[Source: Gaogong LED's "LED Research Review" magazine February issue Reporter / Zhao Hui] In the past 2012, overcapacity, price war, bankruptcy, mergers and acquisitions, the scene of the industry is like a lantern in the LED industry. The entire LED industry did not ushered in the spring as expected, and still struggled in the cold winter.
From the end of last year to the beginning of this year, various listed companies have successively shown a "revenue" for one year. Words such as declining performance and poor business performance frequently appear in the 2012 performance forecast of LED listed companies.
Among the upstream enterprises, Nanda Optoelectronics (SZ.300346) released the 2012 annual performance report on February 27, which showed that the total operating income last year was 178 million yuan, down 45.09% year-on-year, and the total profit was 105 million yuan, down 49.59% year-on-year. Dehao Runda (SZ.002005) performance report shows that last year, the company's LED business revenue growth was lower than the company's expectations, operating profit decreased by 81.04% compared with the previous year, total profit, net profit attributable to shareholders of listed companies decreased by 54.01 compared with the previous year. % and 57.14%.
In the middle of the package and downstream lighting and display companies, the days are not good. The net profit attributable to shareholders of listed companies by Hongli Optoelectronics (SZ.300219), Zhouming Technology (SZ.300232) and Lianjian Optoelectronics (SZ.300269) decreased by 30%-40% compared with the same period of last year.
According to the statistics of the High-tech LED Industry Research Institute (GLII), the total output value of China's LED industry in 2012 reached 205.9 billion yuan, a year-on-year increase of 34%. Among them, the output value of LED upstream epitaxial chips, midstream packaging and downstream applications were 7.2 billion yuan, 39.7 billion yuan and 159 billion yuan respectively, up 20%, 24% and 37% respectively.
The market growth rate still maintains a high level, but the speed of capacity expansion of the entire LED industry is far greater than the growth rate of demand, and the resulting price competition has caused the entire LED industry to burst out of chill.
Super 60% corporate profit reduction
Up to now, among the listed LED companies that have released the 2012 performance forecast, more than 60% of the companies' net profit in 2012 showed a downward trend year-on-year. The companies with more profit declines mainly concentrated in the upstream chip, raw materials and ancillary equipment enterprises, and packaged. Corporate profits have also fallen. In the display companies, in addition to positioning the high-end market Alto Electronics, other companies' profits fell by more than 30%.
As far as the operating income of listed companies is concerned, most enterprises can still maintain year-on-year growth. Most of the enterprises that have increased their income in the whole year have not seen a significant increase in net profit. The phenomenon of “increasing income without increasing profits†was particularly good in 2012. prominent.
"This year is mainly because of the fierce competition in the LED industry, and the overcapacity has brought about a significant drop in product prices," said Zhai Zili, deputy director of research at the High-Tech LED Industry Research Institute (GLII).
In 2012, the LED industry experienced a brutal market reshuffle. The over-investment in the upstream epitaxial chip field since 2010 has caused a serious overcapacity in upstream production. The upstream epitaxial chip companies have an average utilization rate of less than 50%.
The gross profit margin of midstream packaging companies also fell further, and the squeeze of profit margins forced more packaging companies to lay down and transform downstream.
In the field of downstream applications, especially in the field of highly competitive display screens, there have been a number of billions of display companies in bankruptcy last year. According to the statistics of the High-tech LED Industry Research Institute (GLII), the average annual price decline of all products in the LED industry chain in 2012 was more than 25%, and the annual average price of LED packaging products fell by more than 40%.
The rapid decline in product prices has further lowered the profitability of enterprises. In addition to the fierce competition in the industry, the market demand for lighting applications has not been fully released, which is also an important reason why LED companies failed to achieve good results in 2012.
"At present, the lighting application field is mainly the main project of engineering projects, especially the outdoor street lights are still dominated by government projects." Huang Guanzhi, vice chairman of Qinshang Optoelectronics, told the reporter of "High-tech LED".
According to the statistical analysis of GLII, in 2012, some domestic LED application markets maintained a relatively fast market growth, especially indoor functional lighting, outdoor functional lighting, special lighting and medium and large size backlight LEDs. The output value growth rate is over 60%.
