Net profit increased by 158.44% year-on-year. What did Hongli Zhihui do in 2017?

“In 2017, the competition in the LED lighting market is still fierce, the cost of materials is rising, the RMB continues to appreciate, and the LED production base in Nanchang, Jiangxi is gradually improving. Hongli Zhihui has overcome many difficulties and timely adjusted the company’s business strategy, which is common to all colleagues. Under the hard work, Hongli Zhihui achieved good results in 2017.” Li Guoping, chairman of Hongli Zhihui, said.

On April 21, Hongli Zhihui released its 2017 performance report. During the reporting period, Hongli Zhihui achieved operating income of 3.699 billion yuan, a year-on-year increase of 63.82%; net profit attributable to shareholders of listed companies was 353 million yuan, an increase of 155.84% over the same period last year.

According to the report, in 2017, Hongli Zhihui focused on its main business, focusing on the main business of LED packaging business, LED automotive lighting business and Internet car owner service. Under the overall strategy of the company, all major business segments have ushered in significant development.

LED packaging business

First, with the further increase in the penetration rate of LED lighting, the market demand for LED lighting has grown steadily, and the LED packaging industry has shifted to the domestic market. The scale of LED packaging business of Hongli Zhihui has continued to expand. Secondly, the competition pattern of LED packaging in China has changed, and the capacity concentration has further increased. The impact of factors such as promotion, Hongli Zhihui's LED packaging capacity scale increased significantly compared with the beginning of the year; at the same time, in order to improve management and production efficiency, Hongli Zhihui will integrate and renovate the LED packaging production base according to the overall planning in early 2017. The main production capacity of Maid has been smoothly relocated to Jiangxi Hongli.

Of course, on the basis of consolidating the competitive advantages of white LED lighting and packaging, Hongli Zhihui has also successfully entered the professional application fields such as car-level LED packaging, UV LED packaging and VCSEL.

In this context, 2017 Hongli Zhihui LED packaging business revenue was 3.114 billion yuan, accounting for 84.17% of total operating income, an increase of 53.92%; operating profit of 213 million yuan, accounting for 67.23% of the company's operating profit, year-on-year Growth of 20.01%.

LED car lighting business

With the trend of LED lighting becoming the future of automotive lighting, the penetration rate of LED in the field of automotive lighting is constantly improving. Hongli Zhihui is in the three stages of vehicle-level LED packaging, LED lighting intelligent module and LED automotive intelligent lighting. Azimuth into the LED headlight market.

As a pioneer in the LED automotive lighting industry, Hongli Zhihui entered the LED commercial vehicle lighting business through its subsidiary Fo Da Signal in 2007. The products are mainly sold to overseas markets, and LED light sources account for 100% of the light source of its lamp products. The main customers are Hella, Bosch, Magna, etc. The products have been applied to commercial vehicles of well-known car companies such as Volvo and Mercedes.

In September 2017, it acquired a 56% stake in Yishan Auto Lamp, which is engaged in the supply of headlights for the automotive front-loading market. Hongli Zhihui has realized the full industrial layout of LED automotive lighting from LED packaging to vehicle lamp assembly, and has entered the LED lighting market in all directions. The main customers include Geely Group, Great Wall Group, BAIC Group, Dongfeng Group, Changfeng Group, etc. Well-known car companies.

According to the financial report, in 2017, Hongli Zhihui LED automotive lighting business realized operating income of 263 million yuan, accounting for 7.11% of total operating income; realized operating profit of 495.615 million yuan, accounting for 15.64% of the company's operating profit, down 14.19% year-on-year.

Internet car owner service

In June 2017, Hongli Zhihui successfully completed the issue of the purchase of shares to purchase 100% equity of Speedy Network. The company holds 100% equity of Speedy Network and is a wholly-owned subsidiary of the company. Its main business provides Internet marketing for customers. Business and automotive internet service business.

