2015 LED display industry annual news inventory

Looking back at 2015, 2015 was an extraordinary year, with too many events worthy of being recorded. On June 29, a series of events at the signing ceremony of the "Asian Infrastructure Investment Bank Agreement" were held in Beijing. The establishment of the AIIB marked the further improvement of China's international influence and marked the beginning of China, the world's second largest economy, to take the initiative to assume more responsibilities as a major country. On July 31, good news came from Kuala Lumpur, Malaysia, that Beijing successfully bid for the Winter Olympics. Since then, Beijing has created a New history, becoming the first city to host both the Summer Olympics and the Winter Olympics; on October 19, the National Bureau of Statistics released data. According to preliminary calculations, my country's gross domestic product (GDP) increased by 6.9% year-on-year in the first three quarters. This is the first time in six years that my country's GDP growth rate has "broken 7", announcing that China's economic growth has entered a new track of medium-low growth like a roller coaster and has entered a new normal. From October 26 to 29, the Fifth Plenary Session of the 18th Central Committee of the Communist Party of China was held in Beijing. The plenary session discussed and adopted the 13th Five-Year Plan, which made plans and pointed out the direction for China’s economic and social development in the next five years (2016-2020). The grand blueprint for China’s economic and social development in the next five years is slowly unfolding in front of us.

Focusing on 2015, when we turn our attention to the entire domestic LED display industry, the three words "extraordinary" are also reflected so vividly.

In January, Leyard acquired Jinlixiang and Lifeng for 890 million, sounding the clarion call for mergers and acquisitions in the LED industry; in February, Radian's star product "Black Onyx" (high-density LED display) received good news. It won the German IF Gold Award in one fell swoop, once again disrupting the industry. It stirred the nerves of the entire international industrial product design community; in February, Absen's star product A1688 advertising screen was officially unveiled at 1500 Broadway Street, Times Square, New York, USA, making Absen instantly famous; in March, the local tycoon Jinshajiang Venture Capital M&A Fund became the Dutch Royal The major shareholder of Lumileds, a subsidiary of Philips, dropped a blockbuster on the international semiconductor lighting industry; in July, the LED industry was exposed to bankruptcy twice, and Zhongxiang Innovation and Light Energy Technology still failed to survive this "cold winter", which is disappointing; 10 In August, the financial reports of the first three quarters of LED listed companies were released one after another. The focus of the industry media quickly turned to the six listed companies of LED display screens. According to statistics, the net profits of five of them declined year-on-year in 2014. Only Unilumin Technology stood out and stood out.

When we look back on this year, our hearts are full of mixed emotions. There is pride and joy, excitement and excitement, but also emotion and anxiety. It is in such a contradictory and complicated mentality that we bid farewell to 2015, a year in which too many stories happened, leaving us full of memories.

To summarize in 2015, there were so many stories happening in the LED display industry that we couldn’t figure it out at the moment. So how to organize, summarize and summarize the news events that happened in the industry this year? If we just pick ten out of the hundreds or thousands of industry news, and regard them as the top ten news of the year in the industry, I am afraid it will be biased. The so-called benevolent people have different views on benevolence and the wise have different opinions, and it is difficult to be convincing and credible. Here, the author intends to use ten keywords to connect the hot news that happened in the industry this year. They are mergers and acquisitions, new normal, innovation, small spacing, cross-border, new opportunities, going global, New Third Board, bankruptcy and layoffs, and brand. "Climbing high to compose a poem is what you hope for in the public. Dare to show your contempt and respectfully spare short quotations." We do not seek perfection, but only hope to bring some inspiration and thinking to readers. This is the general preface.

Mergers, acquisitions and integration

Mergers, acquisitions and integration have become the norm, and industry concentration has further increased

When will mergers and acquisitions end? Can't stop. At the beginning of the new year, in January, Leyard purchased Jin Lixiang and Lifeng for 890 million yuan, kicking off the consolidation of the industry; shortly afterwards, Absen acquired 60% of Westek's shares. In June, Unilumin Technology acquired 40% of the equity of Radioo, achieving 100% control of Radioo; Alto Electronics acquired 100% of the equity of Qianbaihui for 250 million yuan. In October, Lehman acquired Tuoheng. In November, Lianjian Optoelectronics issued another restructuring plan, investing a total of 1.96 billion yuan to acquire 4 companies in the Internet media and outdoor advertising business. Since then, six listed companies in the LED display industry with display screens as their main business have finally made their collective appearance, which has also brought a short end to the mergers and acquisitions in the LED display industry in 2015.

Mergers and acquisitions occur every year, especially this year. This is probably the common sentiment of many people in the LED display industry. According to incomplete statistics, in the first half of 2015, there were a total of more than 37 large and small mergers and acquisitions in the LED industry, and the scale of mergers and acquisitions exceeded 28 billion yuan, which greatly exceeded the full-year scale of 6 billion yuan in 2014.

The current recession in the LED display market and the survival pressure brought about by overcapacity have made the competition in the LED display industry increasingly fierce. The initial extensive competition has gradually shifted to the competition based on comprehensive strength represented by capital and technology. The initial incremental competition has gradually transformed into stock competition. This has become the consensus of the industry. The fierce competition is seriously squeezing the living space of LED display companies.

