Established in 1981, Haohong Industrial Co., Ltd. is a Taiwan LED midstream packaging manufacturer. In 2011, the total revenue of Haohong was NT$4.1 billion, down 21% year-on-year. In addition to some special-purpose LED packages, the company's products cover almost all LED applications, including SMD LEDs, LAMP LEDs, infrared LEDs (IR LEDs), various LED package components, displays, backlights and lighting. .
Shun's product line is dominated by SMD LEDs, LAMP LEDs and infrared LEDs, with SMD LEDs accounting for 48%, LAMP LEDs accounting for 11%, and infrared LEDs accounting for 40%. LAMP LED gross margin is about 11%-13%, mainly used in outdoor display and electronic products, customers include Samsung, Hewlett-Packard, etc. SMD LED's gross profit margin is about 15%-18%, mainly used in backlight, lighting, display and Electronic peripheral products, customers including Changhong, Haier, TCL, etc., infrared LED gross margin of about 13% -15%, mainly used in remote control, electric meters and other products, customers include HP, LEXMARK, KODAK and Foxconn.
The production base of Shunhong is mainly located in Taiwan and Guangdong. Taiwan mainly produces epitaxial wafers and chips. The Dongguan base mainly produces some chips, packaged devices and application products. The Guangzhou base mainly produces commercial lighting products. Shunhong's customers are all over the world, but more than 95% of its customers are concentrated in mainland China, Taiwan, Japan and South Korea. The revenue from mainland China accounts for more than 75% of its combined revenue, because the assembly and production of mobile phones are mainly concentrated. In the mainland, the demand for sideview products has been driven, and the demand for infrared LEDs in consumer electronics such as remote controls has increased and the demand for LED street lamps has increased due to the implementation of energy-saving and emission reduction by local governments.
Yuhong's product portfolio and major competitors
Source: Yu Hong
The production area of ​​the main products of Haohong
Source: Yu Hong
In 2011, operating income fell sharply, and gross profit margin rebounded.
In 2011, the monthly revenue of Shunhong totaled NT$4.1 billion, a significant decrease of 21% compared with 2010. The reason is that packaged devices are the main source of revenues. The main application areas of the products are concentrated in the field of mobile phones and optocouplers. LED optocoupler and mobile phone LED packaging products have relatively low barriers to entry. The large expansion of capacity of mainland packaging manufacturers has led to a sharp decline in product prices. It is understood that the price of SMD LED products has dropped by about 30%, and the price of LAMP LEDs has dropped by 30%-50. %, price competition has intensified the decline in revenue.
Source: Yuhong, Yiguang, Dongbei
At present, Shunhong holds more than 10,000 street lamps in Wuhai, Inner Mongolia, and orders for nearly 10,000 street lamps in Yiwu, Zhejiang. In 2012, with the large shipment of street lamps and commercial lighting products, the production capacity of Shunhong lighting products will increase exponentially. Thanks to the demand for infrared LED production brought by the demand for domestic remote meter replacement, Shunhong’s revenue will be able to achieve greater growth.
From the perspective of gross profit margin, the gross profit margins of Suihong and Dongbei are relatively consistent, while the gross profit margin of Yiguang remains at a relatively high level. The main reason is that the production capacity of Yiguang is large, and it is related to Suihong and Dongbei. Compared with the revenue scale of Yiguang, which is about 3 times and 2 times higher respectively, the larger production capacity has brought significant economies of scale to Yiguang. At the same time, in terms of product structure, compared with Yuhong and Dongbei, the high-brightness SMD products with higher gross profit margins in Yiguang's products accounted for the highest proportion, which also raised the company's comprehensive gross profit margin.
Yanhong's operating income from 2001 to 2011 
Note: The 2011 Honghong Annual Report has not been disclosed, and the operating income data is the accumulated monthly revenue of the company disclosed by Yuhong.
Source: Yu Hong
Compared with Dongbei, which has the same sales scale, the overall trend of gross profit margin is relatively close, but since the fourth quarter of 2008, the gross profit margin of Haohong has been lower than that of Dongbei, mainly because of the large-size backlight application of Zhonghong. The pace of the products was slower, and the shipments of high-margin products were not as good as those of Dongbei, and the company invested heavily in the development of lighting and medium-sized backlights, which led to the company's comprehensive gross profit margin was low.
Since the fourth quarter of 2010, the gross profit rate of Yuhong has been significantly higher than that of Yiguang and Dongbei. The main reason is that Yiguang and Dongbei are greatly affected by the downturn in TV backlight. At present, Shunhong has transferred packaging, application and about 50% of its chip production capacity to the mainland, and the labor cost will be greatly improved. At the same time, with the completion of the sales channels for commercial lighting and street lighting, the gross profit margin of Shunhong is This year will be improved.
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