However, in general, the terminal consumer demand is still not fully released, and the general lighting market penetration rate is still less than 7%. The central and local governments are still the main driving force for the LED lighting project and municipal renovation projects. The orders are mainly concentrated in several listed companies. Companies and large and medium-sized enterprises with resource advantages.
Packaging companies' profits decline faster
Since the beginning of 2012, packaging companies have generally felt that their days are getting worse, prices are falling, and gross profit is declining.
According to GLII statistics, the size of China's LED packaging industry reached 39.7 billion yuan in 2012, an increase of 24% over the 2011 total of 32 billion yuan. In 2012, the number of companies involved in the LED packaging business in mainland China increased from 1,700 in 2011 to 1,750. In 2012, there were more than 200 companies in the field of LED packaging in mainland China, and more than 250 new LED packaging companies.
At present, the LED packaging industry has gone through the era of high gross profit. In 2012, the average price of LED lighting white-light encapsulating devices in mainland China dropped by more than 30%.
From the perspective of packaging companies that have released performance forecasts, the profits of packaged companies generally declined rapidly in 2012, and the profits of some enterprises fell by more than 40%.
“The price of packaged products has dropped rapidly last year, and the gross profit of many products has fallen to the bottom. Now there are new packaging factories emerging, and competition is intensifying,†said Deng Shoutie, vice president and director of Hongli Optoelectronics.
According to GLII data, in the first half of 2012, the output of packaged devices increased by 40%-50% compared with the beginning of the year, and the production capacity increased by 70%. Supply and demand do not match, new entrants increase, especially the universal homogenization of domestic packaging products, is constantly squeezing the original profit space.
Zhou Feng, executive vice president of Jiangsu Wenrun Optoelectronics Co., said that the overall macroeconomic downturn last year also exacerbated the competitive pressure of packaging companies. Coupled with the gradual release of new capacity in the previous two years, the price of components has been falling.
Display company "chill" bursts
In 2011, Shenzhen Duo Duoli and Vision Optoelectronics closed down one after another. In 2012, Haobo Optoelectronics, Daxiangjie Optoelectronics and other LED displays also followed suit. These display companies with revenues of over 100 million are not trapped in the capital chain.
According to GLII data, the LED output is the slowest growth in the LED application field in 2012. As the industry has entered the competition elimination period, the price has dropped significantly. The annual output value is only 24.1 billion yuan, a year-on-year increase of 10%.
Disorderly competition and low-price grabbing have become a major feature of the LED display industry in 2012. Due to the low barriers to entry in the display industry, coupled with the rapid increase in the number of companies in the display industry in the past two years, there have been many situations in which there has been a lot of porridge, followed by the collapse of prices and low-cost grabs. Many companies do not hesitate to push down prices in order to compete for the market, while reducing the proportion of down payment. In the craziest time, some companies only need customers to pay 15% to 20% down payment.
According to the internal staff of Shenzhen Big Eye Optoelectronics Co., Ltd., which was involved in the bankruptcy storm, the company seized market share through low price and low down payment ratio during the period of rapid development, resulting in a continuous decline in gross profit margin, and most of the later payments were not normal. The recovery directly led to the break of the company's capital chain.
"At present, the gross profit of the LED display distribution channel has dropped to 10%, and the engineering channel can still be maintained at more than 20%." Feng Jinsong, vice president of Shenzhen Hengguan Technology Co., Ltd. told the "High-tech LED" reporter.
Based on the high-end market, Alto Electronics is unique in the sluggish display industry. In 2012, the company's net profit increased by 30%-60%.
Alto Electronics' secretarial office staff said that Alto Electronics has completed large-scale LED video display projects such as Euro 2012 and New York Times Square in the high-end display field, and has deep cooperation with domestic banks and telecom customers. The gross profit margin of the company's LED video display system, LED information release and indication system and electronic receipt system remained stable at 45.52%, 38.12% and 40.20% respectively.
The High-Tech LED Industry Research Institute (GLII) expects that the LED display market will grow at 10%-20% in the next few years. Future LED display profit growth will mainly come from traditional inkjet, neon, billboard replacement market, as well as high-definition, high-definition LED display market such as HD, 3D and intelligent.
According to industry insiders, a small number of small and medium-sized LED display companies will be eliminated from the market in the next year or two. Strong financial strength, leading companies, especially listed companies, will develop rapidly.
