As the listed companies in the LED industry successively announced the 2013 annual report, the entire LED industry chain was clearly presented in the business situation last year. "Daily Economic News" reporters statistics learned that in 2013 the entire LED industry production and sales volume, but the performance has diverged: upstream and downstream companies are caught in the dilemma of increasing income, the midstream package companies in the income growth, while the profit has improved .
"In 2013, the performance of LED mid-stream enterprises did exceed expectations," Zheng Liyao, vice president of Gaogong LED Industry Research Institute, said in an interview.
Upstream
LED chip production capacity has expanded 10 times in 3 years. Demand improvement does not change the price decline.
In the short period of 3 years from 2010 to 2012, the LED chip capacity expanded more than 10 times. The direct impact of the big explosion was the sharp decline in the price of LED chips. The cumulative decline of LED chips in the same period exceeded 50%, which made the company miserable. .
However, driven by the demand in the downstream lighting application market, the MOCVD capacity utilization rate rose to 52% in 2013, and the operating rate rose to around 70%, and some companies even achieved full production. Despite this, the information that companies are giving back to the Daily Economic News is still conservative, and that chip prices may fall slowly.
Chip manufacturers crazy price war
In the upstream of LED, there are many LED chip manufacturers such as Sanan Optoelectronics, Dehao Runda, Huacan Optoelectronics and Ganzhao Optoelectronics. In addition to Sanan Optoelectronics, the other three companies have announced their 2013 annual report or performance report.
Huacan Optoelectronics Express reported that the company's total operating revenue in 2013 was 316 million yuan, down 4.19% year-on-year. The net profit attributable to shareholders of listed companies was 18.064 million yuan, down 79.32% year-on-year; 4.87 billion yuan, an increase of 29.38%, but the net profit fell by 1.17%; Dehao Runda performance report shows that in 2013 the company's total operating income was 3.17 billion yuan, an increase of 13.04%, net profit of 936.36 million yuan, a decline 94.22%.
“2013 is an exciting year. Due to the rapid development of the lighting industry, the production capacity of the upper, middle and lower reaches has been fully utilized, and the overcapacity has slowed down. 2013 is also a year of anxiety for the industry, although orders A lot, the revenue has increased, but due to the price war, the gross profit margin of the company is getting lower and lower." At the beginning of this year, at an industry forum, Zhang Xiaofei, dean of the High-tech LED Industry Research Institute, said.
The price war in the LED industry begins with the upstream chip. According to statistics from the High-tech LED Industry Research Institute, the price of LED chips in China dropped by more than 30% in 2012 compared with the beginning of the year, and continued to drop by about 20% in 2013.
"In 2012, the price of chips will be very large. For example, (individual type chips) will be a dollar at the beginning of the year. At the end of the year, there will be only one to five to two cents." Dehao Runda related people told the Daily Economic News as an example. Road.
The price war of LED chips is an inevitable outcome of overcapacity.
According to statistics from the High-tech LED Industry Research Institute, the number of MOCVD in China's LED industry increased from 803 in 2011 to 917 in 2012, nearly three times that of 2010, and the total production capacity was more than 10 times that of 2010. In 2013, the total number of MOCVDs continued to increase to 1,017 units, eliminating the active exit factor of the old machines. In 2013, the number of newly added MOCVDs exceeded 130.
The concentrated release of a large amount of production capacity has brought tremendous pressure on LED chip companies. According to the data provided by the High-tech LED Industry Research Institute, the utilization rate of China's MOCVD capacity in 2012 was only about 30%, and the operating rate was only about 50%.
Under-employment, huge machine depreciation losses have brought heavy business pressure to enterprises. For example, Huacan Optoelectronics' 2013 semi-annual report showed that the gross profit margin of the company's chips during the reporting period was -5.27%, and the company's chip gross margin did not turn positive until the third quarter of 2013.
Capacity expansion continues
However, driven by the demand in the downstream lighting application market, the MOCVD capacity utilization rate rose to 52% in 2013, and the operating rate rose to around 70%. At the end of March this year, the reporters of "Daily Economic News" learned from Sanan Optoelectronics and Dehao Runda respectively that the former MOCVD equipment has been fully filled; the latter 54 MOCVD equipments have been mass-produced, and the two bases of Wuhu and Yangzhou have arrived. A total of 92 MOCVD equipment.
In an interview with reporters, Sanan Optoelectronics said that the price of chips may fall slowly, and the decline is determined by the advancement of the company's technology.
It is worth noting that the upstream expansion impulse did not diminish as prices fell. Sanan Optoelectronics announced on April 3 that the company decided to set up a wholly-owned subsidiary in Xiamen to invest in the construction of LED epitaxial and chip R&D and manufacturing industrialization projects. The total investment of the project is 10 billion yuan, and the total scale is 200 MOCVD.
