EnjoyLED

What factors lead to loss during epdemic(COVID-19)

In 2021 epidemic(COVID-19) , the company achieved a total operating income of 1.599 billion yuan, a year-on-year increase of 22.7%; the net profit attributable to the parent was -370 million yuan, compared with -37.844 million yuan in the same period last year, and the loss margin expanded.

Performance drivers are divided into internal and external factors::

Internal factors:
1. Some products of the company are positioned at the low end, and the gross profit margin of the products is low;
2. During the reporting period, due to the long disposal time of the company's Huizhou Industrial Park, the company's research and development of high-end light source products and the development of energy storage business were less than expected due to financial constraints;
3. During the reporting period, the Company's provision for impairment of assets such as goodwill, equipment and inventories increased significantly compared with the previous period.

External factors:
1. In 2021, due to the better prevention and control effect of my country's new crown epidemic(COVID-19) than the global epidemic, manufacturing orders have increased to a certain extent in the first half of the year. However, in the second half of the year, with the emergence of new mutated viruses and the impact of longer foreign freight shipments, coupled with the repeated epidemics, many people's incomes have been greatly affected, consumer confidence has been greatly impacted, consumption has been downgraded, and terminal product sales have moved. Generally slow down, and the overall market declines significantly;
2. In 2021, due to the gradual effect of my country's real estate regulation and control, the growth rate of the domestic real estate market has slowed down, and a large number of land have been unsold. Periodic overcapacity in application production capacity, leading the company to face greater price competition pressure;
3. Affected by the Sino-US trade war, some raw materials, such as plastic particles, silica gel, phosphors, copper materials, lithium batteries, etc., have experienced price increases of varying degrees, resulting in an increase in the production cost of the company's products and a decrease in gross profit margin.

Based on the medium and long-term development plan, in 2021, EJLED will strategically adjust the customer structure and product structure, increase the proportion of products with high gross profit, and control the proportion of products with low gross profit. The LED packaging business will achieve sales revenue of 253,817,207.16 in 2021. Yuan, down 43.55% from the same period of last year, accounting for 15.87% of sales revenue.

During the reporting period of epidemic(COVID-19) , the production capacity of EJLED packaging business was 42000KK, the output was 31822KK, the shipment volume was 31901KK, the capacity utilization rate was 75.77%, and the overall product shipment yield rate was 97.51%, of which the wafer yield rate was 97.12%, which was higher than that of 2020. It increased by 1.68%, which is the industry-leading level. The man-machine ratio is 1:20, which is 25.0% higher than that in 2020, which is the industry-leading level. The gross profit margin is 6.80%, and the gross profit margin is up 2.19% year-on-year.

However, judging from the quarterly report disclosed on April 30, EJLED achieved a total operating income of 213 million yuan in the first quarter of 2022, a year-on-year decrease of 22%; the net profit attributable to the parent was -35.06 million yuan, compared with -18.487 million yuan in the same period last year, Losses are still expanding. In terms of operating costs, it was 183 million yuan, a year-on-year decrease of 17.9%, lower than the 22% decline in operating income, and gross profit margin decreased by 4.3%. The period expense ratio was 28.7%, an increase of 8.8% over the previous year during epidemic(COVID-19) .