High-tech LED·Weekly | Industry comprehensive recovery? It is too early! Step into the most critical adjustment period

This week, the secondary market LED reports that have not been seen for a long time are released. With the correction of the price of LED products in the middle and upper reaches of the first half of the year, the performance of LED listed companies generally continue to improve and the pace of overseas acquisitions by Chinese LED companies, the attention of the capital market to the LED industry is heating up.

Optimistic view: The price of the core link of the LED industry chain has risen, and the relationship between supply and demand has changed. In particular, the “ban”, the rapid increase in penetration rate in overseas markets, and the continued rise in the small-pitch market, are expected to increase due to a series of downstream demand bullish.

Especially after the deep reshuffle of the industry in 2015, the overall supply pattern has been fully adjusted, and the industry's entry barriers will increase, and new supply will be greatly reduced. At the same time, the scale company's economies of scale have expanded and bargaining power has increased significantly.

Cautious point of view: The current state of the industry is only a short-term breathing time window for small and medium-sized LED companies. At the same time, it can be seen that the capacity expansion and release of some large factories are accelerating. Once the market demand fluctuates, the balance between supply and demand will be broken.

In addition, the diversified business layout of some large factories is still at an early stage, and it is difficult to determine the future profit growth space for the time being. However, some SMEs' transformational segmentation market has only tasted the sweetness, but it is still subject to future price declines, demand fluctuations and scale effect risks.

In terms of market financing, as the state's policy to speed up the improvement of the new three-board system is heating up, the heat of LED companies to apply for the listing of the new three boards by the end of the year will continue, but it will also bring challenges to enterprises. If you make your financial statements beautiful, you will naturally face problems such as accounts receivable and inventory increase.

Although the amount of financing for LED-listed New Third Board companies has increased significantly in the first half of this year, the scale is still small. In terms of profitability, the annual net profit of less than 10 million yuan still accounts for the majority. The warming of the market has begun to make some companies "fever."

On the other hand, the trend of enterprises above the scale, speeding up mergers and acquisitions to make large-scale effects, continue to expand production to increase market concentration, adjust product mix and improve profitability have become very obvious.

Look at this week's industry events.

It is planned to invest another 400 million yuan to expand the packaging

Guoxing Optoelectronics (002449) announced this week that based on its own development strategy plan, combined with the judgment of the LED market and the demand situation of existing customers, it is planned to invest no more than RMB 400 million to expand the company's packaging projects.

The construction period of this expansion project is from December 2016 to June 2017. This investment expansion can flexibly meet the needs of the company's product orders and alleviate the shortage of original capacity.

According to the announcement, through the gradual release of production capacity, the company will continue to play its traditional advantages, continuously improve the automation and information production management level, improve product quality, and further strengthen market development and cooperation, and enhance the core competitiveness of the company's main business. Overall profitability, ensuring continued growth in profit.

This is the third expansion of Guoxing Optoelectronics since November last year.

Sanan Optoelectronics confirmed contact with Osram

In response to the report on the acquisition of German lighting giant Osram, Sanan Optoelectronics issued a clarification announcement on the evening of October 10, saying that after self-examination, the company is currently in preliminary contact with OSRAM related parties on a potential acquisition transaction or cooperation. The two sides only met once.

The full acquisition of Osram, which may become a major milestone in the LED industry in China and the world, seems to be a bit "not cold or hot" with the clarification announcement of Sanan Optoelectronics (in some respects, it is confirmed) ".

The capital market did not give a positive response. As of the close of the 11th, Sanan Optoelectronics shares closed at 12.47 yuan per share, only rose 3.83%. The turnover rate on the day is also lower than the average turnover rate of the green lighting sector. It seems that investors are still on the sidelines.

The report said that Osram's share price rose 2.8% at the beginning of the trading session yesterday, but the stock price turned down after Sanan Optoelectronics said that it had only one face-to-face meeting with Osram on a possible acquisition or cooperation agreement. Osram shares fell 1.58% on the day.

Sanan Optoelectronics intends to acquire Osram from its flaws in overseas markets and LED core patents.

EU imposes ban on halogen bulbs

According to EU law, “directional light” refers to a luminaire with at least 80% light output in the solid angle range of “π sr” (equivalent to a cone with a apex angle of 120°). From September 1, 2016, directional lights placed on the EU market must comply with the energy conservation regulations in Table 2 (also referred to as “Phase III”) of Annex III of Regulation 1194/2012.

At present, floodlight-type light source lamps (such as LED bulbs) are used in relatively large applications, and sales in overseas markets are relatively large. LED directional lamps are mainly used in specific fields, so the market share is relatively low. .

Li Quan, manager of Sanxiong Aurora Brand Management Center, said that before our LED spotlights and LED downlights were not done in overseas markets, we are now strengthening the layout of products in this field, including channel construction, lighting design, brand promotion, etc. Strive to gain more market share.