As competition intensifies, the advantages of mergers and acquisitions begin to emerge. It is understood that through horizontal mergers and acquisitions, enterprises can bring about economies of scale, increase their market share, suppress competitors, and improve entry barriers and differentiated advantages in their fields; vertical mergers and acquisitions can expand the strongest LED industry chain, achieve deep integration and optimization of resources in all links of the industry chain, and improve the overall competitiveness of enterprises; cross-border operations can enable enterprises to achieve diversified development at lower costs, diversify the company's main business risks, and achieve business transformation; cross-border mergers and acquisitions can tap larger markets and profit margins for enterprises.

In 2015, mergers and acquisitions in the industry have become more frequent, the types and entities of mergers and acquisitions have become increasingly diversified, and mergers and acquisitions wars in the LED industry have continued to ferment. It is no exaggeration to say that mergers and acquisitions have become the "new normal" in the development of the LED industry. In this wave of industry mergers initiated by LED listed companies, industry resources are becoming increasingly concentrated. The bigger ones are bigger, the stronger ones are stronger, and a new market pattern is about to emerge.

The trend of mergers and acquisitions is intensifying, the industry structure is about to differentiate, and industry concentration is getting higher and higher. The downturn in the terminal market and fierce competition have accelerated industry differentiation and survival of the fittest. Large companies have gradually begun to dominate the market, and more small and medium-sized enterprises will face the crisis of being eliminated. With the wave of mergers and acquisitions and the withdrawal of a number of small and medium-sized enterprises, the concentration of the LED industry will further increase in 2015, and leading companies with technological advantages and scale effects will stand out in the industry competition.

The pace of survival of the fittest in the LED industry has accelerated significantly. For small and medium-sized enterprises, the high concentration of industry resources is squeezing their living space. Only differentiated development or targeting market segments can they gain greater living space. Looking at the entire LED display industry, faced with such a rapid consolidation trend, industry insiders suggest: "Only by strengthening innovation, improving the core competitiveness of products, focusing on market segments, taking the path of differentiation, or improving product production efficiency and reducing corporate production costs can companies gain a foothold in the market."

In this year's M&A market, many companies, especially listed companies, are very good at playing the game, and the charm of capital is undoubtedly revealed. Mergers, acquisitions and integration are necessary stages for an industry to mature, and it is understandable for companies to engage in mergers and acquisitions. As for whether the final result is a win-win situation, 1+1>2, or whether it ends in disgrace and hurts both parties, this is something that many companies need to carefully consider and plan before taking action. You must know that mergers and acquisitions are like two people getting married. Marriage itself requires a lot of commitment, but it also has risks. Sometimes a good wedding may not necessarily lead to a successful marriage!

The new normal

The industry as a whole is in a downturn, and low growth has become the new normal for corporate development

In 2015, as the global economy faced a new normal of deep adjustment and rebalancing, the development of LED display manufacturers also encountered unprecedented difficulties.


In October, LED listed companies successively disclosed their third quarter financial reports, and we were able to observe the general development of these heavyweight companies in the industry in the first three quarters of 2015. From the above chart, we can clearly see that compared with 2014, among the six major LED display listed companies, four companies experienced a certain degree of decline in revenue and net profit year-on-year growth, and some companies experienced significant declines and even experienced negative growth. From the financial reports of the six major listed companies, we can get a glimpse of the development status of the entire LED display industry in 2015: the overall growth rate of the industry has slowed down, companies have increased production without increasing revenue, and increasing revenue without increasing profits has become the new normal of industry development.

According to analysis, affected by unfavorable factors such as the increasing downward pressure on the domestic macro economy and the slow recovery from the economic crisis in Europe and the United States, the overall prosperity of the industry is not high. The further release of downstream production capacity in the industry has made the competition in the display terminal market more intense. The price of finished display products has fallen rapidly, resulting in a general decline in corporate profits, and a significant decline in the profits of individual companies. Furthermore, rising labor costs have exhausted the demographic dividend and have also made corporate operating profits tight; increased market operating costs and increased management and financing costs have also further compressed corporate profits.

Looking back over the past decade or so, China's economy has experienced a long period of rapid growth. As domestic GDP growth fell below 7% in the third quarter of 2015, it was officially announced that China's economy has entered a "new normal" of low growth. Similarly, the domestic LED display industry has experienced rapid development for more than 10 years, especially after the investment "blowout" in recent years. It has now entered a stable and mature period, and the entire industry has entered an era of meager profits. The direct result is that the growth rate of corporate profits has slowed down. Most LED companies, including listed companies, have begun to see a decline in profits. Some LED companies have even gone bankrupt and reorganized due to a break in the capital chain. As Ding Yanhui, chairman of Absen, said: "This time, the wolf is really coming!"

Facing a severe industry situation, how should we respond? There are always more solutions than difficulties. The most important thing is that we must correct our mentality and face and accept this "new normal" calmly. In recent years, although there has been a certain degree of surplus in the domestic LED display terminal market, it is undeniable that the "cake" of the domestic LED display application market is expanding year by year. Every business has opportunities, so there is no need to be anxious and panicked.

On this basis, LED companies should pay attention to independent innovation and development, increase innovation investment and technological innovation, spend more time on products, technologies, services, etc., constantly develop new products, launch new technologies, improve service quality and grade, and further improve the market acceptance of LED displays, especially some innovative products, such as small-pitch LED displays. Furthermore, we will continue to develop new markets for LED display applications by exploring more market segments, such as LED transparent screens used in glass curtain wall buildings, and LED display hotel rental models.

