The stocking strength of LED lights continues to increase

Liqing's consolidated revenue in the second quarter of 2018 was NT$1.026 billion (NTD, the same below). Benefiting from the continued growth in shipments of its LED lamp modules, the revenue in the second quarter increased by 35.78% year-on-year. Still, it was affected by The price increase of some parts, the adjustment of wages in mainland China, and the adjustment period of new and old products affected the overall profit performance. The net profit after tax was 34 million yuan, and the after-tax earnings per share (EPS) was 0.49 yuan, with an annual growth rate of 44.82%, and 44.12%.

Benefiting from the continuous increase in the stocking capacity of major customers for its LED lamp module products, Lai Ching's revenue and profit in the second quarter all showed growth. Due to factors such as the adjustment period of new and old products, the increase in new customers and new orders, and related R&D expenses, the overall gross profit margin and operating profit margin in the second quarter remained at 15.99% and 3.09%, respectively. Orders for new models have been gradually added to mass production, pushing up the capacity utilization rate of each production base. It is expected that with the strong momentum of single-force orders from major customers, the replacement of old and new products will be accelerated. In addition, the company is committed to process optimization, and production line The implementation of important strategies such as automation and the expansion of benefits will help the overall operation in the second half of the year to be optimistic.

In the 1st half of this year, the revenue proportion of Liqing's automobile department is still as high as 93%. From the perspective of products, the revenue proportion of LED taillights, daytime running lights, headlights/fog lights, and lamp module products is 55%, 30%, and 10% respectively, among which, the revenue of LED headlights/fog lamps increased significantly compared with the same period of last year. In the future, as the shipment of LED headlights/fog lamps continues to grow, it will have the opportunity to become the engine driving force for the continuous improvement of the overall operation.

Looking forward to the second half of 2018, Lai Ching is optimistic that the automotive division will continue to thrive, which will boost the overall operating performance. Although the third quarter is the traditional summer and off-season for the automotive industry, it has benefited from orders for new models that have been mass-produced and shipped since the second half of this year. Since new products can enjoy a higher-than-average overall gross profit margin, it is expected that new and old products will be more profitable. With the adjustment coming to an end, optimizing the product structure, and improving production efficiency, the overall operating profit performance has created quarter-by-quarter growth momentum.