In January of this year, Huacan Optoelectronics announced that the company plans to start the construction of “Huaguang Optoelectronics (Suzhou) Co., Ltd. LED Epitaxial Chip Phase II Project” with its own funds of 305 million yuan. The project plans to form an annual output of 480,000 pieces. Production capacity of 2-inch red-yellow LED epitaxial wafers (for own use) and 15.4 billion red-yellow chips.
Then, in the context of upstream capacity not fully digested, will the company expand again and trigger a new round of excess crisis?
Zheng Liyao believes that these new projects will not be completed until a few years later, so there will be no new pressure on the chip market in the short term. He said that after learning the lessons of the past few years, companies began to become more stable.
Zheng Liyao judged that since most of the chip companies were in a state of loss or breakeven last year, the profitability of this year is expected to gradually improve due to the downstream pull. As for the substantial improvement, it is still difficult to judge.
Midstream
LED package monopoly triple advantage income profit double growth
The upstream and downstream LEDs are either suffering from overcapacity or facing the market competition. In sharp contrast, the mid-stream of the LED industry, especially the sub-sectors represented by packaging, has been quite moist. Many companies have achieved simultaneous growth in revenue and net profit. The LED packaging industry has been able to grow against the trend, in addition to the growth of demand in the downstream lighting market, but also related to the company's own competitiveness. And these favorable factors are expected to continue.
Demand and competitiveness double improvement
Among the A-share listed companies, Jufei Optoelectronics, Wanrun Technology, Hongli Optoelectronics, Ruifeng Optoelectronics, etc. all belong to LED packaging enterprises. In 2013, these companies handed over reputable transcripts.
Among them, Jufei Optoelectronics revenue was 754 million yuan, up 52.19% year-on-year; net profit was 131 million yuan, up 43.06% year-on-year. Hongli Optoelectronics' total operating income was 736 million yuan, up 38.79% year-on-year; net profit was 58.88 million yuan , a year-on-year increase of 24.56%. Ruifeng Optoelectronics operating income of 682 million yuan, an increase of 36.37%, net profit of 56.6 million yuan, an increase of 20.78%. Wanrun Technology's operating income increased by 12.32%, attributable to the listed company's shareholders' net profit increased by 15.5 %.
“Downstream lighting, backlights and displays directly drive the growth of packaging companies.” Zheng Liyao pointed out.
Zheng Liyao also believes that with the continuous advancement of technology in mainland enterprises, product quality continues to improve, market acceptance has gradually increased, and mainland companies have also seized some of the shares of Taiwanese companies, which is also an important reason for the growth of LED packaging companies.
LED packaging companies also benefit from the characteristics of their segmented industry. The mid-stream enterprises provide semi-finished products without facing the end consumers, so they do not need to build brands and channels on a large scale like the downstream enterprises, and the sales costs are low.
Downstream expansion is costly
In order to gain a larger living space, some packaging companies choose to expand downstream. For example, Hongli Optoelectronics has Latiya Lighting, and Wanrun Technology also has a part of lighting products. Changfang Lighting’s revenue from lighting products accounted for 30% of total revenue last year.
Packaging companies involved in downstream applications, the different strategies adopted in the channel, the final effect is not the same.
Hongli Optoelectronics began channel construction in March 2012. According to the news of Panorama Network in March last year, Hongli Optoelectronics had about 100 dealers, and there were direct sales centers in five cities including Shenzhen and Suzhou. Li Guoping, the chairman of the company, said at the time: "I have invested a lot of money now, and frankly the income is not high."
On April 3 this year, Hongli Optoelectronics Secretary-General Deng Shou-tie said in an interview with the reporter of "Daily Economic News" that the dealership is now suspended, not done, and the cost is too high. At present, the company is mainly a municipal engineering channel, and cooperates with engineering companies. Such channels do not require any investment.
Wanrun Technology is also cautious about the investment in physical channels. Hao Jun, the company's director-general, told the "Daily Economic News" reporter that since last year, the company is also building channels, there are several stores, but not a large-scale construction, channel construction has not been the focus of the company in recent years.
Hao Jun introduced that, subject to price factors, the company believes that the civilian market has not really started, so Wanrun Technology is currently focusing on commercial lighting and lighting projects. This product feature also determines that it does not need to develop dealers on a large scale. Promotion.
Rectangular lighting is also expanding its channels in the downstream industry. According to the information disclosed in December last year, the company has established an agent system in more than 30 provincial-level administrative regions and hundreds of municipal and county-level administrative regions, with over 1,000 distributors.
Large-scale channel construction generated sales expenses of up to 52 million yuan, an increase of 84.80% year-on-year. Although Changfang Lighting's revenue increased by 42.03% in 2013, its net profit fell by 42.21%, which became a decline in profits in LED packaging companies. One of the larger companies.
Mei Zhimin, the brand director of Chau Ming Technology, told reporters that in terms of traditional channels, building a store would have to subsidize 100,000 yuan, and 100 stores would have lost 10 million. Hao Jun said that if you want to build a direct sales store, 100,000 is not enough, you may need 200,000 yuan.
