Jingdian, Guangjia will discuss the short-term difficulties in the share conversion case

Jingdian and Guangjia will hold a temporary shareholders meeting on September 28 to discuss the share conversion case. After 100% of the company holds Guangjia, the MOCVD machine mastered by Jingdian will increase to 280~300 units, ranking the second largest out-of-band plant in the world, and the scale of revenue will also expand. However, before the Guanggao operation was improved, the profit performance of Jingdian in the short term may be dragged down by Guangzhou and Guangxi. Once the technology level of Guanggao is improved and the profit is turned into profit, the long-term benefits of the merger will appear.

Jingdian and Guangjia had a strategic alliance as early as 2010. With the proportion of total shareholding of Jingdian gradually reaching about 51%, the crystal power team has already entered Guangzhou Gallium for the transformation of capacity, technology and production efficiency, but Control is still limited. Affected by the poor economy this year, Guangjiao’s losses in the first half of the year amounted to NT$844 million, while Jingdian recognized a loss of approximately RMB430 million.

Industry analysis Starting from next year, Jingdian can maximize the efficiency of Guanglu through the full authorization of technology, and thus improve the overall technical level, and the two product lines will complement each other, but still need time to adjust, in the short term Guangguang is only likely to lose losses, it is difficult to turn losses into profits quickly, and the shareholding of Jingdian will increase from 51% to 100%. It is estimated that the impact of Guanglu's losses will increase next year.

However, in the long run, Jingdian will directly master 280~300 MOCVD machines (220~230 sets of crystal power and 60~70 sets of Guangjiao), and the market economy will increase again, which will further strengthen the company's LED industry in the world. The status of the indicator, and part of the operating expenses are also expected to decrease. Once the level of technology in Guangbiao is improved and the profit is turned into profit, the long-term benefits of the merger will be more obvious.

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