LED blind expansion of inventory crisis highlights overcapacity

[Text / high-tech LED special correspondent]

In mid-November, Sanan Optoelectronics (600703.SH) highlighted its high-level change announcement, which also revealed the seriousness of the domestic LED upstream inventory crisis.

Although Sanan Optoelectronics only stated in the announcement, for personal reasons, Lin Kezhen applied to resign from the company's directors, general manager positions and related committees of the board of directors. The company decided that Lin Zhiqiang will concurrently serve as the general manager, and Lin Zhiqiang will take over the relevant duties of the board of directors.

“The MOCVD equipment of Sanan Optoelectronics has been fully put into production, but the sales are not smooth, which has formed a large inventory.” A person familiar with the LED industry in Xiamen said. The reporter learned from a number of LED companies that MOCVD equipment began to operate at the beginning of this year due to the availability of the second quarter. On the contrary, the market did not expand as expected, and downstream shipments were not smooth, resulting in a serious inventory crisis in the upstream of LED.

å°´å°¬ under the inventory crisis
However, what is most embarrassing is how to alleviate the inventory crisis upstream of LEDs, which is a very difficult problem to solve. Wang Lianghai, vice president of Tongfang, said that if MOCVD has two furnaces a day, the cost per day is 10,000 US dollars, and it is 300,000 US dollars a month, but it can't be easily stopped. Once the machine is shut down and production is started again, the quality of the product should reach the original level. Generally, it takes another three months. The time for the customer to certify the LED chip and the packaged device may take another three to six months. "The loss can not be estimated."

Perhaps based on this, this year, Sanan Optoelectronics' inventory has been multiplying. Our reporter from Sanan Optoelectronics this year and last year's quarterly earnings report found that Sanan Optoelectronics inventory was only 310 million yuan at the beginning of this year, has grown to 481 million yuan in the first quarter, and once again increased to 670 million yuan in the second quarter, the third quarter is Soaring to 933 million yuan, compared with 310 million yuan at the beginning of the year, the growth has more than tripled. The total revenue of Sanan Optoelectronics in the first three quarters of this year was only 1.169 billion yuan.

According to the statistics of Sanan Optoelectronics in the past two years, the inventory turnover rate (inventory turnover) of Sanan Optoelectronics in the first three quarters of this year was 1.12, compared with 2.27 in the same period of last year; Sanan Optoelectronics inventory turnover rate was 0.92 in the first half of this year. The same period last year was 2.11. The inventory turnover rate reflects the company's sales efficiency and inventory efficiency. The inventory turnover rate decreased year-on-year, indicating that the company's inventory turnover slowed down, the company's sales capacity declined, and the amount of working capital occupied in inventory will also increase.

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