The good news is that, against the backdrop of a slowdown in the overall industry growth and a generally sluggish market, our innovative products and technologies continue to emerge, and more market segments are developed and tapped. Huge profits are an unhealthy sign, while small profits are a sign that an industry is maturing. We should get rid of the past "profiteering" thinking as soon as possible, actively adapt to the new normal of the development of this industry, adjust our mentality, continue to innovate, and help the industry enter a sound and healthy development track as soon as possible.

Innovation

"Black Onyx" won another award. Innovation wheel promotes industry development

In February 2015, "Black Onyx", a disruptive and heavyweight product launched by Radioo in the industry, received another good news. It won the German IF Gold Award in one fell swoop, causing a sensation in the entire international design community. Since the "Black Onyx" (high-density LED display) was launched in October 2014, it has become a blockbuster. It has won six awards including Japan's G-Mark Design Award, Asia's Most Influential Design Award, and the "Red Star Award", the highest honor in the Chinese design industry. Before this, only Apple's iPhone 4 had done so. This time, it won the "Oscar" in the design world - the German IF Gold Award, and once again pushed the industrial products independently designed by the Chinese to the international stage.

It is understood that "Black Onyx" won the award mainly due to its unique appearance and structural design. In terms of appearance design, simplicity is the essence of the design, which maximizes the beauty of the LED display; in terms of structural design, it strives to be light, thin and easy to use, and uses aircraft manufacturing materials - aluminum-magnesium alloy die-cast LED modules, which greatly reduces the weight of the screen. In short, "Black Onyx" integrates technological innovation and experience innovation, and is a well-deserved "Oscar Gold" winner in the LED display industry.

Looking at the entire LED display consumer market today, it is not difficult to find that today’s consumers’ requirements for LED displays are no longer just functional, that is, displaying information, the simplest and most basic application level. With the continuous development and improvement of LED display technology and the continuous expansion of application fields, people have begun to put forward higher-level requirements for the appearance design and aesthetics of LED displays. How to integrate more creative and fashionable elements into LED displays has become a question that many LED display companies need to consider.

In response to market demand, LED display companies have begun to pay more and more attention to product packaging and design. The best example is that LED transparent screens are becoming popular in the market because of their thin, fashionable and technological appearance. As a result, innovations in the industry continued to emerge in 2015.

In March, Absen released the new product X3, which is wireless and adapts to ever-changing trends, leading the wireless era of LED displays; subsequently, Unilumin Technology proposed the concept of "16:9 standard resolution" for the first time in the industry, and accordingly launched the industry's first PL series that fully meets this golden ratio specification Small-pitch LED display; in June, Leyard's TW0.7 ultra-fine-pitch TV panel was unveiled at InfoComm 2015 in the United States, demonstrating P0.7 mm precision craftsmanship and fine image quality, and announcing that Leyard's TW0.7 series products have mass production capabilities. In October, Absen launched the flat-panel small-pitch HDV series (including different point spacings such as 1.2mm, 1.6mm, 1.9mm, 2.5mm, etc.). Everything from modules, power supplies to receiving cards can be pre-maintained, making it the industry's first true pre-maintenance product.

The emergence of a large number of innovative products in the industry has repeatedly awakened our renewed passion for the LED industry. There is no doubt that the current LED display industry has reached another crossroads, facing the unfavorable situation of severe homogeneity of market products, slowing growth in external demand, and sluggish overall industry growth. Only innovation can break the deadlock, and innovation has become the best way for industry recovery and growth, and for enterprises to break through and develop. In the 2014 industry annual summary, Chairman Guan Jizhen clearly put forward the development concept that innovation and brand will determine the future, adding another fire to the innovation of the LED industry and inspiring people.

The Fifth Plenary Session of the 18th Central Committee of the Communist Party of China emphasized: "Innovation must be placed at the core of the overall development of the country, innovation must be integrated into all the work of the party and the country, and innovation must become common practice in the whole society." It has raised the development of innovation to a new height.

Similarly, for our LED display industry, we must also talk about innovation, promote and encourage innovation, and let the whirlwind of innovation blow across every corner of the LED industry. "The brave will win when encountering a narrow road" and "Sail against the current, if you don't advance, you will retreat." For the industry, not innovating means struggling to find a new direction; for enterprises, not innovating means falling behind, meaning competition is weak, and they will be eliminated by the market. Only innovation can drive development and benefit the entire LED display industry, and achieve a better future for the LED display industry.

Small spacing

"Small spacing fever" is coming. A hundred schools of thought contend in the small spacing market

At the 11th Shanghai International LED Exhibition that ended in September this year, small spacing once became the focus of attention at the exhibition, and once again inspired people's enthusiasm for small spacing LED displays.

In recent years, the overall market environment of the industry has been sluggish, and the replacement of LED technology has also slowed down significantly. The development of the LED display industry seems to have entered a bottleneck period, and the emergence of small-pitch LED displays has become a weapon for some LED display companies to continue to expand the market and a new profit growth point for the companies, and has also added strong impetus to the development of the industry.

