BDO Runda's 2014Q1 performance is lower than expected

In the first quarter of 2014, BDO Runda achieved revenue of RMB 766 million, an increase of 8.56% year-on-year, and a net profit attributable to listed companies of RMB -35.66 million. Both revenue and profit were lower than expected.

The reasons for the lower-than-expected results include: (1) Decline in sales prices of LED products and decline in gross profit margin; (2) Increase in interest expenses due to corporate bonds issued by the company, financing of acquisition of shares in NVC, and gradual conversion of construction in progress, etc. Financial expenses have increased significantly.

The supply and demand relationship of LED chips remains tense. It is expected that the sufficient supply and demand ratio of LED chips will be 3% in 2014. BDO Runda has already arrived 92 sets of MOCVD equipment, but the operating rate is only about 50%. Looking forward to the recovery of the industrial boom, the company's MOCVD capacity utilization rate will gradually increase, and in 2014, it has the potential to exert greater flexibility.

The cooperation between BDO Runda and NVC Lighting in the lighting business includes NVC Lighting's ownership of its NVC trademark and BDO Brand Runda's use in LED light source products, and the use of LED lighting products by NVC. Open its sales channels. With the help of the NVC brand and channel, BDO Runda lighting business has started to accelerate in 2013Q4 and is expected to continue to increase volume in 2014.