The LED industry environment is no longer the expansion of the taboo from the blind

On February 9th, the China Securities Regulatory Commission recently disclosed the information of listed companies to be listed, involving 16 LED companies in the industry chain of materials, chips, packaging, and applications waiting for the IPO. China's LED industry has thousands of companies, but the single enterprise's annual sales of more than 1 billion yuan, most of them are hovering around 100 million yuan, and the main cause of large-scale enterprises is the lack of funds. Following the successful listing of Lehman Optoelectronics, Hongli Optoelectronics, etc. last year, Wanrun Technology once again opened the floodgates for LED industry financing. However, experts pointed out that the current LED industry environment is no longer the same, related companies should not blindly IPO, need to consider industrial risks.

16 proposed IPO <br> <br> start another wave of investment in recent years, China LED industry can be described as turbulent, people "overwhelmed", the biggest feature is the company accelerated the pace of landing the capital market. "Flocking" has become the main tone throughout the entire year. In January 2011, Lehman Optoelectronics was formally listed; in May, the domestic LED packaging company Hongli Optoelectronics successfully landed on the Shenzhen GEM; in June, Alto Electronics and Chau Ming Technology also successfully landed on the capital market; in July, Ruifeng Optoelectronics joined LED listed companies camp; in October, the joint construction of photoelectric is also officially listed; in November, ground on Optoelectronics listed on the Shenzhen Stock Exchange.

According to statistics, in 2011, the output value of China's LED industry reached 154 billion yuan, an increase of 22% year-on-year, and the output increased by more than 50% year-on-year. This speed of development has caused many companies to "covet three feet."

This year China's LED industry is still continuing its listing last year. Shenzhen Wanrun Technology took the lead in accessing the capital market. On February 8th, it held a ceremony for the signing of the IPO for the initial public offering of shares, and released the results of the winning and placing of the shakedown under the net.

On February 9th, the China Securities Regulatory Commission recently disclosed the information of the companies to be listed. There are 16 companies involving LEDs. Among them, there are six small and medium-sized boards to be listed, including Mu Linsen, Shenzhen Moso Power Technology, Ningbo Hualong Electronics, Shenzhen Kelik Technology, Guangdong King Wright Appliance, and Ocean King Lighting Technology. There are 10 companies to be listed on the Growth Enterprise Market, including Chevron Semiconductor, Liad, and Jufei Optoelectronics.

It is clear that a new wave of listings has already taken shape, and companies have "had no choice but to send". Xu Huai, secretary-general of the China Illuminating Society, sighed in an interview: “In recent years, investment in the LED industry is too hot. Some companies that are supporting companies such as power control companies are also seeking listing.” From the list of companies listed and proposed for listing, We can easily find that most of these companies are small and medium enterprises.

Billion enterprise mostly "bad money" is the main reason <br> <br> Needless to say, the listed companies is a tool to break through the bottleneck of funds, leveraging leverage enterprise development. This is especially important for Chinese LED companies. Zhou Jun, an analyst at Orient Securities, said in an interview with a reporter from China Electronics News that at present, there are a large number of companies in the LED industry in China, as many as several thousand, but the scale of the enterprises is small. In 2010, there was no sales revenue exceeding RMB 1 billion. The number of enterprises in 2011 is also small. The annual sales revenue is between RMB 500 million and RMB 1 billion. The annual sales revenue is mostly below RMB 300 million, and it is basically around RMB 100 million.

"For small and medium-sized LED companies, the listing brings advantages in capital, brand, and corporate governance, and provides a good foundation for the company to become bigger and stronger." Chairman and CEO of Shenzhen Lehman Optoelectronics Technology Co., Ltd. Manager Li Mantie said.

In addition to financing, listing will also help build the overall strength of the company. It is understood that whether it is the epitaxial, chip, or optics, heat dissipation, materials, etc., China's LED-related companies are small in scale, lacking core technologies, and professional LED companies do not have advantages in channels and brands, so the raising of funds is beneficial to the promotion of the company. R & D, management, brand promotion and other capabilities.

In addition, listing can also increase the company's ability to take risks. For example, in 2011 there were many LED company failures in China, of course, there are weaker technologies, too small, market competition intensified, the end market growth and other factors, many of which are due to the expansion is too rapid, the capital chain broke down.

