Taiwanese
LED chip manufacturer Arima Optoelectronics Corporation (AOC) recently released its pre-audited earnings report of 2016. Due to a 38.17% increase in revenue and growing demand for AlGaInP LED chips, net loss of the year decreased by a whopping 42.48% and loss per share was also down to NTD 0.57 (USD 0.018), the lowest in nearly six years. With a new wave of demand for high-end AlInGaP LEDs (red LEDs) and IR LEDs, AOC is aiming for turning loss into profit in 2017, but it has to “work extremely hard.”
(Arima Optoelectronics Corporation/ LEDinside)
In 2016, AOC’s revenue increased by 38.17% YoY to NTD 172 million. Net loss of the year totaled NTD 153 million, a significant decrease by 42.48%. Loss per share also decreased to NTD 0.57, the lowest in nearly six years.
The main reason behind this strong performance, as the company points out, is a considerable increase in revenue along with a decrease in impairment. This is because AOC has shifted its primary focus to financial stability in recent years.
In 2017, the LED market has witnessed a burgeoning demand for high-end red LEDs and due to a lack of manufactures, supply has been tight. On the other hand, supply for low-end red LEDs has been ample. However, with various applications coming on the market, AOC predicts better performance than 2016 and is even possible to turn loss into profit. Nevertheless, the company says it has to work extremely hard to achieve this goal.
Since the second half of 2016, demand for AlGaInP LED chips has outnumbered that of InGan LEDs. Growing interest in innovative applications like automotive LEDs, small pitch LED displays, sensors and biometric recognition has greatly boosted demand for red LEDs and IR LEDs.
Moreover, demand will also be driven by Samsung’s addition of iris recognition into its flagship smartphone Galaxy S8, which is due to release in 2017. Thus, investors are even more bullish on manufacturers of AlGaInP LEDs.
Currently, 99% of AOC’s revenue comes from AlGaInP LEDs, and although shares of AOC are full-cash delivery, the price is relatively low.
In addition, its General Manager PJ Wang is a pioneer in Taiwan in the field of AlGaInP LEDs and InGan LEDs. After returning to AOC, Wang decided to give up its InGan LED business and focus on AlGaInP LEDs. The market has been convinced by his strategy, driving AOC stock to skyrocket over 50% in 2017.
AOC also reported its earnings results for February 2017. Revenue for January and February totaled NTD 288 million, a 53.68% increase YoY.
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