LED industry will be fully integrated into the upstream and downstream stages of integration

Insiders pointed out that the LED industry has entered the stage of merger and acquisition integration of the main melody, and this period may last 2-3 years. On the one hand, the use of public lighting, commercial lighting and gradually heavy volume, laying the foundation for the market; on the other hand, the industry is not bad for the advantages of the integration of enterprises, the use of industry consolidation to occupy a larger market. The reporter visited the part of the LED listed companies get information quite optimistic: Sanan Optoelectronics (600703), Elec-Tech junduoli, photoelectric vision have failed, LED industry related enterprises continue to burst the funds, the operating difficulties of the news.

Insiders pointed out that the LED industry has entered the stage of merger and acquisition integration of the main melody, and this period may last 2-3 years. On the one hand, the use of public lighting, commercial lighting and gradually heavy volume, laying the foundation for the market; on the other hand, the industry is not bad for the advantages of the integration of enterprises, the use of industry consolidation to occupy a larger market.

The reporter visited the part of the LED listed companies get information quite optimistic: Sanan Optoelectronics (600703), Elec-Tech (002005) is accelerating the realization of such as the layout of the whole industrial chain and packaging enterprises such as the country star power (002449), honglitronic (300219) is to extend its business to the downstream application, KingSun (002638), snow Wright (002076), by focusing on applications, to meet the upcoming market volume.

Continued industry consolidation since last year, regardless of the international market or the domestic market, many LED companies operating difficulties, such as vision, photoelectric junduoli have closed down, and the integration of the industry have also occurred, such as crystal electric acquisition guangjia. Insiders pointed out that such industry consolidation may last 2-3 years

From the industry as a whole, due to the economic downturn, many LED companies are facing downward pressure on profitability.

Nationstar introduced in LED packaging and application products, LED industry, epitaxial chip package and lighting applications in the production release period, the industry will inevitably lead to each end of the raw material prices of non rational market volatility, expected product prices will continue to fall, the price war is normal market. Orient Securities analyst Zhou Jun also described a similar point of view.

He pointed out in a recent report, LED downstream packaging and application of a large number of enterprises, small scale, low capital, in the economic downturn environment can not continue to operate. And this industry situation also laid the foundation for industry consolidation.

The deputy general manager Dunfee introduced, such as public lighting lamps in the order competition, many small enterprises annual production capacity is only 1000 - 2000 of light, but only in Zhuhai this year will need to be replaced about 30 thousand lights, next year to reach 60 thousand light, taking into account the technical certification, street lamps scale the supply and price of cost and financial strength and other factors in the bidding process, small and medium-sized enterprises is difficult to have the opportunity to compete with large enterprises.

He said: in the ongoing capital and operating pressure, many companies will face exit, which will help form a large enterprise. Industry integration is not only reflected in the horizontal expansion, vertical integration of upstream and downstream has gradually become a significant feature of the LED industry.

For example, as early as in 2011, CREE (CREE) announced the acquisition of lighting manufacturers RuudLighting, CREE will extend its tentacles to the high-performance LED lighting applications market. And such cases gradually increased in the LED industry.

"The general rule is that when a new industry develops to a certain period, it will enter a period of integration, which is beneficial to the long-term healthy development of the industry. A "LED industry experts said that the future of the industry will form one to two leading enterprises.

Enterprise food market relevant responsible person pointed out that the integration of the industry is not a bad thing, will help enterprises gain greater market share advantage. At the same time, the promotion of policies, the decline in product prices, public lighting and commercial lighting applications such as the gradual opening of the market for the development of LED enterprises laid a broad market space.

Orient Securities Zhou Jun pointed out that the current domestic LED upstream pattern gradually clear, Sanan optoelectronics, Elec-Tech has become the first echelon, the rest is in the second echelon, the non-listed company has around 90, most of the smaller, the future is bound to become the object of integration. It is understood that Sanan optoelectronics, LED has more than Elec-Tech advantage of enterprise competitive advantage in the upper reaches of the whole industry chain gradually formed the pattern of the company.

Sanan optoelectronics is one of the leading domestic enterprises LED, LED industry chain upstream and downstream products covering chip application. In the first half of 2012 the company achieved operating income of 1 billion 370 million yuan, an increase of 90.53%, attributable to shareholders of listed companies net profit of $466 million, an increase of 1.55%, net profit after deduction of non - profit of $304 million, an increase of 94%.

Golden State Securities Zhang Shuai pointed out that with the gradual release of production capacity of Wuhu base, the number of company of production of MOCVD total has reached 100 units, the second half of the company still has 30 sets of MOCVD will be gradually opened, is expected in the second half of the company's revenue growth will further enhance.

The company after 3 years of construction, the effect of transformation of the LED industry has been gradually reflected, the company has achieved in Wuhu, Dalian and Yangzhou, industrial layout, and built from LED epitaxial chip to the package, the vertical integration pattern to the lighting and display.

In 2011 the company LED product revenue of more than 900 million yuan, accounting for about 3 of total revenue, while the company is expected to reach this year accounted for more than 5.

Elec-Tech is the current domestic LED enterprises only 4 inches LED epitaxial chip scale production of the company, the first half of this year, Wuhu, Yangzhou base has been the arrival of MOCVD80, before the end of the year there will be mass production is expected to more than 40, become the representative of the latest domestic enterprises LED epitaxial chip technology.

Deputy general manager Dunfee introduction: "Elec-Tech has created a whole industry chain model complete, which will effectively reduce the cost of product. He said, "many companies buy chips from the chip manufacturers to do packaging packaging factory, after the application of terminal products sold, if each link to roughly 20% gross margin calculation, then the need to increase the cost is not small, but the whole industry chain enterprises can avoid the middle part of the cost, thus have a stronger market competitiveness.

In addition to the vertical integration of enterprises, in the past engaged in packaging companies are trying to expand, have to seize the market. For example, the country star power to the downstream breakthrough, mainly engaged in packaging honglitronic downstream application products use etc.. Honglitronic executives have said in an exchange, Guangdong province launched the first LED promotion plan in the country, and Guangzhou is Guangdong the lead pilot city, Guangzhou LED company is not much, but larger, better quality is mainly honglitronic, Guangdong EMC is expected to promote the rapid development of the company in the field of product application.

In the channel capacity is relatively strong, KingSun Wright and other enterprises, mainly focus on the application of products on the market, trying to seize the market differences in the mode the outbreak of the first cup of soup.

Director Zhang Xian Wright pointed out that the development path of each enterprise is different, but there is a little more determined, is expected to take about 2 years to usher in volume in the future LED lighting market, related enterprises can obtain good returns.

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