NVC lighting strong acquisition of difficult to change LED policy city status

NVC, with its new energy and low-carbon aura, despite its low P/E ratio, is still in the embarrassing situation of breaking the first day on the Hong Kong Stock Exchange. "There should be a lot of reasons. Our net profit in 2009 is only over 10 million. In fact, the US dollar, in fact, Softbank Safari, Goldman Sachs and other shareholders have priority distribution rights, this part is to be transferred to the financial statements, our 2009 net profit of more than 40 million US dollars, this is invisible profit, ordinary investors may not understand. "When Wu Changjiang was interviewed by the reporter of China Business News, he broke down on the first day.

"It’s been made to make A shares."

If NVC is listed on the A-share market, and the current P/E ratio of Foshan Lighting (000541.SZ) and Snowlight (002076.SZ) can be used as a comparison, NVC Lighting's P/E ratio may exceed 30 times, which is better than its performance in Hong Kong. The listing of the Stock Exchange has doubled, and the background of new energy and low-carbon industries will not break on the first day.

NVC Lighting chose Hong Kong and issued 728 million shares at an issue price of HK$2.1 per share, eventually raising HK$1.53 billion. However, NVC Lighting suffered a break on the first day of the issue, and then fell to 1.95 Hong Kong dollars per share.

"Our debt ratio is only 5%, not for the money. NVC is set to be the 'industry first, world brand' from the start of business. Hong Kong is an international financial metropolis, and the reputation of our products is improved. Greater," said Yin Wei, executive vice president of NVC Lighting.

Wu Changjiang, founder and president of NVC Lighting, complained in the interview: "In 2009, the net profit of more than 10 million US dollars was equivalent to a few cents per share, and the net profit of more than 10 million US dollars was Softbank. After shareholders such as Goldman Sachs fulfilled the priority distribution rights, their part was to be transferred back to the financial statements. In fact, our net profit in 2009 exceeded US$40 million, equivalent to nearly HK$4 per share, which is a very good performance. Wu Changjiang believes that during the global performance, it coincided with the Greek bond crisis, and the global stock index generally fell. "The big environment is not good. Even the investment bank CEO of our shareholder Goldman Sachs feels that 'NVC is selling in such a bad environment. Going out is a miracle."

Wu Changjiang also told reporters about a global event. "Those international fund managers believe in data models. Manufacturing companies, channel sales companies, and brand companies all have their own valuation evaluation systems. In the international arena, there are very few companies. Both manufacturing and channel, but also brand enterprises, they classify NVC as a manufacturing company, giving a low valuation.” Wu Changjiang introduced the valuation of NVC in some funds with Chinese background It is obviously different from foreign funds. "They know very well about NVC. The funds that ultimately subscribe to our stocks all have a Chinese-funded background. They joked that 'NVC is better than making A-shares. Anyway, it is a Chinese-funded background." ”

Short board LED?

NVC Lighting's prospectus shows that in 2009, NVC Lighting's main business, LED lights (energy-saving lamps) only achieved sales of 2.51 million US dollars, accounting for 0.8%; and its 2008 data is 233 Ten thousand dollars, 0.9%.

LED lights have become the short board of NVC lighting.

“In our product composition, commercial lighting accounts for the largest proportion, followed by home lighting, etc., while in the lighting industry, the most profitable and most technically-rich equipment supply, rather than simple lighting design and manufacturing, According to the national energy conservation and emission reduction standards, our energy-saving products account for more than 60% of the main business income." Yin Wei said.

After the Spring Festival in 2010, NVC Lighting began a global performance. "The problem with the LED business is the most asked questions from fund managers." Wu Changjiang said.

Yin Wei told reporters that there is no unified standard for domestic LED energy-saving lamps. As a drafter of national standards, NVC Lighting will continue to invest in research and development of LED energy-saving lamps. "The cultivation of LED energy-saving lamps market needs to be observed, not only It is a question of changing energy-saving light bulbs. Whether it is commercial lighting, office lighting, or home lighting, what is needed is energy saving for the entire power supply equipment."

According to the information, on August 29, 2008, NVC paid a cash consideration of US$49.314 million, and issued and distributed 326,930 shares of NVC Lighting common stock to Century Group, and acquired the wholly-owned shares of WorldCom and WorldCom from Century Group. Subsidiary Sanyou, Jiangshan Phipps and Zhangpu Phipps.

In February 2009, NVC acquired Shanghai Akade, an electronic ballast manufacturer in Shanghai, China for a total consideration of approximately RMB 17.3 million.

Prior to the acquisition of WorldCom, NVC did not have energy-saving lamp production, and became the largest occupant in this field after the acquisition.

After the acquisition of Akkad, the gross profit margin of ballasts increased from 5.1% to 16% within one year. "Merger and acquisition are an important means for NVC to grow bigger quickly. We are missing and filling up." Wu Changjiang said.

Acquisition expansion is difficult to change LED policy city status

Just after NVC Lighting's huge acquisition of WorldCom, on December 23, 2009, another domestic lighting giant Zhejiang Sunshine (600261.SH) invested 13.5 million to acquire Hangzhou Hanguang Lighting Co., Ltd. held by Hong Kong Bailing Group Co., Ltd. 50% of the company's equity. “Hangzhou Hanguang Lighting is the first drafting unit of the domestic lighting industry standard and the main supplier of ODM for NVC. Through the acquisition of rich product lines, the completion of layout is the most important mode for the expansion of domestic lighting giants.” Xingye Securities New Energy Industry researcher Liu Liang said.

This view was recognized by Wang Nianchun, a researcher of Guoxin Securities' new energy industry. “NVC Lighting and Zhejiang Sunshine are similar. They all completed the expansion of the LED lamp business through acquisition. In the short term, the promotion of LED lights in China must also be promoted. Relying on policy support and relying on financial subsidies to complete the cost reduction, there is still a long way to go in the market cultivation period.” Wang Nianchun believes that the current domestic LED lights are still in the policy market stage. The research report of Hong Kong KGI is given a recommendation rating for NVC Lighting. The reason for the recommendation is that the lighting industry is strongly supported by the national policy.