Relevant statistics show that the domestic small-pitch LED market size exceeded 600 million yuan in the first half of 2015, a year-on-year increase of more than 50%. It is expected that the full-year scale will reach 1.56 billion yuan, and the market size may reach 1.9 billion yuan in 2018. Currently, indoor LED small-pitch products mainly cover products with pitches P2.5-P1.9-P1.6. It can be said that there are already cases of P1.2 products, but due to the high price, they are not widely used. Leyard and Zhouming, ultra-fine dense small-pitch LEDs within P1.0, already have the ability to mass produce. The outdoor market has also set off a craze for small spacing, from P20-P10 to P10-P8, to the minimum spacing P5 and even to P4, the development is equally rapid.

With the development of small pitch, the upgrade of small pitch packaging devices also follows. Packaging manufacturer Nationstar Optoelectronics has launched indoor high-density 0808, which can meet the needs of P1.0-P1.2 small-pitch products. Smaller-pitch 0606 products are expected to be launched this year. Taiwan's Hongqi 0404 series products have been launched on the market this year.

In today's small-pitch LED market, more and more companies are involved. Not only are there traditional LED display companies, such as Unilumin Technology, Leyard, Lianjian Optoelectronics, Caiyida, etc., according to incomplete statistics, so far, there are Shanghai Sansi, Marui Optoelectronics, Han's Yuanheng, Qipu, etc. More than 20 domestic LED companies such as Optoelectronics have released their own small-pitch products, as well as DLP splicing companies such as Witron, GQY, Caixun, and Philips, as well as LCD companies. Foreign-funded companies such as Samsung and Philips, which are currently in the limelight, have also begun to actively participate in the small-pitch LED market.

The competition in the small-pitch LED market is becoming increasingly fierce. Taking the rise of small-pitch LED displays as an opportunity, the LED display market has once again set off a merger and acquisition boom. Since the second half of 2014, Unilumin Technology has acquired Lamp Technology for 68 million yuan, Qinshang Optoelectronics has controlled Caiyida with 37.6125 million yuan, and Lianjian Optoelectronics has spent 489 million yuan to acquire Easystar. Marked by the maturity of small-pitch LED displays, the LED display industry has reached a new stage, and more manufacturers are facing new challenges brought about by the impact of small-pitch LED displays.

As small spacing becomes popular in the LED display market, some manufacturers have begun to focus their research and development on how to better connect the display with the signal source, which has led to the birth of the 16:9 standard resolution small spacing LED display.

Currently, 16:9 standard resolution small-pitch LED displays have accumulated multiple successful application cases. In March 2015, Unilumin Technology proposed the concept of "16:9 standard resolution" for the first time in the industry, and accordingly launched the industry's first PL series small-pitch LED display that fully complies with this golden ratio specification. Subsequently, Leyard, Alto, and Caiyida also followed suit. The emergence of 16:9 small-pitch screens has brought disruptive changes to indoor LED displays and also injected new blood into the field of large-screen splicing. It is foreseeable that standard resolution will set off a storm in the field of small-pitch LED display.

Fine-pitch is developing rapidly, but we must also face up to some problems in the current marketing of small-pitch:

Cost, many companies are currently talking about "substitute" materials, that is, in substrates, integrated ICs, Domestic lamp beads and other aspects have introduced more "low-cost" products, striving to drive market demand and growth with cost reduction

2) Technical problems, such as how to eliminate moiré patterns, eliminate caterpillars, reduce the dead lamp rate, and achieve "low brightness, high gray and high brush" display effects, etc.

Secondly, market development in the past year shows that more ultra-fine spacing technologies and products have been converted into "technical reserves." Products that truly achieve large-scale application and mass production are basically concentrated between the 1.2 and 1.9 standards. Technology surplus is already a problem that the small-pitch LED screen industry must seriously consider.

The generalization of small-pitch LED display technology will inevitably mean a "generalized" application market. Large-scale mass production of indoor ultra-fine dense LEDs with small spacing within P1.0 has become a reality. It can be imagined that when small spacing is technically perfected and costs are controlled accordingly, the market acceptance and demand for small spacing products will be greatly improved, and the scope of application will become wider and wider. At that time, there will be a gradual transition from the public domain (security monitoring center, dispatching command center, information center, studio center, etc.) to the civilian field.

Industry insiders believe that the next three years will be a period when the small-pitch LED screen industry becomes truly popular. By then, there will be a scene of a hundred flowers blooming and a hundred schools of thought contending in the field of small-pitch LED screens.

Crossover

“No crossover, no subversion” Crossover has become the new “fashion” in the industry

In a speech at the 12th China International Semiconductor Lighting Forum (SSLCHINA) that ended in November, Ms. Wu Ling, secretary-general of the National Semiconductor Lighting Engineering R&D and Industry Alliance, explained a new point of view "no crossover, no subversion" that was impressive and aroused widespread resonance among the participants.

Indeed, in today’s domestic LED industry, cross-border is no longer a new term. In the field of LED display screens, cross-border development is becoming more and more popular. Some companies, especially listed companies, are actively engaging in cross-border development, which has become a bright scene in the LED industry.

Why cross? How to cross? Crossing to where? These are all questions that companies must consider when taking this step.

Seeking new opportunities and new markets is the driving force and common appeal of LED display companies to cross borders. Pang Guiwei, chairman of Shenzhen Tongpu Technology, said: "The LED display industry has entered a mature stage, but problems such as low profits, high competition, serious product homogeneity, and large accounts receivable have become increasingly prominent. Faced with the accelerated reshuffle of the LED display industry, companies should embark on horizontal or vertical transformation of the entire LED industry chain to seek new blue oceans." This is of course the voice of most industry peers.

