Neo-Neon lights up with $30M from Tsing Capital

Hong Kong-based high-tech LED manufacturer Neo-Neon Holdings (HKG:1868) received US$30 million from Beijing’s Tsing Capital. The investment, announced yesterday under Tsing Capital’s China Environment Fund III, represents 11.3 percent of Neo-Neon’s issued share capital, making the fund now the single largest institutional shareholder in Neo-Neon.

According to Tsing Capital, the subscription of 96.7 million new shares at HK$2.40 (US$0.31) per share happened at a premium of 4.34 percent in comparison to the previous day’s close of HK$2.30 per share. The gross proceeds, HK$232 million (US$30 million), are expected to be used to strengthen Neo-Neon’s capital base and financial position for future business development.

For the week, the company’s stock has been trading up 37.21 percent, but closed down 6.09 percent today at HK$2.93. Neo-Neon’s 52-week range is HK$0.85 to HK$3.49. The company has a HK$2.23 billion market cap.

“The new capital will not only facilitate Neo-Neon in capturing the ever-growing LED market, but we can also leverage Tsing Capital’s expertise to position ourselves as leaders in the cleantech sector,” said Ben Fan, Neo-Neon’s founder and chairman.

Founded in 2001, Tsing is considered a pioneer in cleantech investment in China. Its series of three funds, focused on cleantech and environmental-related investment, total more than $300 million.

Neo-Neon, which holds more than 350 patents, is a vertically integrated producer of more than 10,000 LED illumination products. Its products are sold in more than 80 countries. Its manufacturing base is in China’s Heshan, Guangdong Province, where the company incorporates chip fabrication, packaging, application and distribution into its manufacturing process. Retails customers include household names such as Home Depot and Target.

By 2010, China's LED industry is expected to deliver US$2.32 billion in annual sales, compared to US$1.18 billion for 2008, according to research conducted by DigiTimes, an IT consumer magazine based in Taiwan. The research data suggests China’s LED public lighting market will grow three to five times over the next four years (see China's LED market shows promise).

In 2008, Taiwan had the world's second largest LED industry with a 20 percent share of the global market, according to LEDinside, an analyst firm based in Taipei. Japan had the world's largest LED industry with a 37 percent share of the world market (see Taiwan's LED market heats up).

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