Hongqi stock hits 5-year high on Mini LED and automotive focus

Taiwanese LED manufacturer Hongqi (6168) is strategically pivoting towards emerging technologies, including Mini LED, CSP, and VCSEL, while expanding its LED packaging expertise into the integrated circuit (IC) domain. This diversification aims to unlock new avenues for business growth.

The company's stock saw a significant surge, reaching a near five-year high of 34.2 NT dollars by late morning on Tuesday, defying a broader market downturn. This rally, accompanied by a substantial increase in trading volume, reflects investor confidence in Hongqi's forward-looking strategy.

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Traditional lighting and backlight markets have become highly competitive. In the future, the industry's focus will shift towards the automotive market and high-end sensing components.

Hongqi acknowledges that the traditional lighting and backlight markets have become highly competitive. Consequently, the company is redirecting its focus towards the automotive sector and advanced sensing components. With the increasing adoption of electric vehicles and the growing demand for in-car LED applications, the automotive LED market presents a promising long-term growth trajectory. Hongqi is actively collaborating with clients to develop new products for high-margin niches such as automotive, wearables, and smart home appliances.

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With the continuous popularization of new energy vehicles and the increasing application of automotive LEDs, the automotive LED market still has long-term growth potential.

Despite global economic uncertainties, Hongqi anticipates a modest growth in the overall LED market this year, driven by expanding applications and advancements in packaging technology. To bolster its performance, the company is committed to upgrading its product mix, with a particular emphasis on Mini LED and RGB+IC products. This strategic enhancement of high-value-added offerings is expected to improve gross margins.

In terms of production, Hongqi is prioritizing process improvements, cost reduction, and enhanced equipment efficiency and yield rates. The company also seeks stable partnerships to expand its outsourced manufacturing capabilities, positioning itself as a key strategic player within the industry supply chain. By optimizing its product portfolio and increasing factory utilization, Hongqi aims to further enhance its overall operational efficiency.

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We will continue to upgrade our product structure and strengthen our layout in Mini LED and RGB+IC products, aiming to improve gross margins by increasing the proportion of high value-added products.