[China Securities Network] LED industry competition is fierce and mergers into a development trend

Recently, the 2014 High-tech LED Annual Conference was held in Dongguan, attracting many companies from the industry to participate. Zhang Xiaofei, president of Gaogong LED, said that the next three years is a very crucial golden time for the industry, but this golden time means that the competition in the whole industry is not only fierce, but even more fierce.

According to the forecast of the High-tech LED Industry Research Institute (GLII), the total output value of China's LED industry will reach 34.45 billion yuan in 2014, a year-on-year increase of 31%. Among them, the output value of LED upstream epitaxial chips, midstream packaging and downstream applications were 12 billion yuan, 56.8 billion yuan and 275.7 billion yuan respectively, up 43%, 20% and 32% respectively.

According to industry insiders, although the LED industry as a whole has a good growth and the future space is very large, due to the low threshold and fierce competition, many companies in the industry have relatively weak profitability. Currently, there are about ten companies in the industry that are on the verge of bankruptcy.

“The whole industry has a trend of mergers and acquisitions. M&A in the future is a normal state.” Zhang Xiaofei said that listed companies are basically doing mergers and acquisitions, especially in lighting applications companies that acquire traditional enterprises with channels. Mergers and acquisitions. At present, the number of mergers and acquisitions in the entire industry has exceeded one hundred, and the amount of mergers and acquisitions has exceeded 10 billion yuan, equivalent to an average of 100 million yuan for a merger.

Zhang Xiaofei introduced that some of the early LED companies in the last round of financing, even in the penultimate price, have now sold. If the lighting companies that were financed in previous years, the valuation was very high. If the acquisition is now ten times, if the purchase price is ten times the profit, the price of the company that is actually sold now is very low.

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