[High-tech LED News] Zhen Mingli expects a consolidated loss for the six-month period ending September. Zhen Mingli said that despite the increasing orders from Taiwanese customers, the bleak outlook in the European market has made customers generally more cautious about placing orders, resulting in lower than expected turnover.
Zhen Mingli pointed out that the soaring prices of raw materials, rising labor costs and the appreciation of the renminbi have led to a decline in gross profit margins; the deterioration of the economic environment has led to an increase in the provision for bad and doubtful accounts receivable; and the expansion of business to the equipment and equipment of the upstream epitaxial wafers and chips. The depreciation expense has increased significantly, and the supply of MOCVD has exceeded demand, resulting in a decline in market prices and fierce competition in chip factories, which has led to a decline in gross profit margin.
Zhen Mingli will improve the efficiency of resource allocation and make it more competitive. Resources will be effectively redistributed to build a sound organizational structure and achieve strategic growth through cost-effectiveness, streamlined organizational structure, improved performance management efficiency, and better positioning to implement long-term incentive programs linked to employees.
In addition, Zhen Mingli has offset the negative impact of the European recession by increasing the share of the mainland domestic market and increasing the proportion of high value-added products in its business. During the year, the mainland market has gradually become the main source of profit and driving force for its growth. Zhen Mingli believes that the overall operation and financial situation remain stable.
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