business from the general lighting sector to the display sector.
It is understood that Azure Lithium Core is mainly engaged in three major businesses: lithium batteries, LED chips, and metal logistics distribution. Among them, the LED business is mainly engaged in the R&D and manufacturing of LED products, possessing a complete industry chain from sapphire substrate cutting, grinding, and polishing, PSS, epitaxial wafers, LED chips, to CSP special packaging. Azure Lithium Core pointed out that the company is equipped with advanced and chip manufacturing equipment within the industry, with its technical level, production capacity scale, and cost control ranking among the forefront of the industry, making it one of the main domestic LED chip suppliers.
Source: Comprehensive compilation from Hangjia Shuo UV, LEDinside, etc.
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