LED industry is showing signs of warming up in advance

After the large area of the whole industry losses, China's LED industry has finally welcomed the signs of warming. "At present, a certain quality of unpackaged chips has been raised about 10%." In September 6th, Cheng Hongwei, the Financial Research Institute of superior goods and wealth, said that the price of the downstream applications was about 5%. According to Zou Mingxiao, a researcher of CIC consultant, the price increase of the LED packaging plant is only related to the packaging of the display screen. Although it is not related to the lighting package, the lower reaches of the LED industry chain are also brewing the price rise. After a two or two year low price market, the trend of the LED price rebound has been obvious. Compared with the previous downturn in market prices, LED prices are up nearly 10%. However, the current price rise is not a total price rise. "After the downturn in the industry in 2015, this price rise is the beginning of a reasonable return of the price of the industry's products, but it is still necessary to observe whether the industry will be fully warm afterwards." In this regard, another anonymous industry person believes that the current industry order has been re established, and in the future market, the demand side of LED products still has a huge space for development, after this adjustment, the industry will return to rationality. The starting point of the price raising of LED companies has experienced a long downturn. Since 2010, China's LED industry has entered a period of rapid development. "The threshold of market access at that time was very low." A LED enterprise manager recalls that the input of hundreds of thousands of yuan can be entered into the industry, and the LED industry in China began to start at that time. The good prospects for development attract a lot of capital to pour into the industry, and the scale of the industry is growing rapidly. At that time, the size of the domestic enterprises was not too large. A new entry industry may be able to catch up with the domestic enterprises in the first half of the year under the power of capital. But in the early stage of industry development, the product quality is low, the homogenization is serious and the product technology content is not high, and the competition between enterprises is often the most common low price competition. In this situation, the domestic LED product price begins to fall sharply. "In 2013, the price drop of the LED industry was about 30%, and in 2012, it continued to decline by about 20%, while in 2015, it continued to decline by about 5%." Cheng Hongwei remembers, in the last three years, the decline in the LED industry has been narrowing, but the price of 2015 basically reached the cost line of all enterprises, many enterprises run under the cost line for a long time, including many large LED manufacturers to sell low price. In this situation, the LED industry has stepped into the bottom of the industry. From the data performance of listed companies, in 2015, the largest LED enterprise in China has achieved 4 billion 858 million yuan in sales revenue, 1 billion 505 million yuan in operating profit and 1 billion 695 million yuan in net profit attributable to the shareholders of listed companies, and a slowdown in growth. The number of LED chip products in the second place China can optoelectronic company increased by 65.52% compared with the same period last year, up 71.63% from the same period. And the company achieved net profit of -9596.39 million yuan, a 205.56% decline, its gross interest rate is only 16.75%. "Under this unreasonable low price competition, the product value and enterprise value of the LED industry are undervalued as a whole." According to the industry, the return of the price is a reasonable callback, and the overall gross profit rate of the industry needs to rise to about 30% to match the return on investment and the current market value of the current LED enterprises. The current price rise is a time card. Since 2012, China has promulgated the "China phase out of the incandescent lamp road map". In October 1st, China prohibited the import and sale of 60 watts and above the ordinary lighting incandescent lamps; by October 1, 2016, our country would completely stop and disable incandescent lamps. "That is to say, starting from October 1st this year, the production and sales of white woven lamp enterprises in the whole country will be completely banned." Cheng Hongwei said that the previous industry has been in a low valley, combined with this time node, the price rise of enterprises is a very normal market rhythm. About 10% of the increase in the industry understanding is to return to a reasonable level. The above industry also said that the current market, the demand for LED products is still growing, and from the return on investment in the LED industry, the current price and enterprise investment still do not match, this is a reasonable rise. "This is a tentative price rise." Cheng Hongwei explained that at present, the industry's productivity utilization has risen to more than 90%. The current price increase is mainly caused by large manufacturers in the industry, but the price increase is not large, relatively conservative, and today's price raising only lets the manufacturer slightly recover to the cost line, and the real recovery from the industry will still take time. Specifically, although the LED industry has experienced the downturn in the industry in 2015, the concentration of the industry in the whole industry is not high enough. Cheng Hongwei said that many enterprises relied on relevant subsidies from the state to alleviate losses, and the time for the cancellation of subsidies is not long, and some enterprises still can be supported temporarily. The speed of the production capacity of the market is not very fast. Therefore, the high increase may also bring about the re growth of this capacity. In fact, in advance, China's LED industry has been experiencing a "barbarous growth" of overcapacity, but the demand for incandescent lamps has been growing in the market. According to the above industry, the substitution rate of China's lighting industry has risen to about 30% at present, and the replacement rate will reach about 70%-80% in the next few years under the requirements of national policy and technology. According to this calculation, the domestic demand for LED products will be doubled. In addition, the current market share in the LED market in China has risen from about 10% to about 30% in the world, and the market share in the future will be at least 50%. In the trend of this demand, the demand for China's LED market is growing rapidly. It is also because of the trend of the development of this industry, before domestic enterprises have been accelerating the expansion of capacity. As an example, hucan optoelectronic, at the beginning of 2012, invested 3 billion 500 million yuan in hucan optoelectronic and expanded its capacity in Zhangjiagang. In 2015, the company set up a production base in Yiwu again. Different from the past, the current industry order has changed a lot. According to the relevant data, the number of LED enterprises in China in 2014 is about 2 million, but by 2015, about 4000 enterprises have withdrawn from the market, and the decline of industrial enterprises has reached 20%. "The business enterprise after shuffling is more rational." The above industry also said that the enterprises are relatively high in technical requirements, and the investment threshold is increasing, and at present, after shuffling, the industry has sprung up a number of larger enterprises, forming a preliminary industry concentration. In other words, the new entrants need a bigger cost to get the opportunity to catch up with the existing business. "It takes at least 3-4 years to catch up on the size of a company, and the cost is more than twice before." Zou Mingxiao said that problems such as overcapacity and low-end products around the LED industry in China have improved, but they have not been thoroughly cleared up. Although there are signs of recovery in the industry, LED enterprises should remain rational, arrange production plans according to market demand, and pay attention to technical research and development.