“The company is already the second largest LED chip manufacturer in mainland China, but its production capacity can barely rank among the top ten in the industry.†Hua Ai Optoelectronics board secretary Ye Aimin said after the 11th shareholders meeting, although the LED industry faces short-term production capacity. Excess, but the industry's survival of the fittest process will remove a large number of small low-end enterprises to free up space, the company is still facing the problem of insufficient capacity.
Close to the Yangtze River Delta
The proposal passed at the general meeting of shareholders involved a part of the change of the investment project, and 300 million yuan was drawn from the raised funds of RMB 900 million (the same below) originally planned to be invested in the “third phase LED epitaxial chip construction projectâ€. Suzhou set up a wholly-owned subsidiary to run the new project “Hua Can Optoelectronics (Suzhou) Co., Ltd. LED Epitaxial Chip Construction Phase I Projectâ€.
In fact, this is a relatively obvious project to be split off-site. After the change, the original Wuhan fundraising project will continue, the total investment will remain unchanged at 1.398 billion yuan, the amount of funds raised will be reduced to 600 million yuan, and the self-raised funds will increase by 300 million yuan. The total investment of the new project is 1.8 billion yuan, and the amount of funds to be invested is 300 million yuan, accounting for 16.61% of the total investment.
Ye Aimin said that the LED industry and outstanding talents are mostly concentrated in the Yangtze River Delta region. The establishment of a new project in Suzhou is close to the company's target sales area, and is more conducive to the company's introduction of high-end technical personnel.
Capacity gap to be compensated
According to Ye Aimin, since the fourth quarter of 2011, the company has achieved full production of epitaxial wafers for chip production. The increase in epitaxial wafer production capacity of these two projects is a long-term plan for the company to manufacture chips.
Data show that in the first half of 2012, Huacan Optoelectronics' chip sales exceeded the number of production warehousing and higher than the same period of last year, but due to price fluctuations, the company's sales revenue and net profit decreased. Ye Aimin said that in the second half of 2012, the LED industry has begun to show the trend of demand growth. Some LED chips produced by Taiwanese companies are digested in Taiwan, leaving a part of the market space for the mainland.
"In terms of the supply and demand situation of the company itself, our production capacity is the most insufficient." Ye Aimin said, "We have also considered the issue of the source of epitaxial wafers through outsourcing, but in the contact with other companies, we found some extensions. The quality of the film did not meet the requirements, and some product prices could not be discussed. In the end, we decided to solve the problem of raw materials being controlled by people in a self-produced way."
Liu Wei, president of the company, said that the MOCVD equipment required for the production of epitaxial wafers in the above projects has been significantly improved over the previous years, mainly because the performance of the furnace is constantly improving, and the floor space and cost are less and less, which is equivalent to the product. The unit cost on the decline is declining and the depreciation is significantly improved. In addition, the requirements for the on-site operation management level of the technicians are also reduced.
Financial structure is conducive to financing
The total amount of funds raised by Huacan Optoelectronics is 923 million yuan, of which the over-raised funds of 22.556 million yuan have all been permanently replenished with working capital. The company plans to use the raised funds of 900 million yuan to start the two projects with a total investment of about 3.2 billion yuan. Faced with a large funding gap.
Ye Aimin explained that the company plans to solve the funding problems of the above projects mainly through bank loans. Hua Can Optoelectronics' 2012 mid-year report showed that the company's asset-liability ratio is only 13%, and the company still has a large financing space. “We have calculated that even if all the rest of the funds are settled through bank loans, the asset-liability ratio is at a reasonable level.â€
As for whether the financial expenses generated by bank loans will affect the company's profitability, Ye Aimin said that when the company starts bank financing in the second half of next year, the new project is expected to start releasing some production capacity. "The funds raised are very big for us. With the help, the company will definitely be cautious in capacity expansion."
Close to the Yangtze River Delta
The proposal passed at the general meeting of shareholders involved a part of the change of the investment project, and 300 million yuan was drawn from the raised funds of RMB 900 million (the same below) originally planned to be invested in the “third phase LED epitaxial chip construction projectâ€. Suzhou set up a wholly-owned subsidiary to run the new project “Hua Can Optoelectronics (Suzhou) Co., Ltd. LED Epitaxial Chip Construction Phase I Projectâ€.
In fact, this is a relatively obvious project to be split off-site. After the change, the original Wuhan fundraising project will continue, the total investment will remain unchanged at 1.398 billion yuan, the amount of funds raised will be reduced to 600 million yuan, and the self-raised funds will increase by 300 million yuan. The total investment of the new project is 1.8 billion yuan, and the amount of funds to be invested is 300 million yuan, accounting for 16.61% of the total investment.
Ye Aimin said that the LED industry and outstanding talents are mostly concentrated in the Yangtze River Delta region. The establishment of a new project in Suzhou is close to the company's target sales area, and is more conducive to the company's introduction of high-end technical personnel.
Capacity gap to be compensated
According to Ye Aimin, since the fourth quarter of 2011, the company has achieved full production of epitaxial wafers for chip production. The increase in epitaxial wafer production capacity of these two projects is a long-term plan for the company to manufacture chips.
Data show that in the first half of 2012, Huacan Optoelectronics' chip sales exceeded the number of production warehousing and higher than the same period of last year, but due to price fluctuations, the company's sales revenue and net profit decreased. Ye Aimin said that in the second half of 2012, the LED industry has begun to show the trend of demand growth. Some LED chips produced by Taiwanese companies are digested in Taiwan, leaving a part of the market space for the mainland.
"In terms of the supply and demand situation of the company itself, our production capacity is the most insufficient." Ye Aimin said, "We have also considered the issue of the source of epitaxial wafers through outsourcing, but in the contact with other companies, we found some extensions. The quality of the film did not meet the requirements, and some product prices could not be discussed. In the end, we decided to solve the problem of raw materials being controlled by people in a self-produced way."
Liu Wei, president of the company, said that the MOCVD equipment required for the production of epitaxial wafers in the above projects has been significantly improved over the previous years, mainly because the performance of the furnace is constantly improving, and the floor space and cost are less and less, which is equivalent to the product. The unit cost on the decline is declining and the depreciation is significantly improved. In addition, the requirements for the on-site operation management level of the technicians are also reduced.
Financial structure is conducive to financing
The total amount of funds raised by Huacan Optoelectronics is 923 million yuan, of which the over-raised funds of 22.556 million yuan have all been permanently replenished with working capital. The company plans to use the raised funds of 900 million yuan to start the two projects with a total investment of about 3.2 billion yuan. Faced with a large funding gap.
Ye Aimin explained that the company plans to solve the funding problems of the above projects mainly through bank loans. Hua Can Optoelectronics' 2012 mid-year report showed that the company's asset-liability ratio is only 13%, and the company still has a large financing space. “We have calculated that even if all the rest of the funds are settled through bank loans, the asset-liability ratio is at a reasonable level.â€
As for whether the financial expenses generated by bank loans will affect the company's profitability, Ye Aimin said that when the company starts bank financing in the second half of next year, the new project is expected to start releasing some production capacity. "The funds raised are very big for us. With the help, the company will definitely be cautious in capacity expansion."
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