Micro Bo: product upgrades to make progress LED business worth looking forward to

2007 total revenue of 972 million yuan, an increase of 11.14%; shareholders attributable to listed companies net profit 21 million 582 thousand yuan, down 70%; attributable to shareholders of listed companies net profit after deducting non recurring gains of -1.02 billion yuan, down 514.26%; earnings per share 0.05 yuan, lower than we expected.

The main reason for the sharp decline in the performance of the company is: (1) a substantial increase in the cost of the same period last year, sales expenses, administrative expenses and financial expenses grew by 29.51%, respectively, 27.74%, 83.23%. (2) during the reporting period, the company raised an impairment loss of $57 million 88 thousand, an increase of $346.19%, of which the ESS company's license fee intangible assets provided an impairment provision of $14 million.

Three business performance of joy and sorrow. The integrated circuit business income of 587 million yuan, down 16.59%, gross margin fell 3.43 percentage points; discrete devices to achieve sales revenue of 214 million 700 thousand yuan, an increase of 70.92%, gross margin of 7.74, down 15.74 percentage points; LED business performance, sales revenue 167 million yuan, an increase of 278.53%, gross margin reached 38.84%, with basically the same as over the same period last year.

LED business will be the fastest growing business in the next two years. From the production point of view, there are already 4 MOCVD epitaxial production equipment, in April, there will be another 2 new equipment put into operation, the company LED chip production capacity will be increased from the current 200kk/ months to 300kk/ months or more. LED business orders full, good production and marketing convergence, is expected to 08-09 LED gross margin remained at about 38% of the current level. Taking into account the company is likely to add new MOCVD equipment, higher LED business 08-09 sales revenue growth was expected to grow by 120% and 70%.

After nearly two years of business restructuring, Silan technology upgrades and product development has achieved certain results, 07 years of asset impairment loss after 08 years, the company is expected to go, especially the company's LED business has first mover advantage, with good market development opportunities in the future three years, will become the main focus of the company investment the. We adjusted the company's earnings forecasts, 08-10 EPS were 0.19, 0.33, $0.47, to give cautious recommendation investment rating.

Source: financial website