23rd Oct 2006 07:01
LED International Holdings Ltd23 October 2006 Not for publication, distribution or release in or into the United States, Canada, Australia, the Republic of South Africa, the Republic of Ireland or Japan Embargoed until 7am 23 October 2006 LED International Holdings Limited ("LED International" or "the Company") Admission to AIM by Corporate Synergy Plc LED International, which specialises in the development, manufacture, and saleof LED screens and other LED products, is pleased to announce that it has raised£500,000 (gross) through a placing by Corporate Synergy and that its shares havebeen admitted to trading on AIM, with dealings to commence on Monday 23 October2006. LED International is a Hong Kong incorporated company and its business islocated in the Shenzhen province of southern China. €5,000,000 new ordinary shares have been placed at a placing price of 10p. •The market capitalisation of the Company at the placing price, is approximately £13.7 million. •The proceeds of the placing will be used to: - enhance the Group's profile internationally; - gain access to the capital markets; and - facilitate future corporate acquisitions. •Corporate Synergy is the Company's Nominated Adviser and Broker Peter Chau, Chief Executive Officer of LED International, commented: "We are delighted to be listing on AIM. This is the next important step in theCompany's growth and will enable us to take advantage of the numerousopportunities available to us, particularly our expansion in the US and Europeanmarkets, which are currently witnessing a rapid growth in the usage of LEDdisplays." AIM ticker LED Placing price 10p Number of ordinary shares prior to Admission 131,870,065 Number of new ordinary shares being placed 5,000,000 New ordinary shares as a proportion of the enlarged share capital 3.65% Number of ordinary shares in issue immediately following Admission 136,870,065 Market capitalisation of the Company at the placing price immediately following Admission 13,687,007 For further information, please contact: LED International Holdings Limited +1 646 510 0676Peter Chau, Chief Executive Officer Corporate Synergy Plc 020 7448 4400Romil PatelShane Gallwey Tavistock Communications 020 7920 3150Christian Taylor-WilkinsonMatt RidsdalePollyanna Hutchinson The admission document in relation to the Company's admission to trading on AIMwas published on 17 October 2006. Copies of the admission document areavailable, free of charge, from Corporate Synergy, 30 Old Broad Street, London,EC2N 1HT, for at least one month from 23 October 2006. Further information:Introduction The Company and its subsidiaries ("the Group") specialise in the development,manufacture, and sale of LED screens and other LED products such as signs,lamps, lighting and building illumination. The Company is seeking Admission inorder to enhance the Group's profile internationally, to gain access to thecapital markets and to facilitate future corporate acquisitions. The Group is positioning itself to be an international supplier of LED screensand other LED products. The Group has been involved in the manufacture of LED screens and products sinceFebruary 2004. During 2006, the Group has expanded by developing its distribution networkoverseas and has sought to add value through increased investment in researchand development. The Directors believe that this expansion will help to supportthe Group's existing customers, broaden its range of LED products and facilitateexpansion into new product and geographical markets. The Group's core focus has been on the provision of LED screens. The screens aremanufactured in a 'building block' format to a specific design, which allowsscreens to be assembled to suit a customer's size and definition specifications.This design also ensures that the screens are relatively easy to transport andassemble. To date, the Group's primary market has been the People's Republic of China("PRC"), but it has also supplied end products to Macau, Japan and the USA. Partof the Group's strategy is to widen its customer base to markets outside PRC. To this end, the Group has established an international sales team, which isexpected to help generate non-PRC sales revenue. Key Strengths The Directors believe the Group has the following key strengths: •The Group's production facilities are in the PRC allowing it to take advantage of the PRC's low manufacturing cost base; •the Group has expanded its distribution network by assembling an international sales team; •the technology underpinning the Group's 12 design patents covers various fields of LED application and design, and enables the Group to produce cost-effective high quality LED screens; •the Group has been profitable since 2005 and has experienced a significant increase in turnover in the year to 30 June 2006; •the Group has demonstrated high gross profit margins (32.5%in the year to 30 June 2006); and •the Group's management has substantial industry-specific experience. Products At present, the Group generates income from the sale of three basic productgroups: LED screens and displays: •The Group designs and manufactures screens or signboards, each produced to meet individual customer specifications. •In the year ended 30 June 2006, LED screens and displays accounted for 65% of total sales (2005: 81%). •The Group also rents out large LED screens under a long-term contract. LED lamps and lighting: •The Group provides LED lighting products for both indoor and outdoor environments, including lit guardrails and plug-in lights. •In the year ended 30 June 2006 this product line accounted for 24% of total sales (2005: 8%). OEM: •The Group assembles electronic components (principally onto circuit boards). •The Group operates this business stream to utilise spare capacity, which provides a positive contribution towards fixed overheads. •Because of its small scale and the relatively high indirect costs associated with OEM activity, the Directors do not consider this to be a core activity of the Group. •In the year ended 30 June 2006 this product line accounted for 11% of total sales (2005: 11%). The increase in gross margins is the result of manufacturing efficiencies beingachieved as the Group has gained operational and technological experience andeconomies of scale from increasing sales and purchasing volumes. The Group has acquired 12 design patents and one trademark, LEDTV. Thetechnology underpinning these design patents enables the Group to utilise LEDtechnology in a more efficient manner by reducing the number of LEDs