San’an has recently released their 3Q13 financial report. The first three quarters of the year saw a revenue of RMB 2.63 billion (US $431 million), a YoY growth of 11.86 percent. Gross profit margin was RMB 761 million, a YoY growth of 14.07 percent. Net profit attributable to company stockholders after deduction of non-recurring profits or loss was RMB 645 million, a substantial YoY growth of 59.95 percent. Earning per share (EPS) was RMB 0.53. Single quarter revenue for 3Q dropped to RMB 957 million, YoY dip of 2.48 percent. Gross profit margin reached RMB 298 million with a YoYgrowth of 48.42 percent. Net profit after deduction of non-recurring profits or loss was RMB 243 million, a YoY growth of 139.17 percent.

Good revenue growth from main operations; San’an expands chip business

San’an 3Q13 results followed market predictions. Chip 3Q13 sales continued to show quarter-on-quarter (QoQ) growth, making up about 80 percent of the company’s revenue. Low revenue from street lamp and solar energy sales was the main cause behind 3Q13 revenue drop compared to 2Q. However, annual sales performance was not affected by quarterly fluctuations. . Gross profit reached 34.86 percent in 3Q with chip sales kept at last quarter levels. However, due to high gross profit margin for street lamps in 3Q, revenue dropped to RMB 500 million, which hints that chips gross profit is stable with a slight increase. The company’s financial report showed a continued improvement in product quality, reducing the reliance on government street lamp subsidies. The company will begin expansion plans afterwards. Upon completion the company will have more than 250 MOCVD units, and will be able to become a global leader in terms of production capacity.

Chip Leadership Solidified

In the chip supplier field, San’an has a concrete leadership position, with production capacity for San’an and partner Forepi coming close to that of Epistar and Huga Optotech. It will only be a matter of time before San’an obtains leadership position in global chip shipments.. However as far as company competitiveness goes, there is a positive outlook for San’an. The company has advantages in price control, industrial management standards, and management quality. Two years of competition in the chip market has proven the market’s oversupply calculations based on remaining MOCVD units is illogical. Not every manufacturer who purchases a furnace can produce products to comply with consumer demands. In reality, only San’an is currently capable of shipping large volumes of economical white-light illumination chips to downstream package clients. Industry integration in the package field is becoming increasingly rapid. Most medium and small companies within the next two years will be eliminated due to fierce competition, creating the trend of survival of the fittest.