In the face of overcapacity and gross profit, Sanan and Dehao fight "fast"

The LED industry currently has a similar dilemma of the photovoltaic industry, that is, overcapacity, although the difficulty is not as exaggerated as photovoltaic. Wuhu has concentrated on the production bases of the two giants in the LED industry: Sanan Optoelectronics and Dehao Runda.

"The relevant central departments and cities that use LED as a key industry should help release the market demand for LEDs. Otherwise, domestic production capacity will be released overseas, which may lead to anti-dumping, like photovoltaics." Wang Haolei, Chairman of Dehao Runda, interviewed reporters in Wuhu When said.

Industry waiting for digestion capacity
Wang Donglei appeared in front of the reporter the day before, still in Dalian. Dehao Runda has three bases in Dalian, Yangzhou and Wuhu. It originally planned to invest 12 billion yuan and 200 MOCVD (key equipment for LED epitaxial chips). Now the entire investment plan has been revised downward.

What makes Wang Donglei correct the plan is the rapid expansion of the LED industry. When Dehao Runda entered the LED industry in 2009, the industry's gross profit margin was high. Now Dehao Run has reached the industry's biggest wrist, but also faces the situation of overcapacity in the entire industry.

LED overcapacity is the last two years. As a branch of the semiconductor industry, LED was not a big industry before, and it is mainly used in small-sized mobile phone backlights. In 2009, it was a watershed. Samsung pushed LEDs into the TV backlight field. Each TV consumed hundreds of LEDs, and the sales of hundreds of millions of LCD TVs a year caused the LED market to break out. The number of MOCVD is growing rapidly. In 2011, half of the world's MOCVD equipment was sold to China. But the market is not expected to grow so fast. There are many domestic LED companies, most of which are concentrated in the packaging field downstream of the industry. This year, there are more than 1,700 LED packaging companies with mass production scale, accounting for 80% of the world.

At present, the operating rate of LED chips in Dehao Runda Wuhu base is about 50%, which can be regarded as Wang Donglei's move to avoid excessive killing in the industry. “Sanan Optoelectronics (Wuhu Base) has been put into production rapidly in 6 months, which has reduced the market price of chips by 20%. If Dehao Runda is also full of horsepower, it is not surprising that the market price will fall by 20%.” In Wang Donglei’s view, the industry Slowing down the MOCVD arrival speed under the predicament can reduce production losses and wait for the industry to pick up.

The timing of the industry warming pointed by Wang Donglei is roughly 2014. "After 24 months, how high will the LED chips be? Some people will line up to order."

Still cold next year
Wang Donglei said that Sanan Optoelectronics has been rapidly put into operation in six months, which is a successful case of investment attraction in Wuhu. Sanan Optoelectronics has been a leading LED chip industry in China in recent years, and its chip production base is mainly in Xiamen. Shortly after the introduction of the Lancang Plan, Sanan Optoelectronics opened China's largest LED optoelectronic industrialization project in the Wuhu Economic and Technological Development Zone.

The LED projects of Sanan Optoelectronics and Dehao Runda are all in the Wuhu Economic Development Zone, but separated by more than 10 kilometers. “The Wuhu base has been fully commissioned and is now fully loaded.” In the office building of the Economic Development Zone, Sanan Optoelectronics Chairman Jin Hongzhu accepted an interview with the Securities Times: “The whole 2013 is the winter of the LED industry. This round of adjustment will show the horse. Too much effect, many small factories may be closed, and there will be less than 10 big factories in the upstream after shuffling."

In the view of Yan Hongzhu, the cruelty of the upstream chip industry may be lighter than that of the downstream application industry. From the perspective of new capacity, blind expansion has been rare. The downstream competition is more intense. In November this year, Haobo Optoelectronics Co., Ltd., a billion-dollar LED enterprise in Shenzhen, was exposed to wage arrears and was appraised by employees. Haobo Optoelectronics has just been rated as “Shenzhen Famous Brand” this year, mainly LED display, this year砸Money also invested in LED lighting, and as a result, a lighting project was not obtained.

“95% of the domestic LED lighting market is a government order.” Industry insiders said. Judging from the public information, government orders are basically the first month of the near-water platform. Sanan Optoelectronics is headquartered in Xiamen and has projects in Huainan City. The LED street light orders of these two cities have fallen into Sanan Optoelectronics; Dehao Runda is headquartered in Zhuhai, and at the end of November, it also announced the acquisition of Zhuhai 30,000 LED street light projects. Wuhu also gathered two giants of Sanan Optoelectronics and Dehao Runda, so the orders for LED streetlight projects in Wuhu were equally divided.

