Tianlong Optoelectronics plans to jointly establish LED equipment company with Huasheng Optoelectronics Co., Ltd.

Recently, Tianlong Optoelectronics announced that it has signed a contract with Huasheng Optoelectronics Co., Ltd. to jointly establish a Sino-foreign joint venture company in Changzhou, which is mainly engaged in the research and development, production, sales and after-sales service of MOCVD equipment and epitaxial processes.

Tianlong Optoelectronics invested 533.333 million yuan, accounting for 56% of the shares, and Huasheng Optoelectronics invested RMB 35.238 million in intangible intellectual property investment and RMB 666,670 yuan in capital investment, accounting for 44% of the total.

Long Optoelectronics plans to cut into the market at the end of 2012 and sell 1-2 MOCVD equipment to verify the performance of its products and establish its brand. In 2013, if only 3% of the domestic market, that is, 8 MOCVD equipment sales, the industry scale will reach 100 million yuan; by 2014, 8.5% of the market, sales will exceed 450 million yuan; by 2015, If the market share increases to 15%, the industry scale exceeds 900 million yuan.

In terms of profitability, according to Huaying's operating model, even if it is lower than the current sales price of MOCVD equipment by 30%, the project profit can still be higher than the competitors, and the gross profit margin is expected to reach 55.8%.

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