On the one hand, cross-industry integrated development will change the established pattern of the industry. On the other hand, it is an effective model for multi-industry resource sharing and resource integration. It is a way for enterprises to seek common development through resource complementation. Judging from the current market structure of LED display screens, LED display screen companies are mainly seeking breakthroughs in industries such as lighting, cultural media, advertising, sports, and the Internet.

The sales models of LED display screens and LED engineering lighting products are similar, with high channel overlap and obvious synergy effects. The LED lighting market has great prospects and is very attractive to LED display companies. At present, there are many LED display companies in the industry involved in this field. In June, Alto acquired Qianbaihui. In July, Lehman acquired Tuoheng Technology; Leyard increased its capital to hold 55% of Pineng Optoelectronics. In September, Unilumin Technology planned to purchase 10% of Century Dingyuan’s shares. This series of "big moves" is the best example.

Cultural media, sports, advertising, hotels, the Internet and other fields are also key cross-border targets for LED display companies. In January, Leyard planned to acquire Jinlixiang and Lifeng LED Culture Media for 890 million yuan. In May, Zhang Xinjian, president of the China Internet Service Business Venue Industry Association, and Liu Hujun, chairman of Shenzhen Lianjian Optoelectronics Co., Ltd., formally signed a strategic cooperation agreement at the Friendship Hotel in Beijing. Lianjian Optoelectronics became the only partner of large-scale LED video display systems for e-sports venues in China's Internet service industry. In July, the actual controller of Lehman Optoelectronics invested 170 million in Swiss Infront Sports and continued to work intensively in the sports sector. In October, Lianjian Optoelectronics planned to invest 2 billion yuan to acquire four advertising media companies and continue to deepen its layout in the advertising media field.

In 2015, Absen also made its first gold in the hotel rental business. It is understood that in the first three quarters of fiscal year 2015, the company has signed a total of 304 display screens for a total of 181 hotels (including a total of 160 four-star and five-star hotels), and has installed 283 actual operating screens. In the first three quarters, a total of 2.8601 million yuan of rental income has been confirmed. Let us see another profit possibility for display companies. In addition, there are also some companies that are completely involved in financial electronics across borders, such as Alto Electronics. According to Alto Electronics' financial report for the first half of 2015, financial electronics, one of its two main businesses, achieved revenue of 22.7558 million yuan, becoming an indispensable part of the company's profits.

It is true that the cross-border expansion of enterprises presents both opportunities and challenges. It is by no means an understatement of simple capital injection, but another interpretation and expression of business philosophy, management system, cultural connotation, service content, and value output. Integrated development with other industries is particularly important.

Among these cross-border enterprise cases, there are winners and losers. Successful cases can be referenced and learned from, but cannot be copied. Failure cases deserve our reflection and vigilance, but we do not need to be overly depressed. Before any company considers and chooses to cross-border, it needs to make tailor-made decisions in order to find a path suitable for its own development.

There may be some new attempts in the future. In any case, there are risks in crossing borders, and companies need to be cautious.

New Opportunities

"Biding for the Winter Olympics", "Thirteenth Five-Year Plan", The "Belt and Road" industry welcomes new opportunities

On July 31, 2015, at the 128th Plenary Session of the International Olympic Committee in Kuala Lumpur, Malaysia, International Olympic Committee President Bach announced that Beijing, China, has won the right to host the 24th Winter Olympic Games in 2022. Since then, Beijing has also made history, becoming the first city to host both the Summer Olympics and the Winter Olympics.

Data shows that the 2022 Winter Olympics will build 3 Olympic villages and use 12 venues, 3 of which need to be rebuilt. Public information shows that the venue construction budget alone, including competition venues and non-competition venues, reaches US$1.51 billion. With the reconstruction of venues, the display areas inside and outside major venues will also need to purchase corresponding LED display products. With its excellent brightness, color, lifespan, application flexibility and other advantages, LED display screens will also play a major role in the construction of Winter Olympics venues, which will undoubtedly create excellent opportunities for national brand LED companies.

So in which situations will LED displays play an important role? Undoubtedly, the event venue will be the highlight. In recent years, LED displays used in venues for sporting events such as the Guangzhou Asian Games, Shanghai World Expo, Shenzhen Universiade, the 2012 European Cup, and the London Olympics have sprung up in front of everyone. LED displays have been widely used, including opening and closing ceremony performances, information displays inside and outside the venue, and displays around the stadium.

In addition, it is reported that in order to ensure convenient transportation for the 2022 Winter Olympics, my country will launch the Beijing-Zhangjiakou intercity railway construction project within the year. After the project is completed, it will only take 50 minutes from Beijing to Zhangjiakou. The launch of the transportation facilities construction project will also support the purchase of LED displays for passenger guidance, vehicle operation monitoring, command and dispatching and other related work. It will also bring new business opportunities to related display equipment manufacturing companies, including LED display manufacturers.

In addition, during the Winter Olympics, the application of security systems will surely become a top priority, and indoor small-pitch LED displays will play a role in operations monitoring, command and dispatch and other fields.

