'Green' lighting lifts Neo-Neon earnings
Neo-Neon Holdings, the world's largest decorative lighting business, aims to increase investment in light-emitting diode (LED) production after high demand boosted first-half earnings.
The Kowloon-based firm yesterday reported that interim net profit climbed 134.8 per cent to HK$99.3 million, from HK$42.3 million a year earlier, mainly owing to strong global sales of energy-efficient lighting products and improved performance at its chips and packaging plants.
Total turnover reached HK$730.1 million, up 31.7 per cent from HK$554.3 million, owing to healthy demand in several large markets, including the mainland, the United States and Russia.
Gross profit margin grew to 33.1 per cent from 28.9 per cent the previous year.
Sales of LED decorative lighting rose 28.1 per cent year on year to HK$354.5 million, making up 48.5 per cent of Neo-Neon's first-half revenue.
The firm's LED-based general lighting sales rose 228.5 per cent year on year to HK$165.5 million, or 22.7 per cent of turnover, as the 'green' products are adopted in streetlighting projects across the mainland.
As part of the central government's goal to cut the country's carbon dioxide emissions up to 45 per cent by 2020, many major cities are replacing their old incandescent and fluorescent streetlights with LED lighting.
Within the next three years, an estimated 2.5 million LED streetlights are set to be used in these projects.
Besides domestic demand, chairman and chief executive Fan Ben said Neo-Neon will also target LED streetlighting projects in the US and Europe.
'The group will enhance its [LED] research and development, and look for merger and acquisition opportunities to expand our market share,' Fan said in a report filed with the Hong Kong stock exchange yesterday.
In June, Neo-Neon announced a 400 million yuan (HK$456.92 million) investment in a new manufacturing plant in Guangdong that will produce 2 billion yuan worth of LED wafers and chips annually by 2013.