D&O (7204) - May Exclusive - D&O - Lighting The Future


D&O Green Technologies Berhad (D&O 7204) had been a little known company to which deal with the manufacturing of LEDs and optos related products. D&O through it's subsidiary Dominant Opto Technologies Sdn Bhd which boost a range of LED products from Standard, Medium, High Powered LED and also Multicolor LED had a foothold in the US, Europe, China, Korean and Malaysian market.


With the current global environmental concern that focuses on environmental friendly products, where can this lead to for D&O in the coming days.

Let's have an interesting look at D&O recent price chart.

D&O had saw a good interest at the middle of 2014, where a substantial amount of shares had been transacted at the range of RM 0.34 to RM 0.40. The transaction had been viewed as a primary stage of accumulation basis, based on the solid white candle displayed with a good supported volume. However, the stock had took a long consolidation at the range of RM 0.28. With the consolidation almost look set to ripe up for harvest after 1 year, D&O should be going to see a better participation with greater volume while it travel to penetrate into the previous trading range of RM 0.34 to RM 0.40.


LED - Lighting Up The Future

30 years ago, data was transferred using a 8inch floppy disk, later became 5.25 inch, and subsequently  3.5 inch. Then the came the introduction of Compact Disc, which had subsequently see more development of the disc into DVD and Blurays. The mobile data storage took a revolutionize stance with the introduction of USB Drive and Memory sticks, and the latest is on the Cloud Storage. While this is the story of the changes of storage from the past to current, what about the lighting industry.

From the invention of the filament based electric light bulb (incandescent) by Thomas Edison, then to fluorescent, the next generation light will be the LED (Light Emitting Diode).

LED is in every angle better than incandescent and fluorescent light.


LED
Incandescent
Fluorescent
Life Span
50,000 hrs
1200 hrs
8000 hrs
Watts (based on 60
watt bulb)
6 to 8 watts
60 watts
13 to 15 watts
Kilo-Watts used per
year
329 KWr/yr
3285 KWh/yr
767 KWh/yr
Contain Toxic
(Mercury)
No
No
Yes
RoHS Complaint
Yes
Yes
No
Carbon Emission
451
pounds/yr
4500
pounds/yr
1051 pounds/yr
Sensitivity to low
temperature
No
Some
Yes (Not workable
under -10 degree
Fahrenheit or over
120 degree
Fahrenheit
Sensitivity to
humidity
No
Some
Yes
On/Off Cycling to
life span
No
Some
Yes
Durability
Durable (Can
handle bumps
and knock)
No (Glass or
Filament can
break)
No (Glass can
break easily)
Heat Emitted
3.4 btu’s / hr
85 btu’s / hr
30 btu’s / hr

On light output, comparing a 800 Lumens of light, incandescent light bulb will need 60 watt, fluorescent light will need 13 to 15 watts while LED only takes 6 to 8 watts to produce the same amount of light.

LED had a high flexibility of usage due to it's compact size, making it possible for a lot of applications.


Global Environmental Concern

It had been a global environmental issue on the current global warming due to the increase of carbon dioxide. With the growing population around the world, human are consuming more and more energy, in which largely of the energy is derived from fossil fuel that had been contributing to the alarming global warming issue.

According to analyst, by just replacing conventional lamps into LED in the United States alone will contribute to energy saving of more than 120 gigawatt annually. And that is reducing a stunning 164 billion pounds of carbon emission per year.

With the ongoing global concern on the global warming, the lighting industry will play a big part in reducing the total carbon footprints in the whole world. And with this in line, the LED industry will be the light of the future as more countries are adopting the usage of LED in most of the application in order to play a part in reducing the global warming.


Strong Upstream Development catering for future demands

With the highlighted demands in the LED sector, companies are rushing into tapping the upstream development opportunity such as LED Tester Machine to cater for the huge influx of demand. Amongst them are Pentamaster, Elsoft and MMSV.



The huge orders of the test machine in all these 3 companies had already put a forward signal of the incoming demand in the LED sector in the coming days.


D&O, after restructuring it's company which the disposal of loss making division had put into full focus in Dominant Opto Technologies Sdn Bhd, and shifted the focus to higher margin based products such as general lighting and automotive lighting. The group had also fully acquire their Europe based Dominant Semiconductors Europe GMBH which will be finalized in Q2 2015. D&O will be aiming to break above the RM 500m revenue mark in 2015.


In conclusion, D&O is a company that is full of potential, riding strong along with the booming LED industry. D&O will be an interesting company in the coming days based on
- Company operation restructuring exercise, disposing loss making entity, and fully focus on higher margin based products in the general and automotive lighting industry.
- Global warming issue will continue to push the usage of LED in most of the application from all kind of industry.
- LED versatility had enable it to fit in a lot of application, from car remote control to large billboard lighting.
- LED upstream development industry (LED Test Machine Manufacturer) had shown the signal of the upcoming demand in the LED sector
- D&O strong growing revenue despite the slower economy growth in the Europe before QE. The current QE will further boost the economy activities.
- Influx of more building spaces and ever increasing automobiles on the road will only signal for more demand for general lighting and automotive lighting.

With all the opportunities ahead for D&O, the company can a fast growing pacer in 2015 to 2017, which could potentially see revenue hitting more than RM 1 billion per year, which a long term outlook will see D&O possibly trading at RM 0.70 to RM 0.80 range.

Light Up with D&O ? You decide

Bone's short term TP : RM 0.40

Cheers and have a nice day

Regards,
Bone

http://bonescythe.blogspot.com/