How the demise of a low-end lighting chip packaging company in Shenzhen signals the wider danger posed to China’s economy
- Shenzhen Unionlight Technology Co said it is dissolving the business after facing ‘persistent losses’
- Maker of LED packaging equipment has suffered from the impact of Covid-19 and a steep reversal of fortunes for China’s housing market
A listed Shenzhen lighting chip packaging company closed up shop last week after nearly two decades of operations amid heavy losses, as China battles a variety of economic headwinds.
The Shenzhen Unionlight Technology Co, a chip packaging company focused on LED products, said in a corporate announcement last Tuesday that it was dissolving the business after “persistent losses”, in a fresh sign of the pressure on corporate profits in China currently.
The company, incorporated in 2003, was listed on China’s third board in 2016 and was seen as one of several promising small tech companies at the time.
However, the maker of LED packaging equipment, has suffered amid a broad economic slowdown, the impact of Covid-19 and a steep reversal of fortunes for China’s housing market. Its revenue increased from 31.25 million yuan (US$4.39 million) in 2016 to 51.14 million yuan in 2019, but plunged to 16.55 million yuan in 2021 from 40.32 million yuan in 2020.
Sales slumped to 43,600 yuan in the first half of 2022 as orders vanished, producing a net loss of 1.31 million yuan, as the company’s headcount dropped to 22 employees.