Given the rumor that Neo-neon has abandoned packaging production and even sold the factory, the reporter for “New Industry”magazine of Gaogong Industry Research Institute called Neo-neon’s related director. LED division director Mr. Liao denied the rumor, saying “No way. We are doubling our effort in packaging and the current capacity has reached 100KK.”
 
Mr. Liao added that despite of the company’s shrinking financial results, it would not halt expansion in LED business. Recently 4 MOCVE reactors have been added and Jiangmen project has seen strengthened negotiation with Guangdong Provincial Department of Science and Technology.

Starting up with light fixtures, in recent years Neo-neon has made painstaking effort in tapping into LED market and following 2010’s substantial investment in epitaxy and chip in Jiangmen, announcements show that Chinese market has become the resource for the company’s majority profit.

However, Neo-neon’s recently-released annual report indicates that through the end of this March, the whole year has gone from surplus to deficit, coming to a dramatic loss of 1.43 billion yuan, with provision reaching 900 million yuan.

During the reporting period, every category product experienced its respective decline, including LED decorative luminaires slipping up to 36.1% from 2010’s 869 million HKD to 2011’s 555 million HKD, and LED general lighting product dropping 15.6% from 2010’s 378 million HKD to 2011’s 319 million HKD. Gross loss rate for the whole year achieves 53.9%.

“The decline of every category product is mainly caused by entire pessimistic chip market, but we have to move forward along this LED road of no return.” commented Mr. Liao.  The financial report explains that losses come from the confirmed impairment loss of 345 million yuan in property, workshop, equipment, general lighting and intangible assets, reduction in other gaining, distribution expense and administrative expenditure and so on.