In December, as a leading LED packaging factory, Everlight received a huge OEM order from Philips. Ye Yinfu, chairman of Everlight Electronics, is very optimistic about the future market demand for TV, lighting and indoor signage products. Based on this, he has decided to invest NT$30 billion (equivalent to approximately RMB 5.861 billion) in the next five years to expand factories and increase production capacity in Taiwan in order to gain a larger market. At the same time, it also allows LED lighting peers to see the huge potential business opportunities.
LED OEM business opportunities are huge
It is understood that Everlight just won Philips’ 2015 annual bid in December this year. General Manager Liu Bangyan personally led a team to Philips' Shanghai headquarters, where it ranked as the three largest suppliers with Ruifeng and Tiandian. It is understood that Philips' annual bidding scale requires 350~500KK (350~500 million) packaged modules per month. If divided equally among the three manufacturers, Everlight would receive about 150 million units per month, accounting for about 4% of Everlight's total production capacity.
It is of great significance for Everlight to receive orders from Philips, and it is expected to receive more orders in the future. Looking at the world's three major lighting brands, Philips Lighting's revenue last year was 7 billion euros (equivalent to approximately 52.951 billion yuan), Osram was approximately 5.3 billion euros (equivalent to approximately 40.091 billion yuan), and GE was approximately US$1.857 billion (equivalent to approximately 11.554 billion yuan). The three major manufacturers combined exceeded 500 0 billion NT dollars (equivalent to about 97.945 billion yuan), of which about 30% is LED lighting. As long as Everlight takes 5%, it will have NT$8.5 billion (equivalent to about 1.665 billion yuan) in revenue. What's more, these three major manufacturers account for less than 30% of the global LED lighting market, and there is still 70% of the market.
Everlight’s EPS this year is estimated to be NT$5
Everlight’s revenue in the first 11 months of this year was NT$28 billion (equivalent to approximately RMB 5.485 billion), with an annual growth rate of 24.8%. It is estimated that the full-year EPS will reach NT$5, making it the profit king of Taiwan’s LED market.
Yiguang Chairman Ye Yinfu, who has always been conservative in speaking, took the initiative to announce a large-scale expansion plan last week. He has found 17,000 square meters (about 56,000 square meters) of land in central and southern China. He is expected to invest NT$10 billion (equivalent to about 1.954 billion yuan) in three years, with a maximum investment of NT$30 billion in five years. This astronomical investment is the largest investment in the LED industry this year.
For a packaging factory, this amount of investment is staggering. According to analysis by industry insiders, Dongbei's new Wugu factory this year cost approximately NT$2 billion (equivalent to approximately RMB 392 million) on 2,000 square meters of land and factory buildings. Packaging factory equipment is not expensive, but the most expensive thing for building a factory is the land. For 17,000 square meters of land and factory buildings, an investment of NT$3 billion (equivalent to about 588 million yuan) is more than enough. Even 10 billion yuan in three years is scary.
Everlight has only expanded its production by 25% this year, with monthly production capacity exceeding 4KKK (4 billion units). Now that it is expanding its production capacity, the industry believes that Everlight has received a confirmed large order. In the future, Everlight will develop towards its own brand and OEM, and its revenue and profits will jump again next year.
Yiguang Chairman Ye Yinfu said in a low-key manner that the expansion of production is to surpass the previous giants, including Cree, Nichia, Osram, etc. However, industry insiders believe that "Everlight has seen explosive business opportunities in lighting." LED backlights are planned production, but LED lighting is completely different. Orders come as they come, and only those with production capacity can seize the performance.
ANNA