Accumulation of Q1 loss impact earnings, annual revenue estimates increased by 10-12%

The accumulation of the first quarter of 2017 is the most traditional business off-season, but shipments continued to rise, driven by revenue by more than 10% years, but the legal analysis, because the proportion of total revenue of RMB is high, and in the first quarter of the corporate forecast depreciation rate, and will affect the quarter gross margin fell to about 30-31%, industry foreign exchange loss estimated up to 10 million yuan (NT, the same below), about 0.3 yuan EPS. This year the company benefit from the mainland market is still strong on small pitch LED display market demand, annual growth rate of 45-50%, the company estimated this year shipments can increase more than 20%, because the product price by the market price competition effect, the large decline in estimated revenue this year, the annual increase of approximately 10-12%.

IC design for the accumulation of the company, the product is mainly driven by IC LED, the application to display the main screen, other applications include building lighting, TV backlight and general lighting. Terminal applications accounted for the proportion of revenue: the display is about 90%, LED lighting accounted for about 10%. From 2014, the company focused on the ultra dense display screen, small spacing (pitch (spacing) <3mm) products, the current niche products (which accounted for a small space into 6-7) accounted for about 70% of consolidated revenue. The company shipped to the mainland market, accounting for 75% of revenue.

Continued to benefit from the mainland market to meet the needs of small spacing display screen, shipments rose, although the first quarter of the traditional operation of the off-season, but revenues of 610 million yuan, a quarter minus of 0.42%, an increase of 13.33%. However, due to the high proportion of RMB revenue, and the magnitude of the devaluation of the first quarter, corporate estimates, will affect the Ji Mao interest rate fell to about 30-31%, foreign exchange losses estimated at 10 million yuan, about EPS yuan.

More than 20% other competitors have also invested in mainland China, and the price of the product to grab the city price pressure, product price decline, estimated the overall price drop of about 15%, but this year accumulated in the mainland price decline amounted to 20-25%. Legal representative said that last year the company IC shipments of about 900 million, this year, the overall shipments can be increased by more than 20%, but because of the decline in the price of the product, so that the annual revenue growth of about 10-12%.

Since second, the three quarter will enter the trading season, corporate operations are optimistic about the subsequent rise, but to remind the accumulation in the mainland market share at about 35-40%, this year to maintain 4 to market share, in order to maintain the competitiveness of the company, sales strategy "to measure the price of system", fear of affecting the gross margin performance. Expected this year gross margin range of about 31-34%, power struggle to maintain last year's level.

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