The next few years will usher in a period of explosive growth in the global LED industry. As awareness of energy saving and environmental protection continues to increase, and semiconductor lighting technology gradually becomes more mature, LED lighting is replacing traditional incandescent lamps and fluorescent lamps more rapidly than before, yet there are only a few manufacturers in the world that can produce LED chips, and LED has ushered in a period of explosive growth. San'an Electronics, which holds 10% of the company's shares, is a highly competitive LED chip manufacturer. San'an Electronics can produce full-color ultra-bright LED epitaxial films and chips, which are widely used in high-end semiconductor lighting fields such as night lights, automotive lights, and backlights. The company has a strong R&D technical team with a yield of more than 98%. The current production capacity is 450,000 epitaxial films and 15 billion chips, and the domestic market share has reached more than 58%. Revenue is expected to reach 400 million yuan in 2008, and net profit is expected to reach 100 million yuan, which can contribute 0.04 yuan in EPS to the company. Cinda Optoelectronics will rely on Sanan Electronics to fully share the rapid growth of the semiconductor lighting industry. Cinda Optoelectronics is mainly engaged in LED packaging business, with investment of 70% and 30% by Xiamen Cinda and San'an Electronics respectively. San'an Electronics said it will fully support Cinda Optoelectronics in terms of chip supply and technology. Cinda Optoelectronics has now fully mastered in-line and chip LED packaging technology, and the large-scale production decline rate has been controlled to less than 1%. The company has raised capital projects with a monthly production capacity of 100 million units, and is expected to reach annual revenue of 320 million yuan after production. The profit exceeds 50 million yuan, and will contribute 0.14 yuan of EPS to the company. Benefiting from the rapid growth in the performance of Xiamen Cinda and San'an Electronics, the company's compound growth rate is expected to reach 50% in the next three years. Preliminary estimates suggest that the company's EPS in 2008 and 2009 can reach 0.30,0.45 yuan. Given the company's rapid growth, the company was given 50 times PE in 2008, corresponding to the target price of 15 yuan and a long-term “recommendation” rating.