(Yicai Global) Aug. 26 -- Visionox Technology, a major Chinese developer of organic light-emitting diodes, has posted a nearly 50 percent drop in net profit in the first half due to shrinking profit margins and has warned that if it were not for the sale of assets, it would be running at a loss.

Net profit was down 47.3 percent in the first six months from the same period last year to CNY92.5 million (USD13.4 million), the firm said in its earnings report released yesterday. Profit was shored up by the sale of some assets, without which the Nanjing-based company would actually have racked up losses of CNY530 million, it added.

This is despite revenue rising 4.44 percent year on year to CNY1.2 billion (USD173.8 million). OLED display screen sales accounted for CNY1.1 billion of this and were up 6.75 percent, but the firm's profit margin shrank by 9.29 percentage points to 24.1 percent, the report said.

The price of rigid OLED displays dropped 27 percent in June from the same period last year and were 15 percent lower than in January, Zhou Hua, chief display industry analyst at CINNO Research, told Yicai Global. Meanwhile, the price of flexible OLED displays was down 11 percent year on year and 7 percent from January, he added. This cut heavily into the firm's profit margins.

In the first half, Visionox ranked fourth worldwide in both active matrix OLED smartphone display and flexible AMOLED smartphone display shipments after Korea's Samsung, LG Display and Beijing-based BOE Technology Group with 3.3 percent and 2.5 percent market share respectively, according to market research firm Sigmaintell Consulting.

Visionox makes advanced AMOLED displays mainly used in smart phones, smart wearables and on-board display devices that are lighter, thinner, more energy efficient and have a larger viewing angle than conventional liquid crystal displays.

The company's stock price [SHE:002387] was trading down 1.87 percent this afternoon at CNY15.23 (USD2.20).

Editor: Kim Taylor