2007 The Doubler Thread for the Year Ahead

My three for 2007 are
LED INTERNATIONAL (15/16.5)
Reneuron (RENE) (37/38)
Gold Oil (GOO) (7.75 / 8.25)


LED INTERNATIONAL (LED) Current Price (22nd Dec 06) 15/16.5p


The Company and its subsidiaries ("the Group") specialise in the development,

manufacture, and sale of LED screens and other LED products such as signs,

lamps, lighting and building illumination. The Company is seeking Admission in

order to enhance the Group's profile internationally, to gain access to the

capital markets and to facilitate future corporate acquisitions.




The Group is positioning itself to be an international supplier of LED screens

and other LED products.The Group has been involved in the manufacture of LED screens

and products since February 2004

.During 2006, the Group has expanded by developing its distribution network

overseas and has sought to add value through increased investment in research

and development. The Directors believe that this expansion will help to support

the Group's existing customers, broaden its range of LED products and facilitate

expansion into new product and geographical markets.

The Group's core focus has been on the provision of LED screens. The screens are

manufactured in a 'building block' format to a specific design, which allows

screens to be assembled to suit a customer's size and definition specifications.

This design also ensures that the screens are relatively easy to transport and

assemble.To date, the Group's primary market has been the People's Republic of China

("PRC"), but it has also supplied end products to Macau, Japan and the USA. Part

of the Group's strategy is to widen its customer base to markets outside PRC.

To this end, the Group has established an international sales team, which is

expected to help generate non-PRC sales revenue.


Key Strengths

The Directors believe the Group has the following key strengths:

*The Group's production facilities are in the PRC allowing it to take

advantage of the PRC's low manufacturing cost base;

*the Group has expanded its distribution network by assembling an

international sales team;


*the technology underpinning the Group's 12 design patents covers various

fields of LED application and design, and enables the Group to produce

cost-effective high quality LED screens;


*the Group has been profitable since 2005 and has experienced a

significant increase in turnover in the year to 30 June 2006;


*the Group has demonstrated high gross profit margins (32.5%in the year to

30 June 2006); and the Group's management has substantial industry-specific experience.




Products



At present, the Group generates income from the sale of three basic product

groups:

LED screens and displays:

*The Group designs and manufactures screens or signboards, each produced

to meet individual customer specifications.

*In the year ended 30 June 2006, LED screens and displays accounted for

65% of total sales (2005: 81%).

*The Group also rents out large LED screens under a long-term contract.

LED lamps and lighting:

*The Group provides LED lighting products for both indoor and outdoor

environments, including lit guardrails and plug-in lights.

*In the year ended 30 June 2006 this product line accounted for 24% of

total sales (2005: 8%).


OEM:

*The Group assembles electronic components (principally onto circuit

boards).

*The Group operates this business stream to utilise spare capacity, which

provides a positive contribution towards fixed overheads.

*Because of its small scale and the relatively high indirect costs

associated with OEM activity, the Directors do not consider this to be a

core activity of the Group.

*In the year ended 30 June 2006 this product line accounted for 11% of

total sales (2005: 11%).



The increase in gross margins is the result of manufacturing efficiencies being

achieved as the Group has gained operational and technological experience and

economies of scale from increasing sales and purchasing volumes.


The Group has acquired 12 design patents and one trademark, LEDTV. The

technology underpinning these design patents enables the Group to utilise LED

technology in a more efficient manner by reducing the number of LEDs required

per m2 of LED screen while maintaining the same visual effect. This allows the

Group to produce more cost-effective high quality LED screens.


Benefits of LEDs

LEDs offer the following benefits including:



*Low maintenance: The long lifetime of LEDs reduces the need to replace

failed lamps which can result in significant savings, particularly the cost

of sending out maintenance crews. This also makes LED fixtures useful for

installation in relatively inaccessible locations. On average, LED's have a

life expectancy of 100,000 hours of usage, equivalent to approximately 11

years of continuous usage; and





*Low power consumption: LEDs are high-efficiency light sources. White LEDs

have efficacies of 25 lm/W, exceeding the performance of incandescent and

some fluorescent sources. The directional nature of light produced by LEDs

allows the design of luminaries with higher overall efficiency. The low

power consumption of LEDs can generate significant energy savings, making

them particularly suitable for high-volume uses, such as traffic signals.

Semiconductor lamps also utilise LEDs as a lighting source and consume only

1/8th of the electricity required by an ordinary incandescent lamp. This low

power usage also lengthens the lifetime of an LED.


The advantages of LED technology mean that its uses have diversified from

indicator lights to display panels, illumination, backlighting, automobile

lights and traffic lights.



Market

In the PRC, the LED industry has been identified by the government as a major

strategic industry. In 2005 China's LED market witnessed a growth rate of 18.4%.



The Directors believe that there are three major advantages in developing the

PRC LED industry:


* The PRC has both a large illumination industry and a large illumination

user market, with further growth anticipated;



* The PRC has a strong technological and industrial platform in this

growing industry and has already established a complete industrial and

production chain in LEDs and LED-related products; and



* The LED industry can make use of the low cost production competitive

advantages of the PRC.

Global shipment values for LEDs reached US$5.73 billion last year and will rise

to US$6.23 billion this year, according to the Industrial Economics and

Knowledge Center (IEK). In the US, LED now accounts for 30 to 40% of all new

electronic signage.

The United States Department of Energy forecasts that by 2010, the US will have

55% of incandescent and florescent lamps replaced by semiconductor LED lamps,

which will save an estimated annual cost of US$35 billion.

Statistics from the China Optics and Optoelectronics Manufacturers Association

(''COEMA'') shows that mainland China's LED output grew from 45 billion to 50

billion units in 2004, about half of which were supplied by local LED makers.

Last year, COEMA reported sales increases of 20%, driven by strong demand and

the rapid growth of LED applications.

The Directors believe that demand in the PRC for landscape LED illumination will substantially increase in the run up to the 2008 Beijing Olympic Games and the 2010 Shanghai World Expo.