Unsatisfactory LED performance
From Dehao Runda's 2013 financial report, it is not difficult to see that the so-called "LED high performance" in recent years is just a show. In addition to the huge government subsidies, Dehao Runda's LED sales in the first half of the year were only 388 million yuan, of which subsidiary Ruituo Display contributed 250 million yuan in revenue in the first half of the year relying on its display business. According to this calculation, excluding some chip and device revenue, Dehao Runda's revenue in the LED lighting application part in the first half of the year was only about 50-60 million yuan.
According to the recent financial data of Dehao Runda, the company is in a state of loss. In 2013, Dehao Runda's sales revenue reached 3.13 billion yuan, but its net profit was only 8.826 million yuan, a year-on-year decrease of 94.22%; in the first quarter of 2014, its sales revenue was only 765 million yuan, a year-on-year increase of only 8.56%, and its net profit had already suffered a loss of 35.66 million yuan.
Dehao Runda's LED business is far from meeting the company's expectations. Coupled with the decrease in government subsidies year by year, this makes Dehao Runda's tight capital flow problem even worse.
The profit trend of Dehao Runda in recent years
Frequently playing the capital game of additional issuance
In the past few years, Dehao Runda has been making a lot of noise in the LED industry, constantly making bold statements, constantly raising additional funds, and constantly changing its technical team. The industry has raised questions. Dehao Runda has funds, technical teams, factories, and equipment. Everything is ready, but why has the LED chip failed to produce results?
As the actual controller of Dehao Runda, Wang Donglei insisted on changing the company that originally exported small home appliances three years ago to enter the unfamiliar LED industry, adopting a more aggressive investment and acquisition strategy. In the past three years, Dehao Runda has only relied on planned fundraising through private placement, short-term financing bonds, corporate bonds, bank loans and other channels. However, this has still not allowed the company's LED business to get rid of the situation of "earning performance through subsidies". Instead, it has incurred higher financial expenses, and input and output have always been disproportionate, resulting in declining performance or even losses.
Some analysts said that Wang Donglei acquired NVC Lighting, ostensibly hoping to consume Dehao's products through NVC Lighting, thus finding a stable and powerful outlet for Dehao Runda's chip production capacity. However, judging from the actual actions of Dehao Runda in the past few years, its speed of capital increase is not directly proportional to the growth of LED chip sales. Is Dehao Runda's acquisition of NVC using NVC Lighting to lay out channels, or is it using it as a cover to play with the capital market? A person in charge of a chip manufacturer believes that Dehao Runda is still insisting on playing capital games. The LED industry will always be an unknown quantity, but the chips are getting bigger and bigger.
The cooperation between Dehao Runda and NVC Lighting has come to this day. For the purpose of saving Dehao Runda, Wang Donglei stepped closer and wanted to further control NVC Lighting. But the fact is as he responded to the personnel changes, "No one can absolutely control NVC." The achievements and status of NVC Lighting today cannot be easily controlled by a latecomer in the industry, let alone a "layman" who has not even grasped the direction of his own business?
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