After the stock is expected to release the pressure to restore the LED industry upside probability

December, the price decline narrowed for the first time. In early 2011, a large number of display packaging into the lighting market, the surge in demand for supply and steady growth led to the collapse of white light device prices. According to CITIC Securities estimates, in the past six months, prices fell by about 20% to 30%/ quarter, much higher than the normal speed of the balance of supply and demand in the 4% quarter of 8%/. Research shows that in late November 2011 so far, the main component of LED lighting (white 3528) price decline from the 22%/ quarter narrowed to 12%/ quarter, the first half of the first half of the price of white light device.

It is reported that the inflection point refers to the price decline, (after packaging) the price of the device directly reflects the supply and demand. Packaging is the most close link between the industrial chain and the terminal, and the important condition of the direct response to the supply and demand situation is: the price of white light applied to the lighting. In the balance of supply and demand situation, through the packaging manufacturers to expand the scale and enhance the level of technology to reduce cost, to ensure the gross margin case can make the product price to 15% 30%/ years of decline, the price drop package under the balance of supply and demand for an average of 4% quarter to 8%/. The market supply and demand fluctuations directly affect device prices, CITIC Securities in mid and steady supply under the assumption that the important sign of rising demand is narrowed device prices if the decline narrowed to the normal range means that the balance of supply and demand, at the bottom of the stage.

After the stock is expected to release the pressure, the industry to restore the upside probability. According to the judgment, the price decline narrowed in December to support the lighting requirements, LED continued to reduce the cost and technical progress trend has not changed, so that CITIC Securities to reduce inventory pressure on profit of the industry is to be temporarily affected, after pressure release device price decline narrowed again, industry recovery upward probability, a quarter for the industry stage at the bottom is a high probability event.

With the penetration of all sectors of the industry chain research and commercial lighting market to determine prices, the device appeared in December is expected to turn for the better, the terminal lighting manufacturers due to increased inventory, LED lighting demand support.