There is still room for rising LED application

On October 10, 2010, the State Council promulgated the "Decision on Accelerating the Cultivation and Development of Strategic Emerging Industries." China must accelerate the cultivation and development of strategic emerging industries. Semiconductor lighting materials are one of the key materials for national development. The semiconductor lighting material mentioned here is led. LED has the characteristics of small size, low power consumption, long life, no pollution, fast response, high color purity, etc. It is widely used in backlight, lighting, traffic signal, instrumentation, color display, automobile and other fields.

Due to the popularity of LED LCD TVs and the large-scale promotion of color displays, the global demand for LEDs has shown an explosive growth trend. The stock price of LED-related listed companies has a good performance in the secondary market, and the performance is also high in sesame blossoms. Domestic listed companies have joined the LED investment boom, buying MOCVD equipment into the upstream epitaxial wafer and chip field is the main direction of LED investment. Sanan Optoelectronics, Dehao Runda (18.51, -0.09, -0.48%), Ganzhao Optoelectronics (83.200, 2.20, 2.72%), Silan Micro (23.99, 0.38, 1.61%) These four listed companies have ordered 266 MOCVD equipment, but in 2009, there are only 150 MOCVD machines installed in the country. The future production capacity of blue-green LED chips is too fast.

Looking into the future, we believe that there will be room for growth in the LED sector. For upstream chip manufacturing, investors are advised to focus on companies whose main products are red and yellow LED chips. For downstream packaging applications, investors are advised to pay attention to scale and technology advantages. A company that supplies raw materials for packaging applications.

1. Derun Electronics (18.01, -0.09, -0.50%)

From a global perspective, connector demand is back to the upside, Bishop & Associates expects global connector sales to reach $38.271 billion, an annual growth rate of 11.3%. China is the fastest growing market for the global connector industry. It is estimated that the connector market in China will reach 8.283 billion US dollars in 2010, with a year-on-year growth rate of 22.4%, which is much higher than the global market's 11.3%. The company is the largest professional and electronic connector manufacturer in China and will benefit from the growth of the connector industry.

The company's DDR connector has already begun to supply Tyco, and it has already reached nearly 3 million pieces per month. We believe that the DDR connector issuance project can be completed in advance. The CPU connector has been certified by Tyco's downstream customers and is available in small quantities. At the same time, the scope of cooperation between the company and Tyco is expanding. Tyco gradually shifts the other connectors used in notebooks to the company. In 2009, Tyco's global revenue was 10.256 billion US dollars. We believe the future cooperation potential between the company and Tyco. huge. The company's automotive connector and wire harness business shipments are less than 1 million yuan / month, and the market scale of China's 60 billion yuan is clearly opposite, we believe that with the company's technical level in this area, the company is There will be a qualitative leap in revenue from automotive connectors and wiring harnesses. LED connector molds have come out, production equipment is gradually in place, and optimistic expects to be initially mass-produced in the fourth quarter of this year.

We believe that the company has passed the period of accumulation and began to enter a new development period, and investors are advised to pay attention.

2, dry photo photoelectric

The company is one of the largest suppliers of quaternary red and yellow LED chips in China. In recent years, it has formed a relatively reliable and mature production process and established a good brand image in the domestic market. At the same time, the company is also one of the largest suppliers of triple-junction gallium arsenide solar cell epitaxial wafers that can be mass-produced and used in space. The ground-based concentrating triple-junction gallium arsenide solar cell chip products have also been successfully produced.

The market for high-brightness quaternary LED chips is huge. National Semiconductor Lighting Engineering R&D and Industry Alliance expects that the annual demand for high-bright quaternary red and yellow LED chips will reach 61 billion, 78 billion and 93 billion, respectively, from 2010 to 2012.

Gallium arsenide solar cells have a dual market for space and ground. In terms of space applications, the only units in China that can produce high-efficiency triple-junction gallium arsenide epitaxial wafers are only a few of the company and 18 of China Electronic Technology Group. The production capacity is far from meeting market demand. In the terrestrial application market, there may be a rapid growth process for GaAs solar cells on the ground in China in the next few years.