Finally, the arrival of the Winter Olympics and the coordinated advancement of small urbanization construction will definitely drive the rise of domestic winter ice and snow projects, which will in turn drive the rapid promotion and popularization of ice and snow projects in China. The consequent construction of a series of sports venues and supporting facilities will also provide domestic LED companies with an opportunity to show off their talents.

Recalling the 2008 Beijing Olympics, the huge sensational effect led to the rapid rise of a large number of LED display companies in the industry, directly driving the rapid development of my country's LED display industry. Therefore, there is no reason to doubt that the hosting of the 2022 Beijing Winter Olympics will bring a new round of stimulating effect to the domestic LED display industry. At the same time, it will give domestic LED display companies another excellent brand display opportunity.

On October 29, the Fifth Plenary Session of the 18th Central Committee of the Communist Party of China reviewed and approved the 13th Five-Year Plan for National Economic and Social Development, with new urbanization as one of the topics attracting much attention. The construction of new urbanization will inevitably lead to the simultaneous follow-up of related infrastructure construction, and LED display companies will also directly benefit from these infrastructure construction projects. The advancement of new urbanization construction is expected to drive the LED display industry to a new round of explosive growth. In addition, the "One Belt, One Road" innovative global economic and trade cooperation and development concept will undoubtedly create more development opportunities for my country and related countries. Domestic LED display companies will also directly benefit from infrastructure construction projects in various countries.

This series of good news is exciting enough, allowing domestic LED display companies to see more business opportunities and have more expectations. In such a good era, while LED display companies are enjoying the favorable national policies, they should also practice self-cultivation in order to seize opportunities and achieve a leap forward.

Going out


Enterprises speed up “going out” to embrace the global market

In recent years, China's LED industry has developed rapidly. Domestic LED display companies have significantly enhanced their strength and broadened their horizons. More companies have begun to set their sights on the international market and participate in global market competition. These "pioneers" not only actively invest and set up factories overseas, and engage in large-scale acquisitions and mergers, but also begin to undertake more external engineering business for large-scale international projects.

In February, Absen’s A1688 advertising screen and A5 rental screen simultaneously landed in the world’s first-class commercial center - Times Square in New York. This is the first official and long-term appearance of a Chinese LED display brand in a global first-class commercial center. This is not only a big step for Absen, but also a big step for Chinese LED display brands to enter the international stage. In July, Leyard invested in MIC, an Indian LED display manufacturer. In August, multiple full-color indoor and outdoor LED displays built by Qingsong Technology officially settled in the Abdullah Kingdom Sports City, a world-class first-class sports venue. In August, Leyard spent RMB 1 billion to acquire Planar Electronics of the United States, and then struck while the iron was hot and acquired 100% of the shares of PLANAR.

This series of actions shows that Chinese LED display companies are increasingly setting their sights on the entire international market. Their successful experience not only demonstrates the international influence of Chinese LED display brands, but also marks that Chinese brands have officially entered the highest level of the global LED industry. It can be said that the "going out" development strategy is becoming the consensus of many domestic LED display companies. The level of domestic LED display companies going global and embracing the international market has also reached a new level.

At the same time, on the one hand, international LED giants Philips, Samsung, and Osram have successively announced the sale and spin-off of their LED lighting business, playing a "downsizing" game; on the other hand, domestic LED companies or venture capital funds are keenly paying attention to the market trends and strategic intentions of these international giants, and then actively complete equity participation and mergers and acquisitions. In March, Jinshajiang Venture Capital M&A Fund successfully acquired 80.1% of Lumileds, a subsidiary of Royal Philips of the Netherlands. In July, Kaifajing acquired 100% equity of BridgeLux. As China's semiconductor lighting industry continues to develop towards the global vision, the current pattern of the global semiconductor lighting industry is quietly changing, which also provides a good opportunity for domestic LED display companies to go global.

From the perspective of the global LED display market structure, China is the largest market in a single country, accounting for approximately 25%-30% of the global market. As the domestic market becomes saturated, domestic LED display companies must "go out" and expand the global market in order to find new profit growth points for industrial development. Looking at the global LED display market structure, the once important export markets of North America and Europe are also becoming saturated. Coupled with increased market access, more companies are targeting emerging markets such as Russia, Southeast Asia, Africa, and Latin America.

With the implementation of the “One Belt, One Road” strategy, Chinese LED display companies’ going global also has a more strategic meaning. These pioneers who have successfully "going global" are like business cards for China's industrial manufacturing, representing the highest level of domestic LED display manufacturing. They are not only the leaders of the entire LED industry going abroad, but also the disseminators of China's LED display brands, playing an immeasurable role in enhancing the international influence of domestic LED display brands.

However, despite the joy, we must also face the risks. The road to internationalization of our cross-border operations will not be smooth all the way. Before entering the international market, we must comprehensively consider all aspects of adverse factors, such as politics, religion, history, culture, etc. We should also enhance our awareness of intellectual property protection, enhance our understanding of non-tariff trade barrier measures, and master the necessary means to prevent and protect industrial development. Only then can domestic LED display companies sail smoothly into the vast ocean of the international market.

New Third Board

New Third Board, can the New Third Board solve financing difficulties

On October 23, 2015, Shanghai Yangbang Technology Co., Ltd. was successfully listed on the New Third Board. So far, Shanghai Yangbang has become the fourth company in the LED display industry to be listed on the New OTC Market after Chip Optoelectronics, Yuanheng Optoelectronics, and Easystar (which have terminated their listing after the acquisition of Lianjian Optoelectronics). It is also the first company in the field of LED display control systems to land on the capital market.

