LED lighting ODM Tons Lightology has announced plans to acquire fellow LED lighting solution provider StrongLED Lighting System through a share swap.
The share swap will take effect on October 31, 2023. Tons Lightology expects the merger will bring a substantial synergy starting in 2025.
Although StrongLED Lighting experienced losses over the past two years due to its investments in new businesses and related pandemic control measures in China, the company is expected to swing back to profitability this year in line with a possible economic recovery in China.
For the first quarter of 2023, Tons Lightology posted a net profit of NT$920,000 or NT$0.02 per share on revenue of NT$162 million, representing a 35.77% decline from a year earlier. The gross margin for the quarter stood at 31.51%.
Despite an over 35% revenue decline in the first quarter, the company expects its 2023 total sales to be on par with 2022's levels, with gross margin maintaining around 30% over the long term.
The company expects its inventory turnover ratio to improve between the second and third quarters. Its inventory turnover stood at 160 days at the end of the first quarter compared to 136 days earlier.
For April, it posted revenue of NT$67.386 million, decreasing 22.25% from a year earlier.
Article translated by Steve Shen
