LED listed companies have mixed results in the third quarter. M&A is still a hot spot.

Following the three quarterly reports and the large number of disclosures of performance forecasts, the LED industry situation has also clearly emerged: of the 13 companies that have announced their performance forecasts, seven have increased their performance and six have declined; industry competition has intensified and gross profit margins have fallen. The megatrend, and the expansion of business scope through mergers and acquisitions is the main form of many companies' increased performance. Analysts suggest that the lighting industry will enter the peak season in the fourth quarter. It is estimated that the cost of LED lighting products will tend to remain unchanged, and the market share will be further concentrated in the industry. As a result, mergers and acquisitions are still the hot spot and highlight of the industry.

Gross profit margin falls to normal

In reference to the reasons for the decline in the third quarter results, six LED companies such as Wanrun Technology, Ganzhao Optoelectronics, Huacan Optoelectronics, Jufei Optoelectronics, Nanda Optoelectronics, and Foshan Lighting, which have announced the performance forecast, are all attributed to the “strong market competition”. The company’s product sales costs have fallen and gross margins have fallen.”

“Although the company’s sales in the third quarter increased year-on-year, and the acquisition of Sunshine Optoelectronics was included in the consolidation range in June, but due to market competition factors, the company’s product sales price decreased, the third quarter gross profit margin declined, and the sales revenue increased. Arrived in anticipation.” Wanrun Technology explained the reasons for the decline in the third quarter. Wanrun Technology's performance forecast shows that the company's net profit for the first three quarters of this year was 28,996,700 yuan to 34,113,800 yuan, down 0% to 15% year-on-year.

The performance of companies that did not have M&A expansion declined more. In addition to the “declining gross margin”, exchange rate changes and increased R&D investment were also reasons for the decline in performance.

Although the gross profit margin has dropped, but with the arrival of the fourth quarter shipment season, the LED industry is still worth looking forward to. Dongxing Securities Research Institute believes that with the slow elimination of the production capacity of the company, the cost of LED lighting products will gradually become unchanged, and the market share will also be concentrated in the industry, and it is suggestive that Sanan Optoelectronics, Hongli Optoelectronics, Liard, Sunshine Lighting, etc.

M&A integration is an industry trend

Although the gross profit margin has declined widely, but in the LED industry chain companies that announced the performance forecast, there are still more than half of the performance increase, and most of the performance has doubled. According to the statistics of the reporters, 7 companies in the industry have announced the pre-announcement of performance, in which the third quarter results of Weiwei shares increased by 146.28% to 175.07%, and the performance of Zhouming Technology in the third quarter increased by 125% to 147%. Performance is expected to increase by 103.39% to 111.51%, and Liard's estimated performance is increased by 90% to 110%.

On the whole, the expansion of the consolidation of the industry chain and cross-industry mergers and acquisitions is the main reason for the increase in the performance of the above companies. For example, Lianjian Optoelectronics hinted that its acquisition of Sichuan Timeshare Advertising Media Co., Ltd. was included in the consolidation scope in May, Shanghai Youtuo Public Relations Staff Co., Ltd. and Shenzhen Yishida Electronics Co., Ltd. Performance; Liard suggests that Lifeng culture has been consolidated into the consolidated statements since July, and Jin Lixiang has been consolidated into the consolidated statements since August. In addition, Shenzhen Kang Mingsheng Technology Industrial Co., Ltd. acquired by Changfang Lighting has consolidated its position in April. The increase in the performance of Weiwei Co., Ltd. came from its acquisition of Jiangsu Huayuan New Energy Technology Co., Ltd.

"The merger and integration of the LED industry will maintain a high fever situation for some time to come," one industry insider suggested.

According to incomplete statistics, Wanrun Technology, Lianjian Optoelectronics, Liard, Weiwei, Dehao Runda, Qinshang Optoelectronics and other six LED industry chain companies are all suspended. In addition, several other companies have announced plans for mergers and acquisitions.

Analysts have hinted that following the decline in the gross profit of the LED industry, bid farewell to barbaric development, and the consolidation of mergers and acquisitions in the industry has intensified, which is conducive to the improvement of industry concentration, and is also an excellent development and expansion opportunity for leading companies with craftsmanship and scope. .

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