Backlight business profits ahead
In the LED backlight package, Jufei Optoelectronics (SZ.300303) and G20-LED Summit members--Shuifeng Optoelectronics (SZ.300241) achieved good results in 2012. In particular, Ruifeng Optoelectronics, which cut into the large and medium-sized backlight market, achieved a net profit of 46,896,200 yuan in 2012, a year-on-year increase of 41.48%.
“LED TV backlight business is an important profit growth point last year.†Gong Weibin, chairman of Ruifeng Optoelectronics, said that the company seized the market opportunity of LED TV penetration in 2012, and achieved substantial growth in sales and profits. The company has a leading position in the field of LED TV backlights.
According to statistics from the High-tech LED Industry Research Institute (GLII), the output value of LED backlights in China in 2012 reached 21.8 billion yuan, a year-on-year increase of 28%, exceeding the expectations at the beginning of the year. This is mainly due to the steady growth of the market demand for small-size LED backlights, the rapid increase in the penetration rate of medium- and large-size backlight LEDs, and the increase in the localization rate of devices.
Focusing on small-size backlights, Jufei Optoelectronics also achieved a net profit of 91.026 million yuan in 2012. According to the company's annual report data, the company's LED backlight device realized revenue of 418 million yuan in the report period, an increase of 37.10% over the previous year, accounting for 84.28% of the company's total operating income.
The performance of the second half of this year may change
Despite the general downturn in all aspects of the LED industry chain in 2012, when it comes to the market prospects in 2013, many industry insiders have indicated that the market will gradually stabilize this year and the performance in the second half will be greatly improved.
"This year we will work hard in the field of indoor lighting, strengthen channel construction and brand promotion." Huang Guanzhi said in this year's market performance that with the continuous introduction of national LED favorable policies, product prices are gradually decreasing, and the penetration rate will be Further improve.
GLII believes that with the diversification of LED technology and products and the decline in the price of terminal applications, the market penetration rate of LED products has further increased.
At the same time, LED lighting project construction driven by large-scale urbanization construction, commercial and residential lighting driven by energy-saving benefits will be promoted and developed, and the demand for LED lighting market will begin to be effectively released. At the same time, the downstream demand will be effectively driven by the middle and upper reaches, and the market promotion of the industry development will become more obvious. The performance of LED listed companies is also expected to be improved under this market.
From the end of last year to the beginning of this year, various listed companies have successively shown a "revenue" for one year. Words such as declining performance and poor business performance frequently appear in the 2012 performance forecast of LED listed companies.
Among the upstream enterprises, Nanda Optoelectronics (SZ.300346) released the 2012 annual performance report on February 27, which showed that the total operating income last year was 178 million yuan, down 45.09% year-on-year, and the total profit was 105 million yuan, down 49.59% year-on-year. Dehao Runda (SZ.002005) performance report shows that last year, the company's LED business revenue growth was lower than the company's expectations, operating profit decreased by 81.04% compared with the previous year, total profit, net profit attributable to shareholders of listed companies decreased by 54.01 compared with the previous year. % and 57.14%.
In the middle of the package and downstream lighting and display companies, the days are not good. The net profit attributable to shareholders of listed companies by Hongli Optoelectronics (SZ.300219), Zhouming Technology (SZ.300232) and Lianjian Optoelectronics (SZ.300269) decreased by 30%-40% compared with the same period of last year.
According to the statistics of the High-tech LED Industry Research Institute (GLII), the total output value of China's LED industry in 2012 reached 205.9 billion yuan, a year-on-year increase of 34%. Among them, the output value of LED upstream epitaxial chips, midstream packaging and downstream applications were 7.2 billion yuan, 39.7 billion yuan and 159 billion yuan respectively, up 20%, 24% and 37% respectively.
The market growth rate still maintains a high level, but the speed of capacity expansion of the entire LED industry is far greater than the growth rate of demand, and the resulting price competition has caused the entire LED industry to burst out of chill.
Super 60% corporate profit reduction
Up to now, among the listed LED companies that have released the 2012 performance forecast, more than 60% of the companies' net profit in 2012 showed a downward trend year-on-year. The companies with more profit declines mainly concentrated in the upstream chip, raw materials and ancillary equipment enterprises, and packaged. Corporate profits have also fallen. In the display companies, in addition to positioning the high-end market Alto Electronics, other companies' profits fell by more than 30%.
