The $45 million investment in Yangzhou to build the core project of LED

De Ho Runda (002005) announcement today, the company intends through a subsidiary of de Ho Runda International (Hongkong) Co., Ltd., set up a wholly-owned subsidiary in Jiangsu city of Yangzhou Province, the new company, tentatively named Yangzhou de Ho Runda Photoelectric Technology Co., Ltd., the registered capital of not more than $45 million, two investment, the initial investment amount is not more than 25 million dollars.

Previously, Elec-Tech has disclosed the application of non-public offering to raise funds for the project, to be in Anhui city of Wuhu Province, LED lighting project investment projects and project LED package of LED chip. The Yangzhou subsidiary main operation MOCVD (metal organic chemical vapor deposition) device project. MOCVD equipment for the production of LED epitaxial wafer, is closely linked with the LED chip project core projects. Zhang believes that the establishment of Yangzhou subsidiary is based on the needs of the industry with the Wuhu project, in order to further achieve the company's industrial layout in the LED industry.

Elec-Tech pointed out that according to the Yangzhou municipal government announced in August 2009 the "Yangzhou LED wafer production equipment purchased by MOCVD grant funds management implementation details" of the relevant provisions, the Yangzhou subsidiary reached more than 5 units in the procurement of imported MOCVD equipment, MOCVD equipment procurement is expected to get the Yangzhou municipal government to give 8 million yuan / Taiwan (red yellow light MOCVD) or 10 million yuan / Taiwan (Lan Lvguang MOCVD) subsidies, the preferential policies will effectively reduce the LED epitaxial wafer project investment cost and investment risk.

The prospect of the Yangzhou subsidiary Elec-Tech believes that its prospects, as a listed company to carry out the implementation of LED business platform, has a broad market prospect. At present the subsidiary of Guangdong StrongBase Photoelectric Technology Co., Ltd., and Shenzhen retop Display Technology Co Ltd belong to the LED industry, so Elec-Tech has some experience in the industry, the future of the new company operating risks under control.

Elec-Tech also announced that the company and related parties Guangdong jianlongda and Enping StrongBase respectively reached 51 million yuan and 8 million yuan of raw materials procurement agreement, LED product sales agreement 43 million yuan, 1 million yuan, related transactions amounted to 103 million yuan.

In addition, Guangdong jianlongda transfer agreement in May 13, 2009 to buy Elec-Tech 21 million 840 thousand shares of stock, and in September 21, 2009 sold 1 million 369 thousand and 410 shares, belongs to short-term trading, short-term trading the income is 5 million 676 thousand and 200 yuan. The board of directors has a consultation with the Guangdong jianlongda, Guangdong jianlongda agreed to the short-term trading returns in December 31, 2009 before elec-tech. The communication that Guangdong jianlongda causes short-term trading is due to the securities regulations at the same time the understanding is not deep, the selling behavior of investors to the stock Elec-Tech apology.