requiredper m2 of LED screen while maintaining the same visual effect. This allows theGroup to produce more cost-effective high quality LED screens. Benefits of LEDs LEDs offer the following benefits including: •Low maintenance: The long lifetime of LEDs reduces the need to replace failed lamps which can result in significant savings, particularly the cost of sending out maintenance crews. This also makes LED fixtures useful for installation in relatively inaccessible locations. On average, LED's have a life expectancy of 100,000 hours of usage, equivalent to approximately 11 years of continuous usage; and •Low power consumption: LEDs are high-efficiency light sources. White LEDs have efficacies of 25 lm/W, exceeding the performance of incandescent and some fluorescent sources. The directional nature of light produced by LEDs allows the design of luminaries with higher overall efficiency. The low power consumption of LEDs can generate significant energy savings, making them particularly suitable for high-volume uses, such as traffic signals. Semiconductor lamps also utilise LEDs as a lighting source and consume only 1/8th of the electricity required by an ordinary incandescent lamp. This low power usage also lengthens the lifetime of an LED. The advantages of LED technology mean that its uses have diversified fromindicator lights to display panels, illumination, backlighting, automobilelights and traffic lights. Market In the PRC, the LED industry has been identified by the government as a majorstrategic industry. In 2005 China's LED market witnessed a growth rate of 18.4%. The Directors believe that there are three major advantages in developing thePRC LED industry: • The PRC has both a large illumination industry and a large illumination user market, with further growth anticipated; • The PRC has a strong technological and industrial platform in this growing industry and has already established a complete industrial and production chain in LEDs and LED-related products; and • The LED industry can make use of the low cost production competitive advantages of the PRC. Global shipment values for LEDs reached US$5.73 billion last year and will riseto US$6.23 billion this year, according to the Industrial Economics andKnowledge Center (IEK). In the US, LED now accounts for 30 to 40% of all newelectronic signage. The United States Department of Energy forecasts that by 2010, the US will have55% of incandescent and florescent lamps replaced by semiconductor LED lamps,which will save an estimated annual cost of US$35 billion. Statistics from the China Optics and Optoelectronics Manufacturers Association(''COEMA'') shows that mainland China's LED output grew from 45 billion to 50billion units in 2004, about half of which were supplied by local LED makers.Last year, COEMA reported sales increases of 20%, driven by strong demand andthe rapid growth of LED applications. The Directors believe that demand in the PRC for landscape LED illumination willsubstantially increase in the run up to the 2008 Beijing Olympic Games and the2010 Shanghai World Expo. Reasons for Admission The Directors believe that the markets in which the Group operates will grow.The Directors believe that Admission will assist the Company and Group in itsdevelopment by: •raising its profile generally and within its sector; •enhancing the Company's ability to pay for acquisitions by enabling it to issue publicly traded securities; and •enabling the Company to attract and retain good quality high level staff by offering equity incentives through employee share options. Directors Peter Hong-Ming Chau, aged 54, Chief Executive Officer Peter Chau is an experienced entrepreneur and has been a marketing professionalfor over 20 years. He was previously the chairman of Publicis China, aChina-based advertising agency. His background in the PRC and experience workingin an international environment enables him to provide many new and innovativemarketing strategies to blue chip companies. Peter Chau is a fluentEnglish-speaker. Zhi-Hui Tian, aged 41, Chief Technical Officer Zhi-Hui Tian is an experienced designer and inventor of LED products and aleading developer in China of LED technology and its applications. Mr Tian heldthe patents on several LED product designs, including the semi-SMD LED displaymodule, the video wall and the LCD panel. These patents have been assigned tothe Group. Mr Tian has 13 years' experience in LED product design. Beforejoining the Group, Mr Tian was president of Shenzhen LEDTV TechnologyDevelopment Co. Ltd and chief technology officer of Shenzhen Tong Zhong JiElectronic Co. Ltd. Zhi-Hui Tian is a fluent English-speaker. Mervyn Russell Cragg, aged 45, Chief Financial Officer Mervyn Cragg is a Chartered Accountant and a Member of the Securities &Investment Institute in the UK and the Hong Kong Securities Institute. He workedfor Deloitte & Touche in Hong Kong for over 10 years before moving into thecommercial sector in 1997. Mr Cragg's previous position was as the Asia Pacificchief financial officer for the one of the largest advertising agencies in theworld. He has worked in Asia for almost 20 years and has extensive experience inthe PRC market. Ian Paul Martin, aged 46, Non-Executive Director Ian Martin is chairman of Avesco plc, an AIM-listed media company providingspecialist services to corporate, presentation and entertainment and broadcastmarkets. He joined the board of Avesco in 2002 as a non-executive director andwas the architect of the successful demerger of the business from INVESTINMEDIA.He is responsible for the functioning of the board as well as assisting in thedevelopment of the group's strategy. He is a non-executive director of ForestServices Group plc, Chelverton Asset Management Limited and Ascot UnderwritingLimited. Kevin Ka-Keung Miu, aged 39, Non-Executive Director Kevin Miu is an experienced corporate finance practitioner specialising in thePRC market and has over 13 years' experience in handling deals relating to PRCbusinesses. He is a director of corporate finance at Grand Vinco CapitalLimited, a corporate finance house in Hong Kong. He holds a bachelor degree inaccounting and a masters degree in business administration. Kevin Miu is afluent English-speaker. The Board has identified the need for a non-executive chairman and plans toappoint one as soon as practicable after Admission. -ends- This information is provided by RNS The company news service from the London Stock ExchangeRelated Shares:
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