In the first three quarters, only 7 of the 20 LED listed companies in the A-share market grew, and the leading company Sanan Optoelectronics remained profitable, but the 14% net profit growth rate decreased compared with the same period last year. Reshuffle next year to dump at least half of the company, this is the judgment of the LED industry during this period of time.

Will it be the next PV?
Dehao Runda believes that the photovoltaic industry will not fall into the same dilemma as photovoltaics. Chairman Wang Donglei is worried about overseas anti-dumping, but at the same time he believes that the use of photovoltaics is too dependent on government subsidies, and the LED optoelectronic industry will be market-driven in terms of consumption. For example, LED lighting will account for 70% of official and commercial lighting. Household accounts for 30%. In Wang Donglei's view, the main difficulty of the LED industry is that the production capacity is too fast, and the big start of market demand will have to wait another 24 months. Wang Donglei believes that Dehao Runda has a latecomer advantage: "We are very mature when we are involved in the LED industry. But I decided to go to the 4-inch production line and it took a lot of effort to debug the furnace, but the production cost is 15% to 20% lower. ."

Sanan Optoelectronics also believes that the photovoltaic industry will not fall into the same dilemma as photovoltaics. Director Wei Hongzhu said that the national LED market bidding has been launched, which has a market of billions of dollars per year. It is expected that the global economy will also pick up in 2014, market demand will be released, and research institutions will judge that there will be 500 billion markets for lighting alone. 100 billion. "Photovoltaic is mainly anti-dumping, the domestic market can not digest, the industry quickly entered a trough. The LED industry organization first communicates between the upstream and downstream enterprises to share the winter, and the second is to actively help enterprises, especially downstream application companies, to deal with overseas litigation, such as In case of anti-dumping, he responded positively.” Yan Hongzhu said, “The industry reshuffle will be in the first half of 2014. Next year may be the winter of the industry, but it is an opportunity year for Sanan Optoelectronics. It is better to adjust the product structure and accelerate the gathering of talents. Recruiting top talents.” Sanan Optoelectronics is now mainly competing with international giants, and its product indicators are not lost to Taiwan Jingdian (the largest LED company in Taiwan). In fact, the layout of Sanan Optoelectronics is unfolding. In November, Sanan Optoelectronics entered the top three shareholders of Taiwan's LED industry with cash and became the largest shareholder.

LED boom and real estate hook?

The third quarter report shows that the growth rate of the first three quarters of Dehao Runda fell sharply year-on-year. “This year is the stage of burning money, debugging MOCVD furnaces and accelerating the development of new products.” Wang Donglei said that the slow subsidy of government subsidies is also the reason why the financial statements are ugly.

This year's local finances were tighter than last year, mainly due to the impact of real estate regulation and control, and the local government's land sales revenue was greatly reduced. The local finance and LED industry boom are not only linked to financial subsidies, but also government orders. It is reported that not only the location of the production project, Dehao Runda has signed a framework agreement for LED streetlight projects in a number of cities, the total amount is large; but in the workshop, it can be seen that the lighting production line of Dehao Runda is not full of horsepower. In the workshop for testing LED street lights, the person in charge of the workshop told the reporter that the inspection products on one wall were less than 1/4 of the full load.

"LED street lights take more orders but don't dare to go too fast, afraid of affecting cash flow." Wang Donglei said. Government orders tend to be slower, and in the winter of the LED industry, Wang Donglei believes in cash as the king. If it is only a slow return, perhaps Wang Donglei is not so scrupulous, he is also worried about bad debts. Wang Donglei's observation point is whether the real estate market is warming up, and second, it is expected to start the LED lighting market in office buildings and shopping malls next year.

LED lamps are much more expensive than energy-saving lamps and incandescent lamps, and each ex-factory price exceeds 30 yuan. Wang Donglei said that the commercial lighting market will be launched mainly based on three points: First, due to technological advancement, the cost of LED lights will continue to decrease, prices will continue to decline, and second, longevity, "I can save 5 years, broken within 5 years. Change to you"; the third is to save electricity, according to the daily light for 12 hours, the provincial electricity bill is expected to be equivalent to the price of the lamp in one year.

Although the big start of market demand and the original assumption are delayed, Wang Donglei is still passionate about the future of the industry: "TV LEDs are becoming more and more popular. When 70% of TVs use LEDs, all MOCVD furnaces in the world are not enough. The lighting market The start of the market will increase the market demand by more than 10 times."

Whether it is Wang Donglei or Qi Hongzhu, they are all faster than the "fast" R&D, the new product launch speed is fast, then the gross profit is high; the mainland goods are not only the excess capacity, but also the gross profit that keeps falling. What Sanan Optoelectronics and Dehao Runda want to do is to grow bigger in the cold winter and lead the technology, waiting for the dawn of 2014.

(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)

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