The New Third Board is known as the Chinese version of "Nasdaq". Currently, the number of listed companies has exceeded 3,500, which is more than three times that of the Shanghai Stock Exchange, twice that of the Shenzhen Stock Exchange, and more than 30% more than the Nasdaq in the United States. The vast majority of them are small and medium-sized enterprises, including nearly 50 LED companies.

So why is the New OTC Market so attractive to small and medium-sized enterprises? Why are LED companies scrambling to get into the arms of the New OTC Market? What substantive changes can the New OTC Market bring to enterprises?

If small and medium-sized enterprises want to become bigger and stronger, they must first solve the problem of financing difficulties. Because small and medium-sized enterprises have poor risk resistance and limited physical assets that can be mortgaged, few banks are willing to lend to small and medium-sized enterprises. It is precisely for this reason that small and medium-sized enterprises have always lacked a platform to use financial leverage to become bigger and stronger.

If small and medium-sized enterprises want to become bigger and stronger through financial leverage, and if they want to obtain more financing channels, they must take the path of the capital market. In addition, small and medium-sized enterprises in my country's LED industry are characterized by "large numbers and small size", and financing difficulties have become the biggest practical problem that small and medium-sized enterprises in the industry have to face.

As independent IPOs become more difficult, for some LED companies, whether it is the main board, GEM or SME board, the threshold is relatively high, and the low threshold of the New OTC Market has naturally become the best choice for SMEs to grow bigger and stronger on this financing platform.

Transfer is also a very important factor. In fact, for a long time, people have always regarded "transfer board" as the greatest charm of the New Third Board. The New Third Board once used the transfer of listings as bait to attract companies to list on the New Third Board. It seems that logging into the New Third Board is a shortcut to logging into the main board, small and medium-sized board or GEM.

In November this year, the China Securities Regulatory Commission officially issued "Several Opinions on Further Promoting the Development of the National Small and Medium-sized Enterprises Share Transfer System." The release of the "Opinions" indicates that the transfer pilot should be launched soon, exceeding market expectations. This is undoubtedly a major good news for many small and medium-sized enterprises listed on the New OTC Market, including LED companies.

Of course, the charm of the New Third Board is not only reflected in its ability to improve the financing capabilities of enterprises. In addition, enterprises can also obtain a better display platform, enhance their public image and awareness, and obtain more development resources. It is more beneficial in attracting the attention of investment institutions, high-quality suppliers and customers, expanding the market, gaining customer trust, increasing public awareness and obtaining government support.

The LED industry is in a period of rapid growth. Listing on the New Third Board is undoubtedly an excellent choice for creative small and medium-sized LED companies. It allows small and medium-sized enterprises to freely raise and release financing, improve financing efficiency and reduce financing costs.

However, judging from the current market performance, especially in the LED market, the financing rate is not high. Among the dozens of LED companies currently listed on the New OTC Market, very few have actually successfully raised funds. Therefore, enterprises need to develop various forms of financing channels, such as through upstream and downstream customers, channel dealers, venture capital funds, etc. This means that we cannot put everything in one basket and must have a diversified financing layout.

Obviously, the New OTC Market is not a "panacea" for LED small and medium-sized enterprise financing, nor may it be the last "life-saving straw." There are still many problems existing in the New Third Board, such as insufficient liquidity and low valuation. On the other hand, many people in the industry believe that the New Third Board will become a gold mine for the capital market. At least so far, this gold mine has not fully exploited its huge potential. As for whether the New OTC Market can eliminate these problems through gradual development and improvement, release its huge energy, and thus more effectively solve the financing problems of small and medium-sized enterprises? This is still unknown and awaits further observation.

Bankruptcies and layoffs

The wave of layoffs and bankruptcies is coming, and the industry is facing a "cold winter"

In July 2015, two corporate bankruptcies were exposed in the LED industry. Zhongxiang Innovation and Light Energy Technology both failed due to a break in the capital chain. Everyone is familiar with bankruptcies in the LED industry, but the news of bankruptcies that have been revealed in the past few years has been flooding in, which is enough to sound the alarm for people in the LED industry.

Since 2015, global economic growth has slowed down and market volatility has intensified. In such an environment, a new wave of layoffs has set off around the world. This wave of layoffs has had a certain impact on all walks of life. Of course, the LED display industry has not been immune.

In the second half of 2015, Taiwan's LED chip industry quietly set off a wave of "small-scale" layoffs. In September, Epistar, a major Taiwanese LED chip manufacturer, laid off 65 employees, and then planned to lay off 76 employees at its Zhuke plant in three batches. In addition, Canyuan Optoelectronics, a subsidiary of Epistar Group, will lay off a total of 39 employees at its Longtan and Pingzhen plants.

Of course, this is just a microcosm of this round of "small-scale" layoffs in the entire LED industry. According to analysis by research institutions, the oversupply rate in the LED chip industry was as high as 22% in 2015, and the supply and demand imbalance has seriously impacted the LED chip industry. Faced with such a severe industrial situation, layoffs seem to be the most direct way for chip companies to reduce costs and improve efficiency.