According to the financial report, in 2017, Hongli Zhihui Internet car owner service realized operating income of 217 million yuan, accounting for 5.88% of total operating income.

Undoubtedly, Hongli Zhihui can achieve good results in 2017, naturally it is inseparable from the efforts and efforts of the past year. So, what has Hongli Zhihui done in the past year? Mainly reflected in the following four aspects:

Integrate LED packaging business into professional application fields

In 2017, in order to improve management efficiency, Hongli Zhihui merged the production capacity of its subsidiary Smide into Jiangxi Hongli, and the main production management team of Smale was gradually integrated into Jiangxi Hongli. At the same time, Hongli Zhihui successfully implemented the “SMD Construction Project” of the fundraising project, expanded the production scale of LED brackets, LED packages and other products, and successfully entered the professional application fields such as LED-level LED package, UV LED package and VCSEL.

Focus on LED main business, all-round into the LED lamp market

With the increasing demand in the LED market, in order to make the company more competitive in the LED industry, in recent years, the industry layout has been carried out in the middle and lower reaches of the company's LED industry chain. After years of hard work, the company's layout in the LED business field has achieved remarkable results and has been widely recognized by the market and the industry.

In 2017, the company signed a strategic cooperation agreement with Jingyuan Optoelectronics to ensure the supply of car-scale LED chips. In September 2017, it acquired a 56% stake in Yishan Auto Lamp, which is engaged in the supply of car lights in the automobile front-loading market. The company has entered the LED lamp market in all aspects in the three stages of car-level LED packaging, LED lamp intelligent module and LED car intelligent lighting.

Increase R&D investment and maintain industry leadership

In 2017, the company invested R&D expenses of 175.81 million yuan, accounting for 4.75% of total operating income. Continuously introduce new products and new technologies, such as: high-efficiency COB, LED filament, headlights-IV, PPL anti-vulcanization technology, all-inorganic UV LED hermetic packaging and so on.

Improve the incentive system and promote enterprise development

In March 2017, the company's first employee stock ownership plan purchased 3,668,543 shares of the company's shares through the Shenzhen Stock Exchange trading system in a secondary market centralized auction. In January 2018, a restricted stock incentive plan was implemented for the 54 core backbones of the white LED device segment.

According to the high-tech LED inspection annual report, the next development strategy of Hongli Zhihui will be based on the LED packaging business segment, and fully expand the LED automotive lighting business. The Internet vehicle owner service segment will develop rapidly and adopt “focus on the main business and industry gathering”. Business strategy, open up new profit growth points, and accelerate the realization of the company's strategic goals.

It is worth mentioning that Hongli Zhihui's 2018 plan performance target is: operating income increased by 30% compared with 2017; net profit increased by 30% compared with 2017.

In addition, Chairman Li Guoping also put forward ideas and ideas for the future development of Hongli Zhihui:

1, LED packaging sector, to achieve the world's leading high-end white LED packaging, and strive to break the business income of 7 billion in the next five years.

2, LED car lighting, in the next three years to strive for domestic leading, into the international mainstream car factory. As the penetration rate of LED automotive lighting continues to increase, especially in the future, the penetration of LED smart headlights continues to increase, and the company will “recreate a Honglizhihui” in the entire LED automotive lighting sector in the future.

3. In the future, we will continue to increase investment in professional applications such as VCSEL, MINI LED, and Micro LED to maintain industry leadership.

4. The Internet car owner service extends to downstream financial intermediation services and maintains steady growth.

5. Focus on the main business and sort out the company's equity investment projects that are not part of the LED packaging business, LED automotive lighting business and Internet car owner service, and reasonably withdraw.

Summary: From the perspective of future development, Hongli Zhihui will actively increase the investment in professional application fields and expand the LED packaging business on the basis of consolidating the advantages of the existing white LED packaging business. At the same time, vigorously develop LED automotive lighting business, expand the share of international mainstream car manufacturers, enhance the company's overall profitability and comprehensive competitiveness.

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