800 million yuan issued debts and blood was approved, Dehao Runda LED business failed to meet expectations

On March 7, Dehao Runda (002005.SZ) issued a notice stating that the CSRC has approved its application to publicly issue corporate bonds with a face value of not more than 800 million yuan. According to the previously announced bond issuance plan, Dehao Runda intends to use it to repay 327 million short-term loans, with the remainder supplementing liquidity.

In fact, since 2009, Dehao Runda has raised funds through various financing methods such as private placement, short-term financing bonds and corporate bonds. According to the statistics of the High-tech LED Industry Research Institute (GLII), the total amount of financing plans issued as of the end of 2012 reached about 7 billion yuan, but the actual fund-raising amount was only 4.3 billion yuan.

According to the previous announcement of Dehao Runda, although the company has completed two non-public issuances since 2009, even if it is applying for corporate bonds of not more than 800 million yuan, the total amount of funds raised by the company is still compared with the actual total investment. Not enough.

According to relevant analysts of the High-tech LED Industry Research Institute, the overall return time of the LED industry is generally long, and the phenomenon of triangular debt is still relatively serious. Since Dehao Runda has just completed the acquisition of the shares of NVC Lighting, it will inevitably face the problem of insufficient cash flow.

As LED upstream technology gradually matures, the industry has changed from technological competition to capital and scale competition, which will put forward higher requirements for corporate liquidity. Judging from the financial data of related listed companies involved in the LED business, enterprises generally have a long period of time for the collection of accounts receivable, and the use of funds for inventory purchase and reserve is large.

"In recent years, Dehao Runda has spent a lot of money to quickly complete the layout of the LED industry chain, but the input and output are always not proportional, and the LED business will take some time to profit." An industry source pointed out.

According to the 2012 performance report of Dehao Runda, the company achieved operating income of 2.824 billion yuan in 2012, down 8% from the same period of last year; net profit attributable to shareholders of listed companies was 168 million yuan, down 57% from the same period of last year; LED Business income growth is far from meeting the company's expectations, and government subsidies are decreasing year by year, which makes DeHao Runda's capital flow problem worse.