ST Ganhua (000576), which used papermaking as its main business, has taken another step towards the LED industry. Yesterday (December 14), the company issued a notice saying that it approved the wholly-owned subsidiary of Guangdong Deli Photoelectric Co., Ltd. to invest 83.59 million yuan in the Jiangmen National High-tech Industrial Development Zone to build LED epitaxial wafer production project.

The company is looking forward to the future LED business. However, the market is worried that ST Ganhua is too optimistic about the profitability of LED projects.

Continuous loss transformation LED

ST Ganhua is a veteran listed company in Jiangmen City, Guangdong Province. It used to be a paper and biochemical product. In September this year, Delixi Group became the largest shareholder.

ST Ganhua Financial Report shows that in 2009, the company's operating income was 486 million yuan, although the net profit was 12.9433 million yuan, but the operating profit was -49.695 million yuan. In 2010, the company's operating income fell to 390 million yuan, net profit. It is -7,721.20 million. In the first three quarters of this year, the company achieved operating income of 307 million yuan and net profit attributable to shareholders of the parent company of -41.31 million yuan.

The pulp and paper business has suffered losses in successive years. Obviously, ST Ganhua hopes to seek change. In fact, as early as February of this year, ST Ganhua announced the announcement of the growth and transformation of the optoelectronic industry.

For the future of the LED project, ST Ganhua seems to be full of confidence.

The company announced that it will invest 83.59 million yuan to build 20 LED epitaxial wafer production lines and supporting chip production lines for MOCVD (LED main production equipment) equipment. After the project is completed and put into production, it will form an annual output of 960,000 high-brightness blue-green LED epitaxial wafers. And the production capacity of the chip can achieve an annual sales income of 834 million yuan.

Epitaxial chip capacity is not fully released

The reporter roughly estimated that the annual production capacity of 960,000 pieces of 20 equipment means that the capacity of one piece of equipment should reach 4,000 pieces per month. Zhang Xiaofei, dean of the High-tech LED Industry Research Institute, said in an interview that since the equipment is cleaned and maintained every month, the actual production time is only about 25 days, so that one piece of equipment has a capacity of 160 pieces per day.

It is understood that mainstream MOCVD now ranges from 6-piece machines to 12-piece machines to 49-piece machines. 160-piece means that three-piece epitaxial chips are produced every day with 49-piece machines.

A representative of the securities company of a listed LED company in China, who told not to be named, told reporters that one of his company's equipment produced an average of 2.5 to 3 furnaces per day.

Obviously, the production capacity of 960,000 pieces is calculated at the best. According to the reporter's understanding, the current production capacity of many LED epitaxial chip companies in China has only reached 40% to 60% of the full capacity.

In terms of sales revenue, even with 960,000 pieces, the sales revenue of 834 million yuan is 868.75 yuan per piece. The above-mentioned securities representative of the listed company told reporters that the average price of the market is now between 400 yuan and 650 yuan. Zhang Xiaofei also confirmed to reporters that the price of domestic LED epitaxial chips is around 500 yuan. In this regard, ST Ganhua Securities said that the company's estimated data was obtained from a professional agency's feasibility report.

In fact, a more serious problem is that the production capacity of epitaxial chips has not been fully released yet, and it will face severe challenges when the ST Gansu LED project is put into production.

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