Triangular debt, price war dragged on the development of the LED display industry in Dongguan

The first half of 2013, for the LED display industry in Dongguan, can be said to be mixed. On the one hand, benefit from the LED market, LED display is continuously increasing; on the other hand, because of low technical threshold, the price war makes the industry profits have been diluted, triangular debt spread also dragged down the performance of enterprises. The reporter visited the company learned that, affected by the decline in profits and debt and other factors, some Dongguan LED companies began to seek transformation, some gradually into the lighting field, or to force the media advertising industry chain downstream. Relative to Shenzhen, Dongguan LED display number of enterprises is not much, in dozens of. This year, Shenzhen has a large number of large display companies closed down, Dongguan display industry is also a number of problems, but there is no collapse of enterprises. Some of the strength of the enterprise, in order to avoid risks, has been stepping up research and development. Since Dongguan Semiconductor Industry Association Deputy Secretary General Zhou Jianliang long triangle debt caused by corporate private lending in 2013, general manager Huang Xing Electronic Technology Company Luo song has been busy, in addition to the new products for their own R & D for marketing channels, most of his financial problems is scorched by the flames. A few years ago, Xing Huang electronics focus on R & D flip LED display, the beginning of this year launched a large-scale product marketing, lack of funds highlights the problem. Closely related to the enterprise funds is the problem of triangular debt. Luo song introduction, triangular debt problem in the LED industry is more common, especially in the display of this segment is the most prominent, this year, due to the overall market is not optimistic, triangular debt in the industry has become increasingly fierce. LED display companies operating costs are generally relatively high, triangular debt problems exacerbated the difficulty of capital turnover". Dongguan city Yongxing electronic technology company had also involved in LED screen business, the company responsible person, the downstream customer LED display enterprises face is the main media advertising company, media advertising company in engineering projects, usually with companies signed an agreement, in accordance with the progress payment; and the LED display enterprises upstream suppliers generally require full payment. Display companies caught in the middle, bear the burden of triangular debt. During this time, Luo song every day to find ways to raise funds. In banks and other financial institutions for help hopeless, he chose to wait. There are companies choose private lending, private lending, the cost is very high." He added. Price war dilution of the profits of the industry to make another LED display headache is the industry increasingly diluted profits. In the LED industry chain, the display is relatively low end of the link, the technical threshold is low, the competition tragic. Luo song memories, five or six years ago, LED display industry gross margin is also maintained at around 50%, net profit of more than 30%, but with the rapid increase in the number of enterprises in recent years, the industry has less than 30% gross profit, net profit of less than 10%. Sometimes in order to compete for a project, 5% of the profits are also rushing to do." He said helplessly. Market research institutions have done statistics: display do more than 100 million yuan in the country has a total of more than more than and 40, while the net profit of up to 10% of the enterprises rare. Mr. Shaw, a Dongguan LED production company deputy general manager said, at present the LED display industry competition is very serious, the customer demand is very common, some even asked the companies to do a free display, advertising revenue and payment. It is reported, LED display manufacturers and advertising media companies, often by LED manufacturers to invest in screen advertising revenue offset payment or advertising into. This way to build a screen looks profitable, but in fact, the cost of risk fell on the head of the LED display business. If the screen does not bring advertising media companies to profit, LED display companies will lose. - read LED display enterprise transformation path selection in the first quarter of 2013 LED listed companies reported 14 companies, the scale of the overall revenue growth of 24%, but the overall profit fell 4%, is mixed. In order to get rid of the plight of low profit margins, many LED display companies began to explore new ways. Newspaper reporter combing the two typical path of LED display enterprise transformation. The transformation path of the 1 breakthrough advertising media business enterprise docking is usually LED display advertising media company, in this chain, the bulk of the profits from advertising media companies usually cut away, and the risk to the enterprise display. Many display companies aware of this problem, have set up their own advertising media company. To do so, to earn a display screen, advertising and then earn a profit, in order to boost performance. Luo song while maintaining the main industry, but also involved in the advertising media industry. Currently, he has two advertising media companies, located in Dongguan and Chongqing. "In this industry for many years, has accumulated a number of large customers, we can pick up their orders, profits are owned by ourselves." He introduced the road. Of course, involved in the advertising media business, we must ensure that the display can bring advertising revenue. Over the past two years, Luo led his research and development team, has been in the development of new products, and finally successfully developed two turn LED display. This product has broken the traditional LED big screen single form and business model fundamentally, making the post investment, zero risk, zero burden, not only broadens the media business channels, also realizes the profit maximization." Transformation path 2 to do LED lighting products Dongguan Yongxing electronics company had been involved in LED show