On one side there are bankruptcies and on the other side there are layoffs. You sing and I come on stage, one wave after another. The LED industry seems to have entered a cold winter period. How to survive this period and survive has become a top priority for many companies. As one industry insider said, "Survival is the first priority at all times. Talking about development without survival is nonsense."

The root cause is of course the overall downturn in the industry, the sluggish market, and overcapacity. The direct reason is probably caused by the fragility of corporate capital chains. In the capital era with such fierce market competition, corporate capital chains are too fragile and cannot withstand the "storm" of the industry.

Therefore, enterprises need to take appropriate measures and increase efforts to consolidate the enterprise's capital chain, as follows:

Develop multiple financing channels to avoid too single source of funds

Implementation The cash-is-king capital strategy ensures sufficient corporate liquidity, closes funding gaps in a timely manner, and maintains the red line of corporate cash reserves.

To the greatest extent possible, we can avoid the capital shortage problem caused by industry triangular debt, and avoid the occurrence of a fire at the city gate that will affect the fish in the pond.

For companies, layoffs may be an option to reduce costs and survive the cold winter. Every company has its own considerations, and we are positive about healthy layoffs. However, if not handled properly, it may bring about many other negative problems. Therefore, when companies choose to lay off employees, they should also consider issues such as employee reemployment and social unrest, rather than just focusing on the company's interests.

In addition to layoffs, are there other ways we can get out of the current predicament? Relevant people in the industry have also given some suggestions: first, strive to innovate, make good products, increase product added value, and enhance the core competitiveness of products in the market; second, avoid homogeneity and explore differentiated and specialized routes; third, strengthen and improve the management level of the enterprise by cultivating and introducing talents; fourth, enrich marketing models and broaden sales channels.

It’s spring when it’s over. I don’t know when this wave of bankruptcies and mergers and acquisitions will subside. It may be three years, it may be five years, or it may take longer. For enterprises, the most important thing is to work hard on their internal skills, so as not to be at a loss when the "tide" recedes and be left behind by the industry. When the clouds open and the moon shines brightly, everyone can encourage each other.

Brand

The brand effect is gradually becoming more prominent and brand building is urgent

The world’s LEDs look to Asia, and Asia’s LEDs look to China. This is the most realistic portrayal of the current global LED industry landscape. As an important branch of the LED industry, after years of development, my country's LED display industry has successfully dominated the development of the world's LED display industry in terms of technology and innovation, and has become the leader of the global LED display industry.

In the past decade or so, China's LED display industry has developed rapidly, and the low entry barriers have resulted in a market structure in which there are a large number of companies in the domestic LED display industry with varying sizes and strengths. Many LED display companies use simple and crude competition methods - blindly fighting for low prices and engaging in vicious competition as their main survival mode, often without paying attention to product technological innovation and independent brand building.

Looking at the current domestic LED display market, the growth of market demand has slowed down and competition has become increasingly fierce. Companies that rely on low-price competition as their development model are facing increasing pressure to survive, and the competitive advantages of companies that continue to invest in brand building have begun to become prominent, that is, brand effect has begun to become more of a powerful weapon in corporate market competition.

Brand is not only the soft power of an enterprise, but also its core competitiveness. A brand is equivalent to the business card of a company or product and has immeasurable potential value. The construction of a brand requires long-term investment and persistence from the enterprise. The brand is a strong backing and powerful guarantee for the sustainable and steady development of the enterprise.

In today's rapidly developing global economy, the value of brands has also been rapidly amplified. Even at the national level, how many well-known brands a country has can often reflect a country's soft power and national creativity. Although brand effect cannot be estimated numerically, it often best reflects the core competitiveness of a company or a product. "Many domestically produced cars are doing well, but they are still incomparable to BMW and Mercedes-Benz. This is the brand effect." said Guan Jizhen, chairman of the LED Display Application Branch of the China Optics and Optoelectronics Industry Association.

Lin Mingfeng, chairman of Shenzhen Unilumin Technology Co., Ltd., said: "In today's international LED display market, it is difficult to see Chinese brands. Most Chinese LED companies are OEMs for international brands. At present, Chinese LED display companies are struggling on the road to branding, and the lack of corporate brands has become an obstacle for Chinese companies to compete in the international market."

It is true that in my country's LED display industry, there are many companies exporting products to the world, but there are very few companies exporting under their own brands. Corporate brand awareness is indifferent, brand cultivation is insufficient, and brand added value is low. These are the main reasons why my country's foreign trade LED small and medium-sized enterprises lack a voice in the international market and have been subject to foreign customers and international brands for a long time.

Today, whether it is domestic or international market competition, brand is a factor that cannot be ignored, and even a dominant key element. Internally, the success of brand building is directly related to the market competitiveness of the company and the life and death of the company; externally, building independent brands and enhancing our brand influence have become an important part of whether China's LED display screens can break through the siege and create miracles in the international market

In the global market, with China’s accession to the WTO in 2001, the influence of “Made in China” cannot be ignored. With the advent of the Industry 4.0 era and the promulgation of the “Made in China 2025” national strategy, the innovative power of “Intelligent Made in China” has yet to be tested by time. Lin Mingfeng, chairman of Shenzhen Unilumin Technology Co., Ltd., believes that the influence of "Made in China" and the innovation of "intelligent manufacturing in China" should be reflected in the brand. This is also an issue that the current LED display industry should think about.

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