How to survive in the "barbaric" LED lighting market?

"At present, LED lighting is in a barbaric era." This is a sigh of Hao Jun, the director of Wanrun Technology. He also said that the LED lighting market is in the current situation. There is no threshold in the industry, there are many brands, and the price war is fierce. The most intuitive consequence is that profits are shrinking. Wanrun Technology's net profit fell 9.1% year-on-year last year, and fell 76.87% year-on-year in the first quarter of this year. How to survive in the "barbaric" LED lighting market? Recently, the reporter interviewed Wanrun Technology exclusively.

Do not sell the "personality" of civil lighting

In the capital market, there are many LED lighting listed companies. Hong Kong stocks have NVC lighting, A-shares have long-party lighting, and Qinshang Optoelectronics, but Wanrun Technology is considered to be a "heterogeneous". The company currently focuses on commercial lighting and municipal lighting. “There are no standards in the civilian sector, and everyone is fighting for the price,” said Hao Jun, director of Wanrun Technology. “Our products are mainly in the high-end, and there is no advantage in doing civilian use.” Because of the insistence on walking in commercial and municipal lighting On the road, the gross profit margin of Wanrun Technology's LED lighting business is as high as 37.95%, while the gross profit margin of other listed companies' LED lighting is about 20%.

Money hungry business according to EMC model <br> <br> do not have commercial lighting price war, but also have a higher quality requirements. Due to the characteristics of the mall, a dozen hours of long lighting time is its biggest feature. Wanrun Technology does commercial lighting, and part of it is EMC (contract energy management) mode, which is free installation, and then share the benefits of energy saving. For the mall to replace LED lighting, you don't have to give money to save energy and save money, it is a very profitable thing. However, for Wanrun Technology, the initial investment is a huge expense. Some of the 710 million yuan that has just been added has been used to quench the thirst.

"EMC contract energy management, from the current market development point of view is relatively fast, is also a more important part of Wanrun lighting," Hao Jun also admitted that the EMC model is also very large, but it is also the company's development direction in the next few years. .

Look for segments subject of mergers and acquisitions to expand the scale of <br> <br> fact, whether it is commercial lighting or Man Chiu, LED lighting biggest worry is the industry concentration is very low. How to rapidly expand the scale and improve brand competitiveness among thousands of companies is the appeal of every LED lighting company. Wanrun Technology is no exception, and the expansion of the company is looking for a more subdivided target company in the field of business photography.

In August last year, Wanrun Technology announced that it would raise 710 million yuan at a price of 10.76 yuan per share. In addition to supplementing working capital, the other half of the fund of 390 million yuan was spent on the acquisition of the company. Sunshine Optoelectronics Co., Ltd. is a company that makes LED advertising logo lighting, mainly for billboards. Do not look at the market segmentation, there are also 10 billion scale, the market share of the company is less than 10%, but it is already the leader in the field. Wanrun Technology believes that the synergy effect after the cooperation between the two parties is even greater. “Shenzhen Optoelectronics has accumulated a lot of customers in the field of advertising signs, and they are often interested in indoor lighting.” Hao Jun said that indoor lighting is a company strength and can accumulate potential. Customers, "on the other hand, can also digest the capacity of our packaging."

Next, Wanrun Technology will also look for “a company that is leading the market or technically” along the business segment.

The new industrial park to expand the production capacity of 3-5 times <br> <br> At present, in Shenzhen Mason Technologies has got Shirble Department Store, SF, Redstar and other orders. “The current replacement rate of Shangzhao and Shizhao is accelerating, not only energy conservation and environmental protection demand, but also the country’s subsidy policy.” Hao Jun judged that the replacement of commercial photos should have an annual growth rate of 30% to 40%. “According to us In the next two years of planning, the lighting business should be able to maintain 40% to 50%."

In terms of production capacity, the company's Dongguan Songshan Lake Industrial Park was put into use at the end of 2013 and the beginning of last year. In particular, the lighting production capacity has expanded significantly. “Lighting can be tripled or even tripled compared to the original capacity.”

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