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 is slowing down, the growth of enterprises is low, increasing production without increasing revenue, 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 competition in the display terminal market more intense, and the display industry has become more competitive. The rapid decline in commodity prices has led to a general decline in corporate profits, and the profits of individual companies have declined significantly. Furthermore, the increase in labor costs has exhausted the demographic dividend and has also made corporate operating profits tight. The increase in market operating costs and the increase in management and financing costs have also further compressed corporate profits.
Looking back on 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.
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 and demand of LED displays, especially some innovative products, such as indoor 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 in the industryAgainst the background of the overall industry growth slowdown and the 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.
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