Our gross margin decline showing reversal trend leading growth period LED package

M.L.S. April 28th evening released the first quarterly report, the company's first quarter operating income of 819708297.06 yuan, an increase of 9.15%.

Unit: RMB

Although our first quarter of 2016 compared to the same period last year only weak operating income grew 9.15%, gross margin but from the point of view, from the beginning of the two quarter of last year continued to decline significantly stopped, and had reversed trend. This also reflects the LED packaging industry in the second half of 2015 lasted nearly half a year of recession is nearing completion, and combined with the first in the industry to launch MLS start price measures in April, expected future gross margin is expected to rise further, to maintain the normal level of about 20%~25%.

Gross profit margin fell for the LED industry, is not a case of a LED company. According to LEDinside recent statistics 13 listed companies Q1 LED data, the industry as a whole to a certain extent decline. This is mainly due to two reasons.

First, affected by the international market exchange rate fluctuations, Chinese LED lighting at the end of 2014 export growth had slowed in 2015, affected by the global economic downturn, a low degree of influence, Chinese LED lighting demand weak, despite the rise in demand for 5-7 months, but the first half of the market and pile up in excess of requirement for the LED industry chain prices fell 30-50%, the price of the product international business has more than 20% decline.

Second, in 2015, the price war and the homogenization of products, such as fierce competition, a large number of small and medium enterprises to withdraw from LED, a number of bankrupt companies have to sell low inventory, impact on the market, and the formation of a vicious cycle.

According to Founder Securities said, LED packaging industry has experienced accelerated investment in production capacity of 2010-2012 years to 2012-2015 years, prices continued to decline after the basic completion of the thorough reshuffle, industry pattern has been set, leading the company talent shows itself. From the packaging capacity, M.L.S. was 360 billion 2015, nationstar 48 billion, honglitronic was 15 billion only, but also shows the advantage of no shake rawlinson.

This point, from the revenue of LED package's green energy division of TrendForce's LEDinside global LED manufacturers can be seen in the 2015 rankings, ranked ninth in the global package rawlinson.

Obviously in the enterprise LED industry polarization, large enterprises through scale advantages to further expand, small and medium-sized enterprises are hard to survive, or exit into normal situation, Linsen scale road seems to be more competitive in the future development will.

It is worth mentioning that, in May 2015, the State Council promulgated the "Chinese manufacturing 2025" strategic planning, emphasis on manufacturing industry in the future will be to green, energy saving and environmental protection and intelligent development of standardization, but also highlights the prospects for the development of large-scale Linsen road.

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