ledsign.jpgAnother day, another Chinese company floats on London's AIM market. This time is Shenzhen-based LED International,a maker of light-emitting diode screens and other lighting products.

Any visitor to China's metropolises can't help but notice the
proliferation of electronic signs so it looks like LED International
has tapped into a good market.

LED technology is increasingly replacing traditional incandescent
and fluorescent sources in a growing range of indoor and outdoor
applications because LEDs last longer and use less energy.

The company cites data from a Chinese trade body that says China's
LED output grew from 45bn to 50bn units in 2004, about half of which
were supplied by local LED makers.

To date, LED International's largest application area has been LED
screens or signboards but the company is also expanding into smaller
LED lighting products — such as those used to light guardrails and
staircases.

The company's principal market is the PRC but it also wants to
export – hence the flotation — and takes heart from statistics of the
US Dept of Energy that forecasts the US will replace more than half of
its existing incandescent and fluorescent lights with semiconductor LED
lamps by 2010.

So what's so special about LED International? In its listing
document it claims one of its key strengths is it does its
manufacturing in China. Who doesn't ? More interestingly, it says it
has 12 design patents and one trademark, LEDTV. The patents cover the
way the LEDs are arranged, allowing LED International to use less LEDs
to cover a given area of signage, while maintaining the same visual
effect.

What really caught my eye about LED International is its CEO, Peter
Hong-Ming Chau, who was previously chairman of the Chinese branch of
Publicis, the advertising agency. The CFO also previously worked for an
Asian advertising agency. The CTO, Zhi-Hui Tian, is the technical
brains behind the company and claims 13 years experience in LED product
design. He developed key technologies and his patents have been
assigned to LED International.

Frustratingly, the company doesn't appear to have a website and its nominated adviser (nomad), Corporate Synergy has not yet published the listing document on its website, even though the shares started trading today.

There is growing concern about the way some nomads are rushing to list China plays on AIM — see this EngagingChina post — and the somewhat sketchy information that is made available to private investors.

For what its worth, the company claims to have been profitable since
2005 and has experienced a “significant increase” in turnover in the
year to 30 June 2006. Profit margins are claimed to be 32%.

As seems common with many AIM newcomers, only a tiny percentage of the company is being floated, just 3.65%, to raise £500,000.

LED International has an interesting business, and one that is not
exclusively focused on China, although thats where most revenues come
from today. Nevertheless, cautious investors might want to wait to see
a set of financial results before deciding.


Technorati : , ,

email