Xiamen Xinda: LED business is in line with policy-oriented overcapacity

Xiamen ICT (000701.SZ), the leading stock of the Internet of Things concept, recently announced a private placement announcement. The company plans to issue additional shares to a specific investor within 10, raising no more than 700 million yuan for the Anxi LED package new project, Xiamen LED application. Product expansion projects, RFID product design and production line expansion projects.

As soon as the news came out, some investors raised doubts about the appropriate timing of the expansion of Xiamen Xinda LED business. With these questions, the reporter visited Xiamen Xinda Company.

In line with policy orientation, overcapacity is partial

According to the company's introduction, from the perspective of policy, the company's optoelectronic business is in line with the state's policy support for the development of the industry. In recent years, the Ministry of Science and Technology, the Ministry of Industry and Information Technology, the National Development and Reform Commission and other relevant ministries and commissions have issued a series of policies to increase the promotion of LED applications. From the National Development and Reform Commission and other six ministries and commissions in 2009, the "Opinions on the Development of Semiconductor Lighting Energy-Saving Industry" was issued, and in 2013, the "Semiconductor Lighting Energy-Saving Industry Plan" was proposed, all of which clearly proposed to support the development of LED lighting application industry.

Although the country is a key industry to support development, the market is also very worried about the overcapacity of LED. Industry experts said that the overcapacity of LEDs actually needs to look at the industrial structure of the entire industry. For some low-end products such as shoddy, low cost performance, and products that cannot meet national standards, there is a serious overcapacity; A product market with excellent quality and good value for money still has considerable demand and potential.

The management of Xiamen Xinda told reporters that the company has always focused on high-quality, cost-effective product development, financing projects are also based on market research results, product segmentation market has no overcapacity problem. Projects such as white light products funded by fundraising can fill the gap in the company's product strategy. It is expected that the company's LED business will further form a scale advantage after the expansion of production, and the cost can be further reduced to ensure that there is still appropriate profit when the market competition is further intensified.

Deepen business and seek new profit growth points

It is understood that in recent years, Xiamen Xinda has established the development strategy of “one body and two wings”, and the electronic information business sector has become the “one body” to guide the company's business transformation and strategic development. The LED application business is an important part of the electronic information business segment, and it is responsible for the transformation and upgrading of the company's business.

An institutional analyst who has been tracking Xiamen Xinda said that the LED project of Xiamen Xinda is not only a breakthrough to solve the problem of insufficient production capacity, but also a new profit growth point. It is an important starting point for promoting business upgrade. . It also said that this is conducive to the transformation of the company's technological advantages to industrial advantages, and effectively integrate its brand advantages and industrial chain advantages, and has a strategic significance for its development.

In addition, the company's other fund-raising project RFID product design is located in the future of the Internet of Things concept, the company has a first-mover advantage in industry applications.

In addition, from the perspective of the secondary market reaction, the fixed-income plan has been recognized by the market. Although the company's share price has slightly declined after the announcement of the fixed-income plan, it has risen again and hit a new high. The slight decline is mainly due to market expectations, which has caused the company's previous trend to have a large increase, and there is a need for a callback after the plan is put on the ground. The company's stock price is currently in the ascending channel.

(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)

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