On August 4, the IPO proposal filed by Colorlight Cloud Tech Ltd (hereinafter “Colorlight”) for ChiNext (an enterprise growth market of the Shenzhen Stock Exchange) was approved. With China International Capital Corp (CICC; 601995) being its IPO sponsor, the LED equipment manufacturer plans to raise up to RMB831 million (US$128 million).

Reportedly, Colorlight will issue no more than 170 million shares, which accounts for at least 25% of the total share capital after IPO.

Image source: PAIXIN.COM

With Continuous Sales Growth, Colorlight Is Increasingly Competitive

Colorlight is a high-tech company providing combined solutions of video image processing for clients, with video processing algorithms being its core business and hardware equipment being its physical products . The company mainly offers LED display control systems, video processing equipment, and cloud players, all of which allow display control, editing and processing, and transmission and analysis of video signals and image data.

LED display control systems are core components of LED monitors. Since its foundation, Colorlight has gained R&D experience in developing LED display control systems as well as word-of-mouth reputation. The company then expanded its business to video processing and playing by launching a series of video processing instruments featuring integrated control functions including optical calibration, color management, image splicing, matrix switching, multiple image processing, cross-platform control, and HDR rendering; the resultant image has high bits, HDR effect, a high frame rate, wide gamut, and low latency.

As cloud computing and communications technologies are advancing, Colorlight, following the trend of mobile display markets, developed cloud player series targeting demand for wireless remote management. By connecting servers to WiFi, 4G, and 5G, each of the cloud players facilitates cloud connection and inter-regional management between multiple screens.

Colorlight has relentlessly conducted in-depth research and developed various technologies such as rapid mass-pixel optical calibration, large-screen pitch fine-tuning, multichannel ultra-8K processing with low latency, virtual production and extended reality (XR), image bit extension, nonlinear gamut calibration, and mobile display grid management for broadcast control . With the said R&D results, Colorlight has become one of the few Chinese enterprises possessing core technologies related to LED display control and video processing.

Colorlight’ products have been widely applied to various occasions requiring video and image display (e.g., festivals, competitions, conferences, exhibitions, monitoring and control, TV broadcasting, stage performance, commercial advertising, information announcement, creative display, smart city programs, and virtual production). Major LED display clients include Qiangli Jucai, Leyard, Unilumin, Cidar, and Planar.

In 2018, 2019, 2020, and January–March 2021, Colorlight generated operating revenue of RMB227.9837 million, RMB329.6943 million, RMB394.8834 million, and RMB86.912 million, respectively. In the said periods, the company posted net profits (attributable to the parent company after deduction of non-recurring profit or loss) of RMB23.3181 million, RMB60.999 million, RMB62.7555 million, and RMB12.4311 million . Overall, sales has grown, demonstrating that the company’s market competitiveness is rising stably.

Colorlight Plans to Raise Up to RMB831.0665 Million So as to Strengthen Core Competencies

By launching an IPO, Colorlight aims to raise RMB831.0665 million (approx. US$128 million), which will be spent on projects including an expansion project of LED display control systems and video processing equipment.

Specifically, the project involving expansion of LED display control systems and video processing equipment aims to scale up Colorlight’s production capacity of each flagship product. Investing in the project enables the company not only to fulfil new needs derived from rapid development of products, technologies, and markets but to explore new business to gain profits. Moreover, the company can strengthen innovativeness, optimize product portfolios, diversify development risk, and improve overall competitiveness.

The marketing services and product exhibition center project involves the construction of 13 such centers worldwide. The centers will total an area of 8600m2 across essential markets in China, Belgium, the US, Japan, the UAE, India, Russia, and the UK.

The R&D center project will help the firm to attain its goal of envisioning the “future of visual experiences”, whereby its products can satisfy emerging market needs.

Colorlight indicated that the said projects are closely related to its business. After these projects are implemented, the company can upgrade product portfolios with increased production capacity, improve R&D competency, expand marketing management, and consolidate its leading position in the industry. Therefore, its goals of ensuring continuous and rapid development and increasing enterprise value can be achieved.

Colorlight’s overall development plan and goal is to enhance the “future of visual experiences”. Based on its existing technologies and market share, the LED equipment provider will transform itself from an R&D-centered firm to an innovation-driven firm that offers integration services. By doing so, the company can boost its brand influence, enhance marketing effectiveness in China and abroad, and achieve both export and domestic sales success. The next step is to incorporate research results with sales and marketing strategies, develop innovative approaches to corporate governance and operations, and ultimately become a leading enterprise in industry. (Compiled by Lynn from LEDinside)