LED lighting industry profits fell by 30% overall Accelerated shuffling

On March 13th, LED equipment testing company Yuanfang Optoelectronics (300306) announced the first quarter of 2013 performance correction announcement. The net profit of the previous forecast decreased by 5%-35% year-on-year and changed to a decrease of 30%-60%. Yuanfang Optoelectronics has also surrendered an annual report of “double reduction” in revenue and net profit. Its fiscal year 2012 achieved revenue of RMB182 million, a year-on-year decrease of 11.45%; net profit was RMB72.48 million, a year-on-year decrease of 25.07%.

In the LED lighting industry, the experience of the remote optical industry is not a single case. Concentrated in the recently disclosed LED listed companies' 2012 annual report or performance report, the overall profitability of the industry last year showed a decline of about 30%.

“The whole industry is still growing rapidly, but the market growth is not keeping up with the growth of investment, and it has to fight the price war.” Xie Yongjun, general manager of Jiuzhou Optoelectronics, said in an interview with reporters that last year, the LED lighting industry fell by about 20% in terms of product costs. However, terminal prices have fallen even more, reaching 40%-50%. "The shrinking of profits is inevitable."

The collective decline in the performance of the entire A-share and LED-related concept of the plate about 50 listed companies, including LED business revenue accounted for the bulk of the more than 20 companies. LED chips and wafer companies in the upstream of the industrial chain, such as Huacan Optoelectronics (300323), Silan Microelectronics (600460), Qianzhao Optoelectronics (300102), and BDO Runda (002005) 2012 net profit fell by 30.38% 88.07%, 39.33%, 57.14%.

LED crystal material supplier Fujing Technology (002222) net profit fell by 34.12%; LED power company Mao Shuo Power (002660) net profit fell by 9.76%; LED luminescent material company Keheng shares (300340) fell by 80.62%; LED Packaging company Long Fang Lighting (300301), Lehman Optoelectronics (300162), Hongli Optoelectronics (300219), and National Star Optoelectronics (002449) net profit fell by 27.45%, 27.36%, 34.49%, and 66.45%, respectively.

When explaining performance changes, these companies invariably attributed to the macroeconomic downturn in 2012 and increased competition in the LED industry. According to Yuan Optoelectronics, 2012 is the year when LED lighting in China has developed at the lowest rate in recent years. Rectangular lighting claims that in order to consolidate market share last year, the company adopted a proactive price reduction strategy.

Xie Yongjun said that since LED was used as a sample of the national energy conservation and environmental protection industry a few years ago, it has attracted a lot of capital to intervene, especially in 2009 to 2010, there has been a swarm of bees investing in the LED industry, resulting in the current market supply exceeding market growth. .

LED (Light Emitting Diode) is a solid-state semiconductor device. Since it can directly convert electricity into light, it is considered to be the fourth revolution in lighting after the human fire, incandescent lamp, and fluorescent lamp. LED light source has the advantages of long service life, low power consumption, etc. As early as in 2009, the Ministry of Science and Technology began to launch support policies such as “Ten City Ten Thousand Fighters”, striving to promote the development of domestic LED industry.

Under the aura of emerging industries, the LED industry has won the favor of all kinds of capital. There are three main sources of funding for the LED industry: First, traditional lighting companies. In the words of Wu Zhongshun, the general manager of Guangzhou Guangya Messe Frankfurt Co., Ltd., the biggest lighting exhibition in the world, “I don’t even think I’m embarrassed to say that I am a lighting company. Even OEMs have to put on. Several LED products.” The second category comes from the electronics industry. Since LEDs use semiconductors and other electronic components, many electronic companies have also extended their presence. In fact, Jiuzhou Optoelectronic Co., Ltd., where Xie Yongjun is located, is the parent company of Jiuzhou Electric, which ranks among China's top 100 electronic information companies. The third category is social capital.

Xie Yongjun said that in the case of supply exceeding demand, on the one hand, some LED companies shoddy, "a bulb of 20 yuan, the price is down, but the product quality and lighting effects are still not as good as traditional energy-saving lamps." On the other hand, the entire industry is caught in a price war. Last year, the price of LED lighting products dropped by about 40%-50%, of which 20% was due to the decline in the cost of LED lighting, and the rest should be attributed to Intense competition in the industry.

LED shuffling period "From the second half of last year, the LED lighting industry has entered a period of rapid reshuffle." Xie Yongjun said that in Shenzhen, where LED lighting companies gather, the saying circulating in the circle is that "one company closed in three days."

In the second half of last year, the larger companies that had been bankrupted were Shenzhen Vision and Ningbo Andy Optoelectronics. Xie Yongjun said that "too much has fallen", in addition to these companies with a certain scale, there are many small and medium enterprises and hand-workshop LED companies.

Hu Zhongshun also stated that as a barometer of the integration of the domestic lighting industry, although the total exhibition area of ​​Guangzhou Lighting Exhibition has increased every year, the number of exhibitors has been declining. The increase in the area is caused by large enterprises increasing the exhibition area. In 2012, Guangzhou Lighting Exhibition had an exhibition area of ​​220,000 square meters and was the largest lighting exhibition and LED exhibition in the world.

Xie Yongjun believes that in the first half of this year, the LED industry will continue to maintain the trend of rapid integration, on the one hand is the bankruptcy of small and medium-sized LED companies, "the value of mergers and acquisitions of small companies is not big"; the other is the integration of mergers and acquisitions between large LED companies, " This is the path taken by most of China's consumer electronics industries. A large number of investments, price wars, and industry integration are not as good as VCDs, home appliances, and mobile phones."

“In the Volkswagen LED lighting market, there are about 10 companies that can survive in the future,” said Xie Yongjun.

However, Qian Keyuan, deputy director of the semiconductor lighting laboratory at Shenzhen Graduate School of Tsinghua University, believes that the LED lighting industry is not so pessimistic, but simply because “the market is not yet fully up, but there are too many people”, in this case It is normal for some companies to withdraw or profit decline. "Compared with apparel and mobile phones industries, LED is still very good and the market is still on the rise." Qian Keyuan said.

Supporting policy speculation Qian Keyuan said that the decline in profitability of the LED lighting industry is also a warning sign for investment. “After the investment is warned, it will not be as crazy as the previous years.” He believes that from the perspective of the use of cost, LED lighting into the mass market is not far off, "some large companies have LED lighting products into the supermarket, if the channel, promotion is done well, the mass market is almost to start Inflection point."

Xie Yongjun believes that in February of this year, the National Development and Reform Commission, the Ministry of Science and Technology, the Ministry of Industry and other six ministries and commissions jointly issued the "semiconductor lighting industry energy-saving planning" for the LED lighting industry is a big positive, "it is expected that the policy effect will be reflected in about June this year." The "planning" proposes to promote the LED lighting industry to reach 450 billion yuan in output value by 2015, form 10-15 leading companies to master core technologies, and put forward a series of specific safeguards and encouragement policies. Hu Zhongshun also told reporters that in order to promote the transformation and upgrading of the lighting industry, the 2013 Guangzhou Lighting Fair, which will be held in May of this year, will launch an award called "Aladdin's Lamp of Fame". Hu Zhongshun believes that the current competition among domestic LED companies is concentrated on cost and price, and it needs to further increase the added value of the industry through technological innovations and award demonstrations.

“Manufacturers should not always keep their eyes on the government.” However, Qian Keyuan believes that the country’s support policies sometimes give the market a bad signal. “Funds of funds swarmed into the past few years, and to a great extent, the government at all levels. It is very important to continuously launch support policies."