LIAN photo: LED bright future is yet to work

With the discussion of the "11th Five-Year" planning the media market more and more prospects for the energy industry to be optimistic expectations, it has strong energy saving effect of LED lighting manufacturer LIAN photoelectric naturally became the chief attraction of market, from October 13th to early highs, the stock price rose as high as 50%. This is speculation, or have a real performance support it?

In 2005 three quarterly show, the company's main business income still comes from the traditional business, namely: the three aspects of business, optoelectronic devices and application of relay and communication cable, accounted for 42.2%, 39.9% and 12.7%, as the company to raise funds to invest in the LED business is still little progress.

The Great Wall securities analyst Li Qinglin said that the company's LED industry chain is relatively complete, but the strength of the manufacturing process of LED front-end technology is not strong, currently only the production of red, yellow, green epitaxial wafers. Because of the lower grade of products, market competition, product gross margin is only about 11%, the product profit space is very limited; blue white LED market prospects are more attractive, but the price of the product is too expensive, the short term is difficult to grow rapidly.

Li Qinglin analysts expect the company in 2005 earnings per share of 0.12 yuan, in 2006 there is no significant growth in earnings per share of about $0.13. According to the current price of 5.86 yuan, in 2005 the dynamic price earnings ratio of 48.8 times, in 2006 was 45.1 times. Even taking into account the factors of the reform, the dynamic price earnings ratio is still too high. Recommended investors holdings.

China Merchants Securities analyst Zhang Liangyong said, LED will eventually illuminate the world, but the domestic company is a long way to go. Among them, the LIAN LED industry to achieve the scale of revenue and profitability is still a long way to go. The company's fundamentals are difficult to support the current stock price.