National Star Optoelectronics Holdings Xu Rui Zip LED chip

Currently, the domestic LED industry is faced with problems such as overcapacity, low-end products, rising costs, and price competition, resulting in serious product pressure and decline in corporate profits. Some analysts pointed out that the domestic LED industry is in the winter period.

National Star Optoelectronics Co., Ltd. Xu Rui Photoelectric is in the cold winter of the LED industry. Xu Rui photoelectric has been discontinued for 9 months, some of the key personnel have been lost, equipment is in a stagnant state, and there are certain operational risks. Xu Rui Optoelectronics achieved operating income of RMB 1,603,200 in January-August 2012 and a net loss of RMB 6,308,499. At present, the book value of the long-term equity investment of China Star Optoelectronics to Xurui Optoelectronics is 64.83 million yuan, holding a 15% stake in Xu Rui Optoelectronics. In view of the current operating status of Xu Rui Optoelectronics, the company has decided to make an impairment assessment for this long-term equity investment of Xu Rui Optoelectronics. The provision amount is expected to be between RMB 37 million and RMB 41 million and the reporting period will be 2012. year.

Under the above circumstances, National Star Optoelectronics announced on the evening of January 17th that it decided to increase 50 million yuan for Xurui Optoelectronics. Upon completion of the capital increase, Xu Rui photoelectric will become a subsidiary of China Star Optoelectronics.

At present, Xu Rui photoelectric registered capital of 205 million yuan, total equity of 2.05 billion shares, including shareholders, including SemiLEDs, National Star Optoelectronics, Beijing Long Po Optoelectronics Co., Ltd., Zhejiang Shenghui Lighting Co., Ltd., Beijing Aier Yidi Investment Co., Ltd. The company and six companies in Foshan Nanhai High-Tech Industrial Investment Co., Ltd. Among them, SemiLEDs holds a share of 49%, and Guoxing Optoelectronic holds a 15% stake.

First of all, SemiLEDs transferred its 33.43 million technology shares to other shareholders without compensation, including the transfer of its 12.15 million shares of Asahi Optoelectronics, which are legally held by China Star Optoelectronics. Therefore, the shareholding of National Star Optoelectronics will increase from 15% to 21.11%. Under the above premise, Xu Rui Optoelectronics has reduced its existing share capital by 4.0966:1. The total share capital has been reduced from 205 million shares to 50 million shares, with a par value of 1 yuan each, and the registered capital has been reduced from 205 million yuan to 50 million yuan.

Secondly, Guoxing Optoelectronics purchased 50 million shares of Xurui Optoelectronics with 50 million capital increase. Xu Ruiguang’s registered capital increased from 50 million yuan to 100 million yuan, and the total share capital increased from 50 million shares to 50 million shares. 100 million shares, other shareholders abandon the priority of new shares.

As of August 31, 2012, Xu Rui Optoelectronics audited total assets of 543 million yuan and net assets of 174 million yuan. Xu Rui photoelectric converted to 50 million shares in the above manner, the equivalent of 3.48 yuan per share of net assets, while the National Star Photoelectric Co., Ltd. increased the subscription of 50 million shares, the price per share is only 1 yuan, on the surface it looks It is very cost-effective for Xu Rui photoelectric to increase capital. Moreover, China Star Optoelectronics will also acquire a controlling stake in Xu Rui Optoelectronics.

However, at present, the LED industry has not yet recovered, and National Star Optoelectronics also acknowledged that the increase in the investment of Xu Ruiguang with 50 million yuan still involves fierce competition and the risk of asset impairment caused by falling prices. Moreover, Xu Rui photoelectric has been discontinued for 9 months, the company needs to take measures as soon as possible to resolve Xu Rui photoelectric normal production and operation needs.

The company stated that this increase in capital Xurui Optoelectronics is a strategic layout of Guoxing Optoelectronics' expansion of the industrial chain. By injecting capital and technical strength into Xurui Optoelectronics, the company will integrate the existing product demand of National Star Optoelectronics, so that Xu Rui Optoelectronics' production will gradually become normal. To avoid the risk of bankruptcy and liquidation of Xurui Optoelectronics, thereby reducing the possibility of the company continuing to impair the long-term equity investment of Xu Rui Optoelectronics.

The business of National Star Optoelectronics and Xu Rui Optoelectronics is similar, and the integration of National Star Optoelectronics with Xu Rui Optoelectronics may be relatively easy. China Star Optoelectronics' acquisition in the downturn of the industry may in particular provide the conditions for making up for the losses caused by the previous serious losses, which may be a wise choice. However, the effect of holding Xu Rui photoelectric still needs time to test.