After two years of planning, Dehao Runda has finally succeeded in raising 2 billion yuan through a private placement. On the evening of November 1, the company announced its intention to issue 368 million shares at a price of 5.43 yuan per share. The proceeds will be raised from five institutional investors, including Minsheng Securities, China Life Insurance Fund Management, Gaogaoxin Investment Group, Jianxin Fund, and Beixin Ruifeng Fund Management.
The total funds raised are estimated to be around 2 billion yuan, with issuance costs amounting to approximately 30.88 million yuan. After deducting these expenses, the net amount of capital raised is about 1.969 billion yuan. Notably, this offering represents a 14% premium over Dehao Runda’s closing price of 4.78 yuan per share on the day of the announcement.
This isn't the first time the company has attempted to raise capital. In 2015, Dehao Runda initially planned to raise 4.5 billion yuan through a fixed-price offering at 11.89 yuan per share. However, the company later withdrew the plan, citing factors such as the capital market environment and its business development strategy.
In April 2016, the company re-announced its intention to conduct a non-public offering, targeting no less than 5.43 yuan per share, with up to 368 million shares issued to no more than ten specific investors. The fundraising was intended to support LED flip chip and chip-scale packaging projects. Despite the plans, the offering did not materialize for some time. Analysts at the time suggested that the company's poor performance had not significantly hindered its ability to raise capital.
Dehao Runda originally started as an exporter of small household appliances. However, it faced a sharp decline in this business due to market changes in 2008. In 2009, the company shifted its focus and entered the LED industry, establishing a dual-business model of "small appliances + LED." However, its expansion into the LED sector has been challenging.
Since 2009, the company has been actively working to build its presence in the LED industry. Through acquisitions and the establishment of its own R&D centers, Dehao Runda has involved itself in various stages of the LED supply chain, including epitaxy, chip packaging, and module applications.
In terms of revenue distribution, both the small appliance and LED businesses accounted for roughly half of the company’s income. However, recent financial results have been disappointing. The 2016 semi-annual report showed that the LED business generated 931 million yuan in operating income, a slight decrease of 5.53% compared to the previous year. Meanwhile, the small appliance segment saw a more significant drop, with operating income falling by 27.42%.
On October 30, 2017, Dehao Runda released its third-quarter report, revealing its first loss in the period from January to September. While the company reported an 8.78% increase in operating income to 3.187 billion yuan, it also forecasted a net profit for the full year of between 150 million yuan and a loss of 100 million yuan, reflecting a year-on-year decline of -572.89% to -415.26%.
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