On November 22nd, Guangdong Ganhua announced that it would continue to publicly transfer 100% of the equity and creditor's rights of Deli Optoelectronics. After evaluating the current situation of Deli Optoelectronics and considering market reactions from previous listings, the company has decided to lower the starting price for the 100% equity and its 230 million yuan in credit to 300 million yuan.
The company stated that the poor financial performance of Deli Optoelectronics has placed a significant burden on its overall financial health and operational results. Given the current operating conditions, it is unlikely that the company will turn a profit in the following year. Selling the 100% equity and related creditor's rights at a price below the evaluation value may result in some losses, but it will help avoid long-term negative impacts from continued losses at Deli Optoelectronics.
In addition, Guangdong Ganhua has clearly outlined its strategic direction towards the big health sector. The company emphasized that Deli Optoelectronics does not align with its long-term business plan and that selling its stake will allow the company to focus more effectively on industrial transformation and development.
It was reported that in 2011, Guangdong Ganhua, which originally focused on sugar, pulp, paper, and biochemical products, made a high-profile entry into the LED industry. In its 2013 annual report, the company highlighted that Deli Optoelectronics produced high-brightness and ultra-high-brightness LEDs, which were seen as key components of future LED growth with strong market potential. The company aimed to build an integrated LED industry chain through epitaxial wafer and chip production projects to strengthen its position in the industry.
However, the development of the LED business did not go as planned. The LED epitaxial wafer project at Deli Optoelectronics, which started in the second half of 2014, failed to meet expected progress in its first year. By January to June 2015, large-scale production had been halted by the listed company. Over the years, Deli Optoelectronics reported net losses of -20.75 million yuan in 2014, -53.39 million yuan in 2015, and a further loss of 92.82 million yuan in 2016. Although there was some improvement in the first half of this year, the company still recorded a loss of 16.45 million yuan.
Currently, the LED industry is becoming increasingly concentrated. Major players such as Huacan Optoelectronics, Mulinsen, Honglizhihui, Guoxing Optoelectronics, and Sanxiong Aurora have been steadily increasing their market share, leading to a more consolidated industry landscape. Many companies have either collapsed or undergone restructuring. This year, Qinshang Shares established a semiconductor business focusing on education, while companies like Landing International, Polyfluoride, and Guangdong Ganhua have divested their LED operations.
As the LED industry continues to consolidate, more competitive companies are likely to be eliminated. For listed companies with small or declining LED businesses, exiting or divesting these operations has become an unavoidable choice. This trend reflects that the LED lighting industry is entering a new phase of development.
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