Dehao Runda plans to invest 50 million yuan in building an automotive LED packaging project

On the evening of May 29, Dehao Runda announced that the company's holding subsidiary Anhui Ruituo Electronics Co., Ltd. (hereinafter referred to as "Anhui Ruituo") plans to sign an "Investment Agreement" with the Bengbu High-tech Industrial Development Zone Management Committee and plans to invest in the construction of automotive LED packaging projects. The total project investment is 50 million yuan, and the first phase investment is approximately 30 million yuan.

According to the agreement, the project name is "Anhui Ruituo Automotive LED Packaging Project" and the site is located on the east side of Tianhe Road and the south side of Yannan Road in Bengbu High-tech Zone. The project location is the current factory building in the park of Bengbu Dehao Optoelectronics Technology Co., Ltd. The project plans to build an LED semiconductor device manufacturing base, and the first phase of construction is scheduled to be completed by December 2025.

After the first phase of the project is completed, Bengbu Ruituo Electronics Co., Ltd. (hereinafter referred to as the "Bengbu subsidiary"), which is wholly owned by Anhui Ruituo, will serve as the operating entity. It is expected that the annual taxable sales revenue will reach 70 million yuan, and the annual treasury tax revenue will be approximately 1 million yuan.

Dehao Runda stated that this investment is an internal structural adjustment of the company based on the needs of business development, which will transfer the business originally undertaken by Anhui Ruituo Bengbu Branch to the newly established Bengbu subsidiary. The signing of the agreement will help the company win support from the local government and consolidate good government-enterprise relations, which will have positive significance for the company's future development.

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Dehao Runda took multiple measures to seek a breakthrough

Dehao Runda was founded in 1996. It was initially mainly engaged in the sales of small household appliances such as bread machines and ovens, and successfully listed on the Shenzhen Stock Exchange in June 2004. With the impact of the 2008 financial crisis and the pressure of manufacturing transformation and upgrading, the company gradually explored new development directions and began to transform and adjust to the LED industry.

Dehao Runda entered the LED industry in 2009 and has successively acquired and integrated Guangdong Jianlongda, NVC Lighting and other enterprises, and established an LED R&D base through its own funds, bank loans and non-public offerings to raise funds, forming a complete industrial chain covering epitaxial chips, packaging modules, LED lighting and display products, as well as brands and channels.

However, with the increasingly fierce competition in the industry and changes in the market environment, Dehao Runda is also facing new challenges in its development in the LED field. In July 2019, Dehao Runda issued an announcement that it decided to close its LED chip factory and planned to complete the disposal of related businesses in the third quarter of that year. In 2020, the company further adjusted its strategy and announced that it planned to withdraw from the LED display business in an orderly manner.

Due to the shutdown of the LED chip and display screen business, some of Dehao Runda's equipment, factories and land are idle, and it still has to bear management expenses every year. In order to reduce costs, the company speeds up asset disposal and optimizes the use of idle resources. In September 2024, the company sold the idle assets of its Dalian Dehao Optoelectronics and Dalian Dehao Semiconductor to affiliated companies in Dalian Jinpu New Area for 135 million yuan.

While shrinking some businesses, Dehao Runda actively concentrates resources to promote the development of key sectors.

On May 6 this year, Dehao Runda announced that its holding subsidiary Anhui Ruituo had received a capital increase of 30 million yuan from Anhui Ruicheng Optoelectronics Fund and a 20 million yuan capital increase from Chizhou Guochuang Fund, and all funds were in place. The introduction of strategic investors in this capital increase will help enhance Anhui Ruituo's financial strength, support its subsequent development, enhance competitiveness, and promote the expansion of LED packaging business.

Automotive LED packaging companies compete for new tracks

Currently, the automobile industry is accelerating towards the "new four modernizations" (electrification, intelligence, networking, and sharing), and the demand for high-performance lighting and vehicle-mounted displays continues to increase. Relying on technology accumulation and product layout, LED packaging companies are gradually expanding their application territory in the automotive market, gaining new development opportunities and profit growth space.

According to "TrendForce 2024 Global Automotive LED Market - Lighting and Display Product Trends", in 2024, automobile manufacturers will face the pressure of market competition and cost reduction, and actively market advanced technologies such as adaptive headlights, Mini LED taillights, through-type taillights, grille lights/full-bandwidth headlight bars, (smart) ambient lights, Mini LED backlight displays, etc. as high value-added products. These innovative applications will drive steady growth in market demand for car lighting/vehicle LEDs in 2024.

In the blue ocean of automotive LED, Dehao Runda is not the only one actively deploying. Packaging companies such as Hongli Zhihui, Nationstar Optoelectronics, Ruifeng Optoelectronics and Jufei Optoelectronics have also stepped up their efforts to seize market opportunities.

Relying on the advantages of a complete industrial chain of automotive-grade LED packaging, modules and lights, Hongli Zhihui actively responds to fierce market competition and continues to expand domestic and foreign commercial and passenger car lighting markets, focusing on promoting ambient lighting and ADB headlight technology. In 2024, its LED automotive lighting business revenue will reach 810 million yuan, accounting for 19.15% of the company's total revenue.

Nationstar Optoelectronics’ automotive LED products cover interior and exterior display and lighting, and have been widely used in mainstream models such as Changan, SAIC, Geely, BYD, Hyundai, and Cyrus. The company stated in the survey that its automotive LED business has grown steadily in the past two years. In the future, it will continue to delve into market segments, combine with production capacity expansion, actively promote investment and mergers and acquisitions, and seek new performance growth points.

Ruifeng Optoelectronics will achieve a 44% growth in automotive LED product sales revenue in 2024. On the basis of consolidating existing customers, Ruifeng Optoelectronics actively expands new customers and has made progress. Its continuously innovative product lines, such as ADB matrix light sources/modules, second-generation ceramic high-power technology and new diamond-based ultra-high power density packaging products, have further enhanced its market competitiveness.

Taking advantage of the rapid development of new energy vehicles, Jufei Optoelectronics has focused on automotive business, steadily increased its global market share, and achieved healthy growth. It is worth noting that Changan Qiyuan E07 is equipped with the world's first mass-produced Mini COB star ring smart full-color interactive screen developed by Jufei Optoelectronics, marking the first time that its Mini LED direct display technology has been successfully applied to commercial vehicles.

Faced with many competitors in the industry actively deploying the automotive LED market, Dehao Runda is committed to finding new development opportunities in this segment through strategic adjustments and business focus. In the future, as the project advances and the market environment changes, Dehao Runda's development process in the field of automotive LED packaging will continue to attract attention.