Taiwan LED packaging manufacturer Everlight continues to deepen its channel presence in China. According to UBS Securities Co. Limited’s report, Everlight will continue expanding its 7 provincial sales channels in the second half of 2013. Even though general lighting demand growth remains strong, the continued drop in price adds pressure to revenue growth. UBS believes that the company still needs to devote more investment into its own lighting product strategy, though this will also lead to pressure on gross profit margin and operating income performance.

German lighting firm WOFI's cheif LED luminaries.

Everlight continues to extend lighting channels this year. Aside from establishing distribution channels within the Chinese market, the company also acquired Germany lighting firm WOFI. UBS estimates that Everlight’s 3Q revenue will have a growth of 13.6 percent compared to 2Q, though if WOFI revenue is not included, Everlight 3Q revenue instead will be about equal with 2Q. It is expected that WOFI 2013 will contribute an additional 10-15 percent to Everlight’s overall revenue. On top of that, WOFI gross profit margin is higher than that of its parent company Everlight. That being the case, acquiring WOFI is expected to increase the entire operating profit margin performance. It is predicted that WOFI in 2013 and 2014 will have a contribution towards Everlight’s EPS of NT $.73 and NT $1.46 respectively.

WOFI provides high quality lighting concepts.

Although UBS has a positive view of the benefits Everlight’s will receive with the acquisition of WOFI, it however still holds on to the belief that Everlight has hardships to face with their products. UBS pointed out that in the beginning of this year, Everlight has already established sales channels in 5 providential branches and plans to continue establishing another 7 providential branches. Extending the Chinese market share is the main goal at this current stage with gross profit margin not being a priority. UBS believes that although Everlight lighting delivery quantity has continual growth, average price for lighting products continues to drop adding pressure to revenue growth. Everlight at the same time faces a drop in product price adding pressure to their gross profit margin, and the extension of Chinese channel can also lead to a rise in business expenditures.


In June of this year, Everlight bought German lighting firm WOFI for EUR 6.55 million (roughly NT $260 million) establishing lighting market channels in Europe.