San'an Optoelectronics Q2 revenue increased by 80% year-on-year, industry insiders said that inventory decline is the focus.

After the close on July 29th, Sanan Optoelectronics, the leader of domestic LED chip, released its 2021 semi-annual results. Data show that the company's revenue in the second quarter was 3.397 billion yuan, an increase of 80.11% over the same period last year. However, the company's net profit rose only 2.14% year-on-year in the first half of the year, indicating that revenue growth is not as fast as cost. A number of brokerage analysts told the Financial Associated Press that the performance of San'an Optoelectronics is in line with expectations and is optimistic that the volume of Mini LED in the second half of the year will bring good results to the company.

According to the semi-annual report, San'an Optoelectronics earned 6.114 billion yuan in the first half of the year, up 71.38 per cent from a year earlier, but its gross profit margin fell to 22 per cent from 30 per cent in the same period last year. If the government subsidy of 580 million yuan in the first half of the year is deducted, the net profit after deduction is basically the same as that of the same period last year, at about 300 million yuan.

It is worth noting that the inventory value of LED chips of San'an Optoelectronics decreased by about 688 million yuan compared with the previous year, of which the inventory amount of LED chips decreased by 464 million yuan at the end of the second quarter.

"the results [of the company] are very good, focusing on the decline in inventories," Fang Jing, chief analyst at Cinda Securities Electronics Industry, told the Financial Associated Press. In addition, a person in the industry said that, Mini LED will have a lot of physical objects from the second half of this year, and is optimistic about the good that the market volume in the second half of the year will bring to the company's performance.

For the company's main LED market, benefit from the growth of Mini LED business, as well as infrared, ultraviolet, plant lighting and other emerging markets penetration increase, downstream demand is strong. San'an Optoelectronics expects that the prices of some products will continue to rise in the future. And for this year's market attention of Mini / Micro LED, San'an Optoelectronics said that in addition to the TV market, Mini / Micro LED is also widely used in display fields such as tablet computers, notebooks and car screens, with monthly shipments increasing month by month, and this category may usher in large-scale applications in 2021.

In addition, the business of compound semiconductors maintained rapid growth in the first half of the year, and the revenue of the relevant subsidiary, San'an Integration, was 1.016 billion yuan, an increase of 170.57% over the same period last year. The company said that it had received customer orders accumulated to next year, and the new capacity expansion had entered the stage of mass production. Effective capacity will be gradually released in the third quarter, and the problem of insufficient capacity will be alleviated.

Cinda Securities believes that the company will usher in rapid growth in the next three years, and is expected to achieve a net profit of 21.57 / 30.19 / 3.953 billion yuan respectively in 21-23 years.