Zhen Mingli's half-year loss of HK$102 million gross profit margin slipped to 13.7%

[High-tech LED News] Zhen Mingli (01868.HK) recently released its 2011 semi-annual financial report. As of September 30, Zhen Mingli had a revenue of 788 million Hong Kong dollars in the first half of the year, a year-on-year increase of 7.9% and a loss of HK$102 million.

The financial report shows that the revenue growth of Zhen Mingli in the first half of the year was entirely from the HCI overseas company acquired at the beginning of the year. HCI overseas company contributed HK$219 million. If the income of HCI overseas company was removed, the revenue of Zhen Mingli in the first half of the year was only 569 million Hong Kong dollars, which was down year-on-year. 22.1%.

Fan Banghong, chairman of Zhen Mingli, pointed out that the weak economy in Europe and the United States directly led to a decline in customer orders. The company has offset the impact of the economic recession in the European and American markets by increasing the market share in the Chinese market. It is expected that the Chinese market will become the company's main source of profit.

The financial report also showed that the gross profit margin of Zhenmingli products has dropped rapidly from 13.1% in the same period last year to 13.7%, a drop of nearly 20%. Zhen Mingli said that due to soaring raw material prices, rising labor costs and appreciation of the renminbi, the gross profit margin of the products declined.

The company expanded its LED epitaxial wafer business upstream, which led to a significant increase in equipment depreciation expenses. In the first half of the year, Zhen Mingli also received a subsidy of 43.1 million yuan from domestic local governments for investing in LED upstream. It is reported that Zhen Mingli has 19 production units of MOCVD, with a monthly capacity of 55,000 LED epitaxial wafers.

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