We believe that the company's main product, red and yellow LED, has a good development prospect, and investors are advised to pay attention.

3. Shengyi Technology (11.84, -0.13, -1.09%)

From January to September this year, the company achieved operating income of 4.093 billion yuan, an increase of 57.51% over the same period of last year; the net profit attributable to shareholders of listed companies was 122 million yuan, an increase of 34.49% over the same period of last year. The company also expects the company's net profit in 2010 to increase by more than 50% compared to 2009.

In the third quarter of this year, the company's comprehensive gross profit margin was 16.01%, a decrease of 4.25 percentage points from the previous quarter. The main reason for the decline in gross profit margin was that the downstream demand was strong in the first half of the year, and the supply of products was in short supply. The company raised the gross profit margin in the second quarter through multiple price increases, and the supply tension in the third quarter fell, and the price of raw material copper increased significantly, resulting in product hair. Interest rates have fallen. We expect the gross profit margin of the company's products to remain basically stable in the fourth quarter of this year.

The company's non-public stock plan has been reported to the China Securities Regulatory Commission to raise funds for the construction of the Songshan Lake No. 1 Plant (Phase 4) Soft Photoelectric Materials Research and Development Center Project, High Performance Rigid CCL and Bonding Sheet Technical Renovation Project (Songshan Lake) The fifth phase of the first plant) and the high thermal conductivity copper clad laminate project for LED (the sixth phase of Songshan Lake No. 1 Plant) will greatly improve the company's performance after the project is issued. LED high-heat-conducting CCL products have basically no competitors in China, and the import substitution space is huge. In the future, LED will be popularized.

The company's valuation is low, and investors are advised to pay attention.

4. Guoxing Optoelectronics (34.40, 1.25, 3.77%)

The company is one of the largest LED packaging companies in China, both in terms of production scale and product quality. The company's products cover LED backlights, LED display modules, LED light source modules, LED automotive taillights, LED spotlights and many other products. The company's products are widely used in household appliances, consumer electronics, computers, communications products, instrumentation, electronic equipment, industrial control systems, lighting engineering, decorative lighting, special lighting, display, billboards, traffic lights and so on. After years of operation, the company has gradually formed a customer structure based on home appliance companies.

In the third quarter of this year, the comprehensive gross profit margin of the company's products was 31.83%, a slight decrease of 0.94 percentage points from the second quarter, mainly due to the tight supply of LEDs in the first half of this year. We believe that with the continuous release of LED chip production capacity, the price of LED chips will decline in the future. At the same time, with the company's high-interest rate new products TOP LED and CHIP LED sales revenue ratio continues to increase, it is expected that the company's product gross margin will have upside potential.

In today's world where energy conservation and environmental protection are advocated, it is an irreversible trend to popularize energy-saving LEDs. As a leading enterprise in the field of LED packaging, the company will fully benefit from it. We are optimistic about the company's development prospects and recommend investors to pay attention.

5, Tuobang shares

The company is a leading provider of intelligent control technology in China, covering home appliance control, high-efficiency lighting, motors, power supplies, security, industrial automation and digital electronics, with sales in dozens of countries around the world. In the first three quarters of 2010, the total operating income was 619 million yuan, a year-on-year increase of 69.20%; the net profit attributable to shareholders of listed companies was 53.71 million yuan, a year-on-year increase of 54.51%. The company also expects the net profit attributable to shareholders of listed companies in 2010 to increase by 40%-60% compared with the same period of the previous year.

One of the company's additional projects is to acquire and increase the capital of Shenzhen Yuchengxin Power Technology Co., Ltd. to build a lithium-ion battery and battery management system project, thus entering the field of lithium-power batteries with huge market prospects and high profitability. Yucheng Xin Company is a domestic enterprise specializing in the production of power lithium battery products. It mainly produces and sells high-capacity, high-power lithium-ion power batteries. The company has R&D and technology advantages, process assembly advantages, overall solution advantages and quality management advantages in the field of lithium iron phosphate batteries.

The company has a dual concept of lithium battery and LED, and the future development is optimistic. It is recommended that investors pay attention to it.

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