“Before LED-related companies had weaker confidence in the market, the first batch of Guoxing Optoelectronics and Qianzhao Optoelectronics, which were listed in 2010, were listed successfully in Lehman Optoelectronics at the beginning of 2011, which brought great success to the subsequent listing of LED-related companies. Inspired by the confidence and boosted confidence in the market, there are more LED companies preparing to reform IPO, so raising funds through IPO is conducive to the rapid expansion of the company's scale. Currently, most of the LED-related listed companies in China are using new production lines. And equipment purchases." Zhou Jun said.

However, the listing is a double-edged sword. Zhou Jun added: "The listing has strengthened everyone's understanding of the industry and the company, and also exposed many deficiencies. Actually, it is not like how the technology boasted in the market is leading and the quality of the products exceeds that of international standards. Therefore, with the LED With the increase of listed companies, people's understanding of the LED industry has deepened, and subsequent listing requirements for LED related companies will become increasingly stringent.” Li Mantie also believes that because of the listing, corporate information is more transparent, social responsibility is also more important, and accepts various types of Regulation will be more stringent.

Avoid redundant expansion <br> <br> need to be cautious because the overheated investment, the current Chinese LED enterprises up to thousands. Taking Foshan as an example, in the five years, the number of companies doing LED development has grown from double digits to more than 300 now, and 80% of Foshan traditional lighting companies have switched to the LED industry.

However, last year's collapse of a series of small and medium-sized enterprises such as Shenzhen Duo Duoli and Bolente Optoelectronics presented the difficult situation of SMEs to the people. On the surface, it is a shortage of funds, but in-depth analysis, in fact, is caused by the lack of technology and cannot be sustained. Because these small and medium-sized enterprises produce products with low quality, short life span and high maintenance costs in the later period, even if they just swallow a sum of money, they will immediately spit it out.

Listing is just a means, not an end, nor an end. After the listing of a company, the pressure it faces will be even greater. Only by having core technology as a safeguard can it be able to claim the top spot in the capital market.

It is understood that the results of the online auction of Yaohao released on February 8 by Wanrun Technology show that the issue price is RMB 12/share, which is far from the price range given in the analysis report of each institution. Some analysts said that this phenomenon shows that institutional investors are not confident about the prospects of Vantron Technology. For Wanrun Technology, which has been successfully listed, if it wants to be successful, it must convince investors that it believes that Wanrun Technology has strength and development prospects.

As we all know, due to the technical strength and foreign companies there is a certain gap, China's LED companies are mostly concentrated in the relatively low technical threshold of the middle and lower reaches of the packaging and application areas, Wanrun Technology is an LED packaging company. In 2010, industry insiders told reporters that investment packaging industry opportunities outweighed risks, because there are relatively few listed companies in the packaging industry, and competition is relatively less intense. In addition, the intellectual property barriers of packaging are small, and packaging companies are conducive to the expansion of the upstream and downstream industries. .

However, after a short period of 2 years, the LED industry has become “a big change”. Many packaging companies, such as Hongli Optoelectronics, Lehman Optoelectronics, and National Star Optoelectronics, have already been listed. In addition, due to the peak investment period, the overcapacity and price cuts in the upstream chips, and the overcapacity in the packaging industry in 2011, both prices and gross margins have fallen. The LED packaging industry has entered a white-hot competition state in 2011. Today, in the context of another wave of corporate outbreaks, if you want to start from scratch, in addition to financial strength, companies must have the technical strength to be bigger and stronger and come to the fore.

“The investment in the LED industry was in a state of great leap forward in 2010, especially in the upper reaches of the industrial chain, and the capital investment was huge. Based on the unmet demand and low level of repeated investment, the LED industry appeared a grim situation in the second half of 2011. The future of the LED industry is bright and there are many opportunities. However, it is not enough to invest capital. The carrier of investment must be clearly market-oriented, have obvious technological advantages, and be robust in operations and management, Li stressed.

Zhou Jun also pointed out that after the completion of the company’s fundraising, there are abundant funds, and it should be based on its own situation, focusing on its advantages, gradually filling the gaps, and not blindly expanding. Whether it is in materials, equipment, optics, thermals, etc., or in manufacturing, design, etc., only a certain technological advantage can have a foothold.