In recent years, the LED penetration rate of commercial lighting has also increased rapidly. The color of the LED lamp is relatively easy to control, the color temperature is adjustable, the light effect and the index are gradually improved, and it is more and more accepted by commercial users.

"Indian model" should be fully promoted

Recently, the International Energy Agency (IEA) announced that it intends to try to replicate the implementation of the Indian LED bulb policy in Indonesia to reduce the cost of efficient lighting technology. India has launched a nationwide LED upgrade program through state-supported utility company Energy Services (EESL).

“The EESL LED program has been successful and the IEA is working with it to bring the program to the world.” IEA Deputy Director Paul Simons said at the World Summit on Sustainable Development, “We want to try this model in Indonesia, We think this is a best practice case that must be shared.

EESL India has been buying LED bulbs in bulk to reduce prices and distribute bulbs in accordance with the government's UJALA program, which has led to a steady decline in LED bulb prices over the past few years.

Recently, Philips Lighting in the Indian government's public LED bulb lamp bidding project, offering "price killing" to participate in the bidding for a 9W LED bulb with a price of only 0.57 US dollars (about 3.8 yuan). This price is 30.8% lower than the price of the bidding product in March this year.

The Indian government's LED lighting replacement program has been the focus of LED lighting companies in emerging markets since last year. The Indian government plans to implement an LED lighting replacement program in 100 cities by March 2019. According to the plan, 200 million bulb lamp bidding projects will be launched this year. (poke for details)

A wave of LED listed companies reported in the third quarter

This week, Lehman, Keheng, Foshan Lighting, Weiwei, Ganzhao Optoelectronics, Huacan Optoelectronics, Jufei Optoelectronics, Ruifeng Optoelectronics, Zhouming Technology, Lianjian Optoelectronics, Changfang Group and other LED companies The three quarterly report announcements were released.

From the current data performance, most companies' net profit in the first three quarters showed an increasing trend, and only a few companies saw a decline in net profit. Among them, Ganzhao Optoelectronics and Changfang Group showed signs of decline in their net profit in the first three quarters.

The Group expects net profit attributable to shareholders of listed companies from January to September 2016 to be between RMB 52 million and RMB 60 million, down 17.65% to 4.98% year-on-year. The company's net profit for the quarter decreased by 37.24% to 2.45% from the previous quarter.

The company said that during the reporting period, due to macroeconomic impact and increased market competition, product prices fell and gross profit margins declined.

Ganzhao Optoelectronics estimates that the net profit for the first three quarters was 201.8075 million -25,579,900 yuan, down 25% - 5% over the same period of the previous year, and the profit for the same period last year was 2,691,700 yuan.

On the one hand, due to changes in the structure of blue-green and red-yellow products, the overall gross profit margin of the company's business has decreased compared with the same period of the previous year; on the other hand, the increase in operating income, the increase in accounts receivable, and the significant increase in the asset value of the accrued assets, As a result, the net profit decreased year-on-year. (poke for details)

CREE confirms small-scale layoffs

In a company statement on Wednesday, CREE confirmed that its LED lighting company will lay off employees, including its factory in Racine, Wisconsin and its North Carolina headquarters. However, the company spokesperson did not give specific number of layoffs, but the disclosure was only a small-scale layoff.

CREE's stock has not been satisfactory to investors in the past year. The data shows that CREE's return over the past year has increased to -1.62%, while the S&P 500's return has increased by 7.32%.

The data shows that the negative rate of return growth is mainly due to CREE's consumer lighting business revenue did not meet expectations, and the growth of power and RF business slowed down. In order to return the LED lighting business to the growth channel, CREE has launched a series of new consumer lighting products.

For CREE, there are also challenges from the rapid changes in the Chinese market.

"Reluctantly" cut off 7 million bulbs per month

Recently, Wu Qinghui, chairman of Dongbei Optoelectronics, the largest LED bulb manufacturer in Taiwan, revealed that it will adjust the production capacity ratio of existing products, reduce the production capacity of conventional LED bulbs, and switch to LED lighting products with more profit protection. The move is also to be able to differentiate from the “low-cost” market for bulb manufacturers in mainland China.

According to the plan, Dongbei Optoelectronics will reduce the current monthly production capacity of 10 million LED bulbs to 3 million. Wu Qinghui revealed that this will directly lead to the bulb business that currently accounts for 60% of the company's lighting business revenue, which will drop to around 20% in 2017. At the same time, based on the adjustment of the product mix, the revenue from linear LED (straight tube) lamps and outdoor lighting fixtures is expected to increase from the current 40% to 80%.

Wu Qinghui said that such product mix adjustment is expected to increase the gross profit margin of LED lighting source business by 10 percentage points in 2017, and will contribute 5 percentage points to the growth of the company's business gross margin.

In the first half of last year, Philips was able to significantly reduce the price of LED bulbs in the North American market in advance. Dongbei Optoelectronics, a new cost-competitive new architecture product, was forced to mention the morning market in response to the rapid changes in the market.

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