NVC interim earnings interpretation: in fighting haze dissipated drag

[LED] NVC Chinese news 27 evening released 2015 semi annual report. Reported data show that the first half of NVC achieved total revenue of 1 billion 772 million yuan, 17.03 yuan year-on-year growth of 4.1%; gross profit reached 381 million yuan, 382 million yuan over the same period last year fell 0.2%; pre tax profit of 7 million 692 thousand and 900 yuan, 9 million 453 thousand and 300 yuan over the same period last year fell 18.6%. Do not send medium-term interest, the same period last year sent 1 cents cents (equivalent to about RMB 0.8).

Decline in the performance of LED gross profit margin rose

During the reporting period, lighting products sales fell 2.3%, NVC said, is mainly due to the LED lighting products into the stage of steady growth, the market growth rate slowed down, while the traditional lighting products gradually replaced or exit, output and price continues to decline; and the light source product sales increased by 15.9%, 12.8%, sales growth of NVC lighting electrical products that because the product is light and electrical lighting that the major international well-known enterprise ODM, during the reporting period, North America and Europe and other mature market demand is stable, continued growth in orders, LED light source and lighting electrical products sales growth.

During the reporting period, LED lighting products to achieve revenue 604 million, 512 million yuan over the same period last year increased by 18%, and the establishment of the main business Home Furnishing NVC lighting Affiliated Companies also have a great relationship; compared to LED lighting, part of the non LED products, medium-term revenues of 1 billion 168 million, 1 billion 191 million over the same period last year fell 1.9%. This is mainly due to the traditional lighting products continue to be replaced or quit, productivity atrophy and market demand and price should be reduced, leading to NVC the main product line of traditional income have different degrees of decline.

As of June 31st, the first half of NVC lighting product gross margin over the same period increased by 0.2% to 24%, and the mature companies on the one hand, thanks to the technology of LED lighting products implemented strict cost control measures, make LED lighting product gross margin increased by 2.9% to 27.2% compared to the same period; on the other hand, the main business of the new Home Furnishing lamps Affiliated Companies of lighting product gross margin contribution is obvious, the product Home Furnishing lamps gross margin increased by 7.5% to 27.2% over the same period. The light source product gross margin over the same period decreased by 2.8% to 17.8%, mainly affected by the fluorescent light source products production capacity of a larger quantity of unsaturated and sales prices; and lighting product gross margin over the same period increased by 0.8% to 17.8%, mainly affected by the decline in raw material prices and product structure change.

Accelerate the transformation of the Internet to get through online and offline channels

The domestic brand market, NVC in the reporting period to maintain 36 exclusive regional distributors, has the exclusive regional distributors have a total of 3437 stores (the capital city coverage rate is 100%; city coverage rate is 96.8%; the county-level city or county-level city coverage rate is 65.9%; the town city coverage rate is 2.3%), a decrease over the same period 268, the decline is mainly focus on the advantages of resources to improve the network operation efficiency, to conduct a comprehensive clean-up and rectification of outlets, shut down part of the operating side outlets.

In addition, in addition to the stores, exclusive regional distributors and exhibition wall outlets showcase, a total of 1521, compared with the same period increased 241. In addition to physical stores, also to Internet marketing transformation, during the reporting period, the group achieved significant growth in business. In addition, has set up the main home lighting Affiliated Companies, but also in the field of expansion to the home, the review period, sales of home appliances reached 283 million 102 thousand yuan.

The international brand market, NVC concentrated consolidate and enhance the existing key market, in-depth brand promotion. In addition, the dealer is also in Vietnam, Chile and Kenya to open a new store. It is worth mentioning that NVC brands also have foreign bodies (such as the interior ministry, Saudi Ministry of Justice approved as a qualified supplier etc.). But because of the traditional lighting market rapidly shrinking, coupled with the popularity of LED lighting products is still low, as of June 31, 2015, the total sales of international brand products NVC amounted to RMB 190, 370 thousand yuan, down 9.4% over the same period.

Domestic and international non NVC brand market, NVC is mainly in the form of ODM to provide energy saving lamp, energy-saving lamp enterprises well-known lighting and accessories products. The NVC brand is still dominated by traditional energy-saving lamps, energy saving lamps and electrical products, LED lighting products under the impact of NVC change management ideas, by analyzing the requirements of customers, to provide targeted services, firmly grasp the order of resources. On the other hand, NVC focus on the development of resources and accelerate the transition to LED lighting products, to meet the different needs of customers. During the reporting period, the total sales of non NVC brand product is up to RMB 634,09.7 million, up 23.2% over the same period.

The future, the company will rely on "The Belt and Road" and "Internet plus" external development opportunities, to get through online and offline channels, the company will be the new development to a new level. For the existing marketing network throughout the country, NVC will also take deeper and broaden the strategy, overhaul the upgrading of existing networks to improve their operational efficiency, continue to further expand the coverage of the market network, and strive to build mature project channel operation team to obtain more high-quality engineering resources.

In overseas markets, in addition to the existing mature channels shengengxizuo, will also actively looking for acquisition opportunities, to open up overseas sales channels; in other regions such as the Middle East, will take the project as the focus, to create a one-stop professional lighting solutions for the Internet;