Global LED chip demand increased by 54%, China can seize the opportunity?

Source: Author: LED-mannie UBS Securities 2015/8/14 benefit from the global phasing out incandescent lamps, LED lighting products and declining prices, the global LED lighting penetration is expected to reach 30% level in 2015. UBS research shows that lighting applications for global LED chip demand is expected from 17% in 2011, a substantial increase to 2015 of 54%. China as the world's LED lighting production base, the output accounted for 80% of the world's output, the most benefit. UBS issued electronic components industry research report pointed out that the global LED chip, the overall balance of supply and demand, overcapacity situation is further alleviated, has gradually become the main application of LED lighting industry, good Chinese LED industry chain, the future LED chip manufacturers to benefit the most, the most promising stocks, leading shares Sanan optoelectronics, the second value HC semitek and dry light. Global LED chip supply and demand balance the global LED market since 2011, there has been a serious oversupply. This is mainly due to Chinese government to promote energy conservation, local governments have launched to encourage LED chip enterprise policies, including the core LED chip production equipment MOCVD give 8 million yuan to 10 million yuan subsidy. Meanwhile, LED backlight TV demand growth, leading to Taiwan, South Korea LED manufacturers have expanded production, which led to a significant increase in global LED chip production capacity, exceeding the growth in demand. 2011 global LED chip production capacity of about 44 million 200 thousand square inches, while the demand for the same period was only 33 million 970 thousand square inches, the supply and demand ratio of up to 130%. But its recent research indicates that the main LED chip manufacturers because of the global production capacity is limited, and the continued growth in demand, in 2014 the global LED chip supply and demand ratio from 130% in 2011, fell to 104% in the overall balance, to the LED industry chain enterprises to bring good. LED industry chain is generally divided into upstream LED chip manufacturing, midstream LED chip packaging and downstream LED chip applications three sub sectors. One of the top industrial chain LED chip manufacturing industry access threshold is higher: the need for large-scale capital investment, but also the need for long-term technology accumulation. This also makes the Chinese LED chip manufacturing companies since 2011, large-scale reduction, UBS is expected to be able to mass production of LED chip companies about 10. From the point of view of growth rate, 2010-2014, LED chip industry annual output growth rate of 32%, leading LED packaging and application industry. UBS believes that with the rapid development of China LED industry, LED chip is the most benefit for enterprises in the industrial chain, which is mainly due to a country to build the largest patent problem, China LED chip manufacturing enterprise has been through its own research and development and industry mergers and acquisitions, gradually breaking the LED chip patent bottlenecks, continuously improve product technology, material cost fall, and leading enterprise gross margin and the highest level of ROE. Among them, the most promising UBS LED chip leading enterprises Sanan optoelectronics, HC semitek and changelight will also benefit. Valuation, LED industry chain related enterprises market consensus valuation showed that the market is expected to LED chip manufacturing enterprises 2015/16 PE valuation levels were approximately 40 times and 28 times, 35 times higher than that of LED chip packaging enterprises and 25 times, 54 times lower than the LED chip application enterprise and 39 times. A shares LED chip manufacturers valuation.