Epistar’s net loss after tax in Q3 reached 1.09 billion yuan, and Q4 focused on promoting new LED lighting product chips

Epistar, the leading LED epitaxial manufacturer, today announced its 2015 Q3 financial report, which showed that the net loss after tax in Q3 reached 1.09 billion yuan (NT$, the same below, equivalent to about 212 million yuan), and the EPS loss per share was 0.96 yuan, mainly due to the impact of LE The decline in D-wafer market prices has led to a decline in inventory prices, resulting in a single-quarter operating loss of up to 1.244 billion yuan (equivalent to RMB 242 million). This is also due to the impact of insufficient demand for LED backlight orders. At this stage, there are still many LED lighting orders, but the average unit price is low, which affects the overall operating performance.

The market estimates that Epistar’s Q3 utilization rate has dropped to 50%~60%, and its gross profit margin has become -5.18%. Compared with the 9.23% gross profit margin in Q1 of 2015, if Epistar's performance in this quarter is compared with Q1's results, it can be said that it has lost all its profits in Q1. The total EPS in the first three quarters of 2015 was -0.33 yuan.

The price of lighting-related LED chips is very fierce, and the overall gross profit margin is reduced. There are heavyweight Chinese chip factories competing in the lighting market. As for Epistar, it has previously changed the design of LED chips shipped to LED bulb manufacturers. It has completed this cost-effective product and supplied it to the market to meet the ultra-low-price LED lighting market demand.

Epistar’s operational focus in Q4 of 2015 will be on the promotion of new LED lighting product chips and the strengthening of special niche markets, and it hopes that LED backlight orders will pick up. However, as new global LED chip production capacity is opened in Q4, it is likely that it will still be affected by falling prices, and we pay close attention to it.

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