Traditional channel construction also faces inventory problems. Mei Zhimin pointed out that after the store is built, the manufacturer has to press the dealer to press the goods, but the LED is an electronic product, and the inventory price risk is very high.
On April 10, the reporter called Changfang Lighting Securities Department. The staff said that at present, Changfang Lighting is already doing brand integration, and will focus on the “Changfang” brand. The other two LED lighting brands are subject to development.
Liu Jun, director of Guangdong Guangya Lighting Research Institute, believes that the packaging business is in the middle of the entire LED industry chain, and its special location is easily squeezed and restricted by upstream chips and downstream applications. From the upstream point of view, some large chip companies, such as Jingyuan, Sanan Optoelectronics, etc., will participate in some packaging enterprises to open up the downstream industry chain; from the downstream, some application companies will also extend to the upper end of the industrial chain in order to master the core technology. . However, the chip field has a high threshold, large investment, and difficult to enter, so it has become a choice for some application companies.
"The whole industry looks like the number of packaging companies may be less and less." Liu Jun said.
However, for listed companies in the packaging industry, Liu Jun believes that the midstream links continue to maintain rapid growth should not be a problem. The penetration rate of the entire downstream application is further increased, and these large packaging companies will continue to produce pulling effects.
Downstream
LED lighting attack and defense battle is in full swing, the new pattern will be seen after 1 year.
The days of LED upstream companies are difficult, and the downstream is also difficult.
Based on the expectation of the LED lighting industry, many listed companies have cut into this field, such as Qinshang Optoelectronics and Zhouming Technology; traditional companies such as NVC Lighting and Foshan Lighting are obviously not willing to hand over the market to their opponents. They have sacrificed The price of the knife to maintain their relative advantage in the LED lighting industry.
In the downstream of the LED, because the companies are set foot on each other's sites, the competition pattern of the industry is inconspicuous, and the short-term connection is inevitable.
New entrant channel confusion
Listed companies focusing on LED downstream applications include Qinshang Optoelectronics, NVC Lighting, Foshan Lighting, Snowlight, Lianjian Optoelectronics, Alto Electronics, and Zhouming Technology. The first four are mainly lighting products, and the last three are mainly display products.
In Zheng Liyao's view, as companies intervene in each other's inherent territory, there is still a big fight between LED downstream companies.
One is the emerging LED brand such as Qinshang Optoelectronics and Zhouming Technology, and the other is the company that cuts into LED from traditional lighting such as NVC Lighting and Foshan Lighting.
Old-fashioned lighting companies have a first-mover advantage in terms of channels. Take NVC lighting as an example. The company has 37 operation centers in the country and more than 3,000 specialty stores. This channel advantage is unmatched by such new LED lighting as Zhouming Technology.
Compared with the old lighting companies, investing heavily in improving the channels is an indispensable step for new entrants. For example, Qinshang Optoelectronics called 2013 the channel construction year. In April of that year, the company held the first national investment conference in Dongguan headquarters. At that time, it planned to control the number of dealers to about 500, but the final registration number exceeded 1,000. .
In November 2013, Qinshang Optoelectronics disclosed that it plans to dismantle and integrate more than 30 offices across the country under the framework of the company's headquarters operations management center. Based on regional branches, in Beijing, Shanghai, Guangzhou, etc. Large cities set up regional marketing management centers to build a nationwide marketing management platform. The total investment of the project is 44.66 million yuan.
Qinshang Optoelectronics Express reported that in 2013, the company's total operating income was 1.040 billion yuan, a year-on-year increase of 26.53%, and net profit was 88.86 million yuan, down 14.60% year-on-year. For the decline in net profit, Qinshang Optoelectronics explained that the global channel network was vigorously laid last year. , resulting in increased costs; accelerated expansion of the global market, resulting in increased promotion costs.
Mei Zhimin, the brand director of Chau Ming Technology, said in an interview with the reporter of "Daily Economic News" that companies like NVC Lighting and Opt have been deeply involved in lighting channels for many years and have already set aside the hill. Now it is still 10 years. The way that companies built channels 20 years ago to copy the roads that others have traveled is undoubtedly over the mountains.
"There are a lot of pits and ditch waiting for you inside. So for emerging brands, the only chance of winning is to change a hill, change a battlefield, and change the gameplay." Mei Zhimin said.
What Mei Zhimin said is “new gameplay” refers to the sales model of O2O. In this mode, the company has very little investment in online stores, only one signage fee. The offline store is mainly used for consumer experience. The company will drop a TV terminal online and guide the passenger flow from the offline to the online through the terminal. There is almost no problem with product inventory in this way.
However, Mei Zhimin also told reporters that at present, Zhouming Technology has only 50 or 60 offline entities in the country to experience stores. Some analysts believe that it is to be seen how many customer experience stores can lead to the online experience. In addition, the habit of consumers purchasing lighting products online needs to be further developed.
Old brand price butcher knife blocked
Emerging brands compete with traditional brands, while old brands compete with emerging brands for price. In order to consolidate the market share, NVC Lighting and Foshan Lighting have raised the “price butcher knife”.
