On August 18th, 2017, Ganzhao Optoelectronics unveiled its performance report for the first half of the year. The company demonstrated steady progress during this period, achieving operating revenue of RMB 57.31 billion and an operating profit of RMB 98.78 million, marking a year-over-year increase of 585.27%. This growth translated into a net profit of RMB 10.18 million for shareholders of listed companies, representing a staggering year-on-year increase of 1,748.59%. For the first time in the current reporting period, the company managed to turn losses into profits.
In particular, the core business of Xingzhao Optoelectronics, including its chip operations, reported operating revenue of RMB 554.37 million, a year-on-year increase of 81.00%. The gross profit margin for these operations stood at 36.23%, a significant improvement of 20.33% compared to the previous year. This surge was primarily driven by the ongoing recovery of the LED industry, which led to higher production and sales volumes, reduced unit costs, and enhanced profitability.
However, LED-related products generated operating revenue of only RMB 10.10 million during the reporting period, a year-on-year decrease of 91.54%. The gross profit margin for these products was -47.32%, a decline of 46.23% compared to the previous year. The primary cause was the company's decision to focus on its core business during strategic discussions held in the second quarter. As a result, the company decided to adjust and shut down less profitable LED operations while addressing associated inventory and machinery issues.
On the same day, Lianchuang Optoelectronics also released its semi-annual report for 2017. The company achieved total operating revenue of RMB 1.36 billion, a 14.57% increase from the previous year. The cumulative net profit attributable to the parent company’s shareholders was RMB 116 million, an increase of 16.50% year-on-year. The company's operations remained relatively stable, with notable growth in its intelligent control modules and backlighting segments, thanks to technological upgrades, product and customer structure improvements, and increased demand from existing clients.
The LED devices and lighting projects segment continued to develop steadily, but the wire and cable industry faced challenges due to fierce market competition, stricter bidding conditions, falling prices, and rising raw material costs, resulting in declining revenues.
Maple Yongming, another major player in the industry, reported strong performance in its first half of 2017. The company's operating income reached RMB 203 million, a year-on-year increase of RMB 97.31 million or 92.38%. Operating costs amounted to RMB 142 million, up by RMB 66.68 million compared to the previous year, a year-on-year increase of 89.00%. The net profit attributable to shareholders surged to RMB 22.24 million, a significant jump of RMB 21.38 million compared to the prior year, representing a year-on-year increase of 2,481.02%.
Huapu Yongming specializes in providing outdoor high-power LED lighting solutions for domestic customers. As one of the earliest providers in China offering comprehensive services including design, R&D, and manufacturing for LED outdoor lighting end-users, the company has benefited from the rapid expansion of the LED lighting market. However, the competitive landscape has become more polarized, with larger companies leveraging their brand recognition, extensive distribution networks, and product quality stability to gain an edge. Emerging companies with technological prowess and swift channel expansion strategies have also capitalized on this growth.
Smaller firms struggle due to limited technology, small scale, and inconsistent product quality. While Huapu Yongming remains a leader in domestic LED outdoor high-power lighting products, it faces certain financial constraints when attempting to expand its product lines and optimize its offerings.
To stay ahead, Maple Yongming continuously innovates by developing new products to fill market gaps and boost competitiveness. Currently, the company’s modular LED outdoor lighting solutions are successfully deployed both domestically and internationally. Future plans include increased investments in R&D to mitigate risks posed by the rapidly evolving industry.
Intellectual property rights, including trademarks, patents, and core technologies, remain crucial to the company’s competitive standing. As competition intensifies, frequent incidents of trademark and patent infringements lead to economic losses. Companies face heightened risks of intellectual property disputes when competing against domestic and international rivals.
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