Changelight Net Profit Plummets in 1H16 Despite Soaring Revenues

Changelight announced its revenue soared 107.14% to RMB 458.34 million (US $69.08 million) in second half of 2016, but its net profits tumbled, reported China Securities.

The company’s expenditure escalated 54.27% Year-on-Year to RMB 76.04 million during the reporting period, and it posted net profits plummeted 125.36% YoY resulting in a net loss of RMB 6.17 million.

Main financial indicators

Increased sales of blue LED chips, and subsidiaries products and lighting application products resulted in increased revenues, while net losses were mainly caused by expanding blue LEDs leading to lowered gross margins. Rising LED chip R&D costs, also led to uptick in management costs compared to the same period last year.

Lastly, investments in blue and green LEDs resulted in escalating equipment financing and leasing costs, contributing to rising costs compared to last year. Operations during this period led to negative cash flow of RMB 95.33 million, a steep decline of 931.05%, due to expanding productions and acquisition of new materials that escalated operation costs in second half of 2016.

The announcement also indicated for the first half of 2016, LED EPI-wafer gross margins downed 17% to 15.89% YoY, two of the main reasons cited was significant growth in blue LED chip sales in 2016. However, blue and white LED chip gross margins are still much lower than AlInGaP LEDs, and other red, yellow and orange LEDs, which dragged the company’s operation gross margins down. Moreover, the company’s blue LED production capacity has not reached full utilization rates yet, and the company expects to improve blue LED gross margins following the completion of its expansion projects.

Disclaimers of Warranties
1. The website does not warrant the following:
1.1 The services from the website meets your requirement;
1.2 The accuracy, completeness, or timeliness of the service;
1.3 The accuracy, reliability of conclusions drawn from using the service;
1.4 The accuracy, completeness, or timeliness, or security of any information that you download from the website
2. The services provided by the website is intended for your reference only. The website shall be not be responsible for investment decisions, damages, or other losses resulting from use of the website or the information contained therein<
Proprietary Rights
You may not reproduce, modify, create derivative works from, display, perform, publish, distribute, disseminate, broadcast or circulate to any third party, any materials contained on the services without the express prior written consent of the website or its legal owner.
Display devices have been used for many years as a means of HMI (Human Machine Interface) to connect humans and machines interactively, and their usage are still expanding. Automotive interiors are no exception to this trend, with an increasing ... READ MORE
About LiDAR Automotive industry trends In recent years, many vehicles have been launched with ADAS (Advanced Driver Assistance Systems) as standard equipment. As the future evolves towards more automated driving, sensing around the vehicle i... READ MORE