LED companies continue to slump in the first half of the second half of the policy dividend will gradually appear

Affected by unfavorable factors such as overcapacity and falling prices, the performance of domestic LED listed companies in the first half of the year was sluggish, and nearly 60% of the company's performance showed negative growth.

Experts believe that it is expected that the overcapacity situation in the LED industry will continue for some time to come. Pressure on product prices will continue to be high. However, with the implementation of LED-related industrial policies of the national and local governments in the second half of the year, the policy dividend will gradually appear, and it is expected to have a positive impact on the performance of related listed companies.

Increment does not increase profits LED company continued to slump in the first half

From the second half of 2011, the domestic LED industry began to gradually reduce orders, prices fell sharply, increase production does not increase revenue. In the first half of this year, the market downturn was further aggravated.

According to Wind statistics, among the 20 LED companies in Shenwan, only 8 companies had positive growth in net profit in the first half of the year, and 12 LED companies had negative growth. This is also the worst performance of listed companies in the domestic LED industry since 2010.

Increasing income does not increase profits to become a "common problem" for many LED companies in the first half of this year. Take Sanan Optoelectronics, the largest LED chip company in the country, as an example. In the first half of the year, the company achieved revenue of 1.371 billion yuan, an increase of 90.53% over the same period last year; net profit of 466 million yuan, an increase of 1.55% over the same period of last year. The company's LED product operating margin was 27.24%. The year-on-year decline was 19%.

According to statistics, in the first half of this year, the profitability of the domestic LED industry declined. The gross margin of the industry sales was 28.67%, which was lower than the 29.48% and 31.89% of the same period of last year and the same period of last year.

At the same time, the number of days of inventory turnover for LED companies has been significantly extended. Wind statistics show that the SWT LED industry's inventory turnover days in the middle of this year is 156.6 days, which is higher than 130.14 days in the same period in 2011, and 114.26 days in 2010.

From an investment point of view, since the beginning of this year, the domestic investment in the LED industry has also begun to cool rapidly, especially in the field of upstream sapphire and epitaxial chips, is no longer a hot investment. According to the statistics of China National Engineering Research Institute for Advanced Industrial Devices, the investment in the new projects for the upstream sapphire and epitaxial wafers in the first half of 2012 was 10.4 billion yuan, a decrease of nearly 90% from the same period last year.

It is worth noting that due to the downturn in the market, many small and medium-sized LED companies have bankrupted or been liquidated this year. In January of this year, Shenzhen Deshida Optoelectronics Co., Ltd. appeared in the “Run Road” incident. In July, Shenzhen Yuanda LED display company Shenzhen Vision Optoelectronics Co., Ltd. declared bankruptcy, which cast a shadow on the domestic LED industry.

The overcapacity of internal and external difficulties has become an obstacle to industrial development.

Zhang Xiaofei, director of the LED Industry Research Institute of Gaogong, believes that the reasons for the unsatisfactory revenue and net profit of domestic LED listed companies in the first half of this year are mainly due to the poor export; on the other hand, the industry is still in excess capacity. State, product prices do not rise and fall.

Research institute LEDinside recently released a report showing that under the influence of the debt crisis in Europe, lighting markets in major regions of the world were affected in varying degrees in 2012, and orders from export-oriented LED manufacturers in China generally fell, especially European lighting. Market buying is significantly lower than in other regions.

In China, due to LED investment in the past two years, LED upstream manufacturing has become the focus of domestic deployment. All over the world has announced that they have spent huge sums of money to purchase MOCVD (LED epitaxial wafer growth equipment) equipment. Mainland China has also become the fastest growing LED production capacity in the world. area. However, with the successive release of new upstream production capacity, downstream LED application demand has not risen as expected, causing serious overcapacity. LED products have always been in the backlight, landscape lights, street lamps and other fields, failed to really break into the huge market space for general lighting.