As far as the operating income of listed companies is concerned, most enterprises can still maintain year-on-year growth. Most of the enterprises that have increased their income in the whole year have not seen a significant increase in net profit. The phenomenon of “increasing income without increasing profits†was particularly good in 2012. prominent.
"This year is mainly because of the fierce competition in the LED industry, and the overcapacity has brought about a significant drop in product prices," said Zhai Zili, deputy director of research at the High-Tech LED Industry Research Institute (GLII).
In 2012, the LED industry experienced a brutal market reshuffle. The over-investment in the upstream epitaxial chip field since 2010 has caused a serious overcapacity in upstream production. The upstream epitaxial chip companies have an average utilization rate of less than 50%.
The gross profit margin of midstream packaging companies also fell further, and the squeeze of profit margins forced more packaging companies to lay down and transform downstream.
In the field of downstream applications, especially in the field of highly competitive display screens, there have been a number of billions of display companies in bankruptcy last year. According to the statistics of the High-tech LED Industry Research Institute (GLII), the average annual price decline of all products in the LED industry chain in 2012 was more than 25%, and the annual average price of LED packaging products fell by more than 40%.
The rapid decline in product prices has further lowered the profitability of enterprises. In addition to the fierce competition in the industry, the market demand for lighting applications has not been fully released, which is also an important reason why LED companies failed to achieve good results in 2012.
"At present, the lighting application field is mainly the main project of engineering projects, especially the outdoor street lights are still dominated by government projects." Huang Guanzhi, vice chairman of Qinshang Optoelectronics, told the reporter of "High-tech LED".
According to the statistical analysis of GLII, in 2012, some domestic LED application markets maintained a relatively fast market growth, especially indoor functional lighting, outdoor functional lighting, special lighting and medium and large size backlight LEDs. The output value growth rate is over 60%.
However, in general, the terminal consumer demand is still not fully released, and the general lighting market penetration rate is still less than 7%. The central and local governments are still the main driving force for the LED lighting project and municipal renovation projects. The orders are mainly concentrated in several listed companies. Companies and large and medium-sized enterprises with resource advantages.
Packaging companies' profits decline faster
Since the beginning of 2012, packaging companies have generally felt that their days are getting worse, prices are falling, and gross profit is declining.
According to GLII statistics, the size of China's LED packaging industry reached 39.7 billion yuan in 2012, an increase of 24% over the 2011 total of 32 billion yuan. In 2012, the number of companies involved in the LED packaging business in mainland China increased from 1,700 in 2011 to 1,750. In 2012, there were more than 200 companies in the field of LED packaging in mainland China, and more than 250 new LED packaging companies.
At present, the LED packaging industry has gone through the era of high gross profit. In 2012, the average price of LED lighting white-light encapsulating devices in mainland China dropped by more than 30%.
From the perspective of packaging companies that have released performance forecasts, the profits of packaged companies generally declined rapidly in 2012, and the profits of some enterprises fell by more than 40%.
“The price of packaged products has dropped rapidly last year, and the gross profit of many products has fallen to the bottom. Now there are new packaging factories emerging, and competition is intensifying,†said Deng Shoutie, vice president and director of Hongli Optoelectronics.
According to GLII data, in the first half of 2012, the output of packaged devices increased by 40%-50% compared with the beginning of the year, and the production capacity increased by 70%. Supply and demand do not match, new entrants increase, especially the universal homogenization of domestic packaging products, is constantly squeezing the original profit space.
Zhou Feng, executive vice president of Jiangsu Wenrun Optoelectronics Co., said that the overall macroeconomic downturn last year also exacerbated the competitive pressure of packaging companies. Coupled with the gradual release of new capacity in the previous two years, the price of components has been falling.
Display company "chill" bursts
In 2011, Shenzhen Duo Duoli and Vision Optoelectronics closed down one after another. In 2012, Haobo Optoelectronics, Daxiangjie Optoelectronics and other LED displays also followed suit. These display companies with revenues of over 100 million are not trapped in the capital chain.
According to GLII data, the LED output is the slowest growth in the LED application field in 2012. As the industry has entered the competition elimination period, the price has dropped significantly. The annual output value is only 24.1 billion yuan, a year-on-year increase of 10%.
