LED lighting industry sales improvement policy in the third quarter to help commercial speed

With the popularization of the concept of environmental protection and energy conservation, the decline in the price of LED lighting, and the assistance of policies, LED lighting has accelerated its penetration in the domestic commercial market. However, the macroeconomic downturn, overcapacity, and rapid price fall have also eroded the profits of LED companies. From the third quarter report, although the performance has recovered, but the LED industry is still in the low adjustment period.

LED listed company performance differentiation

According to the GLII statistics, among the 25 listed LED companies, there were 15 revenue growth in the third quarter compared with the same period of last year, accounting for 60% of the total, which was a decrease of 10.83% compared to the first half of the year; the net profit increased by 10% year-on-year. Home, which accounts for 40% of the total, is in line with the situation in the first half of the year.

GLII believes that the improvement in the sales of LED key listed companies in the third quarter is partly due to the LED sales season in the second half of the year and benefits from the LED and energy-saving lighting projects of the national and local governments. On the other hand, LED technology and products are diverse. The development of the development and the decline in the price of terminal application products have led to an increase in the market share of LED products. However, the performance data of most LED listed companies in the third quarter did not materially improve. To achieve this change, or to further release the needs of the downstream market.

The performance of LED companies in different subdivided areas has diverged, and LED backlighting companies have shown a good trend; LED lighting companies have remained basically the same; LED display companies have had difficulties in doing business; LED chip plants have experienced an increase in performance of Sanan Optoelectronics (600703.SH), while others have fallen.

Ruifeng Optoelectronics (300241.SZ) benefited from the popularity of LED-backlit LCD TVs, in which large-size backlight LED sales grew significantly. From January to September of this year, Ruifeng Optoelectronics achieved an operating revenue of 340 million yuan, a year-on-year increase of 54.48%, and a net profit of 36.21 million yuan, a year-on-year increase of 30.47%. In the first quarter of this year, Ruifeng’s net profit fell by more than 50% year-on-year.

Based on LED lighting, Qinshang Optoelectronics (002638.SZ) reported revenue of RMB 590 million from January to September this year, an increase of 8.96% year-on-year, and net profit of RMB 92.22 million, a year-on-year increase of 20.84%. Hongli Optoelectronics (300219.SZ), which is a white LED package with LED lighting, experienced a year-on-year decline in sales in the first three quarters of this year, operating income of 396 million yuan, a slight decrease of 1.7% year-on-year, and net profit of 48.14 million yuan, a year-on-year decrease of 7.67%. Positive growth was achieved in the third quarter, with operating income and net profit rising 6.68% and 2.65% respectively year-on-year.

Zhou Ming Technology (300232.SZ), which mainly produces LED displays, achieved revenue of 410 million yuan in the first three quarters of this year, an increase of 5.72% year-on-year, but net profit decreased by 47.85% year-on-year to 18.33 million yuan.

Upstream LED chip prices fell sharply this year, this Huacan photoelectric (300323.SZ) in the first three quarters of this year's revenue fell 25.74% year-on-year to 259 million yuan; net profit fell 49.1% year-on-year to 42.09 million yuan. However, LED chip leader Sanan Optoelectronics has achieved outstanding performance. In the first three quarters of this year, its operating income was 2.35 billion yuan, an increase of 101.26% year-on-year; net profit was 667 million yuan, a year-on-year increase of 13.9%. However, in the first half of this year, Sanan Optoelectronics received a total of nearly RMB 300 million in subsidies from the government, and the “gold content” of its performance was discounted.

Market-led, government assistance

Zhang Xiaofei, director of the Highgility LED Research Institute, recently analyzed with the "First Financial Daily" that the LED industry is picking up in the third quarter, mainly because the advantages of LED lighting environmental protection and energy saving are increasingly recognized by the market, and LED prices are going down, so LED The utilization rate is improving. From the perspective of the export market, the market situation in Southeast Asia and the United States improved, and the European market remained flat.

Although many subsidy policies for LED lighting have been issued from the central government to the local government this year, Zhang Xiaofei believes that the effect of policy pull is limited. For example, if the national subsidy for energy-saving lighting is 2.2 billion yuan, the amount of funds allocated to individual companies is limited, and the bid winning price is low, the enthusiasm of the enterprises to participate in is affected.

Qin Shuo, vice president of Qinshang Optoelectronics, told the newspaper that the effect of policy pull has begun to appear. This year Guangdong Province introduced a policy that all public lighting applications are planned to be switched to LED lighting products by 2014. In September of this year, Qinshang Optoelectronics received several engineering orders. They originally completed the bidding for traditional lighting and immediately switched to LED lighting after the introduction of the policy.

“The commercial use of LED lighting is really accelerating.” Lei Lining, director and executive deputy general manager of Hongli Optoelectronics, told this newspaper that LED lights have been used in public places such as restaurants, hotels, parking lots and airports. This year, the price of LED chips has fallen by 50% compared with that of last year. The price of LED packaging has dropped by 20%~30% year-on-year. The price drop coupled with policy guidance has accelerated the speed of LED commercial use.

However, the price that fell too quickly also affected the growth rate of income and net profit of LED companies. Leiliening said that Hongli's product sales this year are much higher than last year, but the revenue and net profit in the first three quarters have declined slightly. Moreover, the home market needs to be activated.

A cruel reality is that when LED companies enjoy the rapid expansion of the market dividends, they must also endure the torment of overcapacity and low-price competition. Lei Lining suggested that the key to the government is to play a guiding role in the LED market's popularity. However, when granting subsidies, it is necessary to set a threshold. If everything is exhausted, it is not conducive to the survival of the fittest in the LED industry.

Zhang Xiaofei expects that the LED industry will perform better in the fourth quarter of this year than in the third quarter, but there will be a low tide in the industry at the beginning of next year.