According to industry statistics, since the beginning of the year, the prices of sapphire substrates and LED chips have dropped continuously, and the average decline rate has exceeded 20% in the first 7 months. At the upstream end of the LED industry, the project production capacity of sapphire substrates under construction amounts to 10 million pieces per year, while China’s current actual demand is only 6.85 million pieces, which is still less than 1/10 of the production capacity. Due to a serious overcapacity, the price of LED chips drastically dipped. A few years ago, the price of LED chips was as high as 20 yuan/watt, which has now been reduced to 3-5 yuan/watt, and even "LED chips have reached the point of selling."

National Semiconductor Lighting Engineering R & D and Industry Union Deputy Secretary-General Li Jun said recently that LED upstream manufacturers have some excess capacity, while the midstream and downstream application market is not as good as expected, leading to the continued decline in the price of LED products, some small and medium-sized LED companies face the plight of survival.

In the eyes of experts, the current state of technology and price level of China's LED industry are still not suitable, especially the price level can not be accepted by the majority of individual consumers, LED applications or engineering lighting, combined with traditional lighting Still far from being in place.

Qi Faxin, a senior analyst at SEMI China's LED industry, believes that the domestic LED industry has developed from the previous high expectations to overcapacity, and it has triggered a large-scale price war in the past two years. However, the price war is not a long-term solution. Some small and medium-sized manufacturers that lack capital and technological advantages may not be able to cope for too long.

The policy dividend will gradually show that it will help lift the performance in the second half of the year.

As one of the strategic emerging industries, the LED industry has been favored for its advantages of energy saving and environmental protection, and it has broad development space in China. In 2011, the penetration rate of China's LED lighting market was only 1.0%, and it is expected to reach 3.9% this year. In the next few years, the market penetration rate of LED lighting will increase linearly, and it is expected to reach 29.5% in 2015, accounting for nearly one-third of the entire lighting market.

On May 16, Premier Wen Jiabao of the State Council presided over the State Council Executive Meeting to determine the policies and measures for promoting the consumption of energy-saving home appliances and other products. Among them, RMB 2.2 billion will be allocated to support the promotion of energy-saving lamps and LED lamps.

On August 24th, China National Electronics Import and Export Corporation announced the “2012/2013 result of financial subsidy promotion for semi-conductor lighting products”, including a total of 10 LED listed companies including Chau Ming Technology, Qinshang Optoelectronics, and National Star Optoelectronics. Products are selected.

As this subsidy directly subsidizes the successful bidder, it will have a positive impact on the performance of the relevant listed company, but the extent of the impact will depend on the number and amount of promotion of the relevant company. The successful bidder is expected to use the financial subsidies to further open the market, through the penetration rate of the terminal market to open up a larger seaport for the LED industry, to ease the current phase of the industrial surplus.

In addition, according to the regulations of the National Development and Reform Commission, incandescent lamps of 100 watts or more are banned from October 1, 2012. With the gradual phase-out of incandescent light products and the further introduction and implementation of relevant LED lighting industry support policies, the industry generally believes that now is the critical period for the transition from traditional lighting to LED lighting, and LED lighting will face more rapid development.

High prices have been one of the major obstacles to the popularity of LED lighting. However, with the continuous improvement of technology, and the continuous decline in the price of upstream light sources, LED lighting prices have also begun to accelerate decline, getting closer to the critical point of market expectations. Gaogong LED survey data show that in the first half of 2012, the average price of LED bulbs in China fell by more than 8%. Shangyu Lighting (China) Co., Ltd. announced in June this year that it will introduce three LED lighting products worth 100 yuan for the first time in the country, and this price will drop by nearly 50% compared with similar products on the market.

Gaogong LED believes that the next step will be to increase the transfer of traditional lighting to LED lighting. Thanks to policy assistance, the domestic LED industry is expected to achieve 20-30% growth throughout the year. However, domestic LED chip listed companies will continue to face downward pressure on prices in the second half of the year. Product competition caused by falling prices, especially the pressure of sales channels, will continue to increase. Industry leaders with scale and brand advantages will remain in the long term. Competitive Advantage.