Disorderly competition and low-price grabbing have become a major feature of the LED display industry in 2012. Due to the low barriers to entry in the display industry, coupled with the rapid increase in the number of companies in the display industry in the past two years, there have been many situations in which there has been a lot of porridge, followed by the collapse of prices and low-cost grabs. Many companies do not hesitate to push down prices in order to compete for the market, while reducing the proportion of down payment. In the craziest time, some companies only need customers to pay 15% to 20% down payment.
According to the internal staff of Shenzhen Big Eye Optoelectronics Co., Ltd., which was involved in the bankruptcy storm, the company seized market share through low price and low down payment ratio during the period of rapid development, resulting in a continuous decline in gross profit margin, and most of the later payments were not normal. The recovery directly led to the break of the company's capital chain.
"At present, the gross profit of the LED display distribution channel has dropped to 10%, and the engineering channel can still be maintained at more than 20%." Feng Jinsong, vice president of Shenzhen Hengguan Technology Co., Ltd. told the "High-tech LED" reporter.
Based on the high-end market, Alto Electronics is unique in the sluggish display industry. In 2012, the company's net profit increased by 30%-60%.
Alto Electronics' secretarial office staff said that Alto Electronics has completed large-scale LED video display projects such as Euro 2012 and New York Times Square in the high-end display field, and has deep cooperation with domestic banks and telecom customers. The gross profit margin of the company's LED video display system, LED information release and indication system and electronic receipt system remained stable at 45.52%, 38.12% and 40.20% respectively.
The High-Tech LED Industry Research Institute (GLII) expects that the LED display market will grow at 10%-20% in the next few years. Future LED display profit growth will mainly come from traditional inkjet, neon, billboard replacement market, as well as high-definition, high-definition LED display market such as HD, 3D and intelligent.
According to industry insiders, a small number of small and medium-sized LED display companies will be eliminated from the market in the next year or two. Strong financial strength, leading companies, especially listed companies, will develop rapidly.
Backlight business profits ahead
In the LED backlight package, Jufei Optoelectronics (SZ.300303) and G20-LED Summit members--Shuifeng Optoelectronics (SZ.300241) achieved good results in 2012. In particular, Ruifeng Optoelectronics, which cut into the large and medium-sized backlight market, achieved a net profit of 46,896,200 yuan in 2012, a year-on-year increase of 41.48%.
“LED TV backlight business is an important profit growth point last year.†Gong Weibin, chairman of Ruifeng Optoelectronics, said that the company seized the market opportunity of LED TV penetration in 2012, and achieved substantial growth in sales and profits. The company has a leading position in the field of LED TV backlights.
According to statistics from the High-tech LED Industry Research Institute (GLII), the output value of LED backlights in China in 2012 reached 21.8 billion yuan, a year-on-year increase of 28%, exceeding the expectations at the beginning of the year. This is mainly due to the steady growth of the market demand for small-size LED backlights, the rapid increase in the penetration rate of medium- and large-size backlight LEDs, and the increase in the localization rate of devices.
Focusing on small-size backlights, Jufei Optoelectronics also achieved a net profit of 91.026 million yuan in 2012. According to the company's annual report data, the company's LED backlight device realized revenue of 418 million yuan in the report period, an increase of 37.10% over the previous year, accounting for 84.28% of the company's total operating income.
The performance of the second half of this year may change
Despite the general downturn in all aspects of the LED industry chain in 2012, when it comes to the market prospects in 2013, many industry insiders have indicated that the market will gradually stabilize this year and the performance in the second half will be greatly improved.
"This year we will work hard in the field of indoor lighting, strengthen channel construction and brand promotion." Huang Guanzhi said in this year's market performance that with the continuous introduction of national LED favorable policies, product prices are gradually decreasing, and the penetration rate will be Further improve.
GLII believes that with the diversification of LED technology and products and the decline in the price of terminal applications, the market penetration rate of LED products has further increased.
At the same time, LED lighting project construction driven by large-scale urbanization construction, commercial and residential lighting driven by energy-saving benefits will be promoted and developed, and the demand for LED lighting market will begin to be effectively released. At the same time, the downstream demand will be effectively driven by the middle and upper reaches, and the market promotion of the industry development will become more obvious. The performance of LED listed companies is also expected to be improved under this market.
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