Market space shrinks, mergers and acquisitions, bankruptcies, LED industry reshuffle intensified
Recently, LED listed companies have announced their performance forecasts for the first half of 2017, and the performance of many LED companies has risen steadily. While the LED industry is improving as a whole, the market space is shrinking, and industry competition is becoming increasingly fierce. Since 2017, LED industry mergers and acquisitions have continued one after another, bankruptcies have continued, and industry reshuffle has intensified.
The wave of mergers and acquisitions one after another
At present, the LED industry has entered the era of meager profit. In the context of excessive market competition and overcapacity, the integration of the LED industry has accelerated and mergers and acquisitions have been frequent. Mergers and acquisitions, as a simple and fast development path, have been praised by many LED companies. Through mergers and acquisitions, some companies are expanding vertically and deploying the entire LED industry chain; some companies are extending horizontally and going abroad to the world; some companies are trying new areas and exploring different development paths.
Since 2017, the LED industry has undergone continuous mergers and acquisitions. According to incomplete statistics, there have been more than 30 integrated mergers and acquisitions in the LED field. Cases of mergers and acquisitions are constantly being staged, and the forms of mergers and acquisitions are diversified. In addition to the integration and mergers of the upstream and downstream of the LED industry chain, it has also continuously extended its tentacles to other fields such as education, media, and the Internet.
On July 26, Unilumin Technology intends to acquire a 60% stake in Aijia Lighting; On August 15, Unilumin Technology intends to acquire 60% equity of Tsinghua Kangli; On August 16, Unilumin Technology repurchases Hangzhou Bainian 26. 68% of the shares; September 04, it plans to purchase 100% of the shares of Xihe Optoelectronics. In order to accelerate the company's expansion in the LED lighting business, Unilumin Technology has carried out a series of acquisitions.
In addition, LED companies such as Mulinsen, HC Semitek, Feilo Acoustics, etc. have also leveraged overseas mergers and acquisitions to promote strength growth and enter the international market.
Chart 1: LED industry mergers and acquisitions since 2017
The wave of bankruptcies continues
Entering 2017, the overall LED market is improving, and many LED companies have grown stronger. However, there are also some LED companies that are not optimistic. Some are gradually divesting their LED business, and some are directly going bankrupt.
In early 2017, Ford's legal representative Wang Gongjie issued Ford's bankruptcy liquidation statement, and Ford's became the first LED lighting company to go bankrupt in 2017. Ford Lighting was founded in 2004. It is mainly engaged in high-quality energy-saving lamps such as LED bulbs, LED patch strips, LED downlights, LED panel lights, LED floodlights, etc. Its sales network covers Europe, Asia Pacific, Middle East and Africa. , North America and South America and more than 90 countries and regions around the world. Prior to this, Ford also invited actor-level figure Liu Qingyun as the image spokesperson to build its own brand image. The most direct cause of Ford's bankruptcy was the rupture of the capital chain caused by the triangular debt problem.
Some companies are also gradually divesting their LED business. For example, Duo-Fluoride plans to transfer its LED lighting subsidiary; Kingshang shares nearly 2 billion net assets in the rotor company for free; Guangdong Ganhua has officially abandoned its LED business with losses for consecutive years. For a group of companies whose original LED business is small in scale and in low or even negative growth, the divestiture of the LED business has become a reluctant choice.
Chart 2: The LED industry's divestiture and bankruptcy since 2017
The growth rate slows down and the shuffle is intensified
Statistics show that in 2016, the overall output value of my country’s LED industry reached 521.6 billion yuan, a year-on-year increase of 22.8%, which was a drop from the 30% average annual growth rate during the "Twelfth Five-Year Plan" period. Among them, the scale of upstream epitaxial chips was about 18.2 billion yuan, a year-on-year increase of 20%; the scale of midstream packaging reached 74.8 billion yuan, a year-on-year increase of 21.5%; the scale of downstream applications was 428.6 billion yuan, a year-on-year increase of 23%.
Chart 3: The scale and proportion of each link of the LED industry in 2016 (unit: 100 million yuan, %)
As the tide of corporate mergers and bankruptcies continues to deepen, the LED industry has intensified its reshuffle. Many companies are submerged in the wave of industrial development, which is bound to have a certain impact on the LED industry; but on the other hand, the gradual decrease in the number of companies is also the inevitable result of the survival of the fittest in the competition. After multiple rounds of industry reshuffle, the LED industry will further optimize and upgrade.
In the eyes of industry insiders, industry reshuffle is a normal development trend, and any industry must go through a process of brutal growth and optimization and upgrading. Mergers and reorganizations will be the norm, and torrential retreats can also be regarded as wise men.
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