Industry leader San'an Optoelectronics announced on the evening of November 28 that the account of the company's employee stock ownership plan is the Xinzhong No. 1 collective plan established by Industrial Securities Asset Management Co., Ltd. As of November 28, 2014, the stock ownership plan has purchased 50.3016 million shares of the company's stock, with an amount of 742.0839 million yuan.
Previously, the third meeting of the company’s eighth board of directors and the third extraordinary general meeting of shareholders in 2014 reviewed and approved the proposal of the “Employee Stock Ownership Plan and Summary of Sanan Optoelectronics Co., Ltd. (600184) Co., Ltd.”. The upper limit of the amount of the stock ownership plan used to purchase company shares is 930 million yuan.
Based on its optimism about the prospects of the industry, Sanan Optoelectronics has become the "number one crab" in implementing employee stock ownership plans among LED concept stocks.
Sanan Optoelectronics is not an isolated case.
Industry analysts from Guotai Junan believe that the LED industry is currently benefiting from the launch of the lighting market and is ushering in the best times in history and has entered a three-year high-prosperity cycle.
LED can be roughly divided into three areas: upstream chips, midstream packaging, and downstream applications. According to reports, LED currently has three main applications: lighting, backlighting, and display screens. Display screens are now saturated, growing at about 10%-30% every year. TV backlights are not growing much, but LED lighting is growing explosively.
It is expected that the total global LED lighting output value will reach 25.7 billion US dollars in 2015, accounting for 31.3% of the total lighting market output value. The industry predicts that European production capacity will account for 23% of the global LED lighting market next year, China will account for 21%, and the United States will account for 19%.
As the world’s largest producer, consumer and exporter of lighting products, China’s domestic LED industry has grown rapidly, with the market size exceeding 260 billion yuan in 2013.
Domestically, based on the needs of public sectors such as civil and road lighting, Ding Wenwu, director of the Electronic Information Department of the Ministry of Industry and Information Technology, recently predicted that domestic LED output value will continue to maintain a rapid growth of 20% to 30% next year. Lu Wenbin, deputy director of the Department of Resource Conservation and Environmental Protection of the National Development and Reform Commission, also predicts that the goal of LED lighting market share of 20% in 2015 will be achieved ahead of schedule.
In 2011, my country issued the "China's Roadmap to Phase Out Incandescent Lamps". According to the national plan, the import and sale of incandescent lamps for general lighting of 60 watts and above will be prohibited from October 1, 2014; the import and sale of incandescent lamps for general lighting of 15 watts and above will be prohibited from October 1, 2016. Incandescent lamps have been eliminated, and the market space left has brought huge development potential for energy-saving lamps.
At the beginning of last year, six ministries and commissions including the National Development and Reform Commission and the Ministry of Science and Technology jointly issued the "Semiconductor Lighting Energy-saving Industry Plan", which clarified that the output value of the LED lighting energy-saving industry will be promoted by an average annual growth of about 30%, reaching 450 billion yuan in 2015, of which 180 billion yuan will be used for LED lighting application products. At the same time, the energy-saving lamp subsidy policy released in 2008 is coming to an end this year. According to industry insiders, the subsequent subsidy plan is likely to be implemented for LED.
In terms of exports, relevant data shows that in the first half of 2014, China's LED lighting product exports amounted to approximately US$4.35 billion, a year-on-year increase of 135%; more than 50% of exports are mainly concentrated in traditional mainstream markets such as the United States, the European Union, and Japan, while emerging markets such as the BRICS and the Middle East are growing rapidly; Russia has become my country's second largest export market in the second quarter of 2014 with a market share of 9% and a year-on-year growth rate of 571%.
Performance is improving
According to statistics, as of November 2014, there were more than 80 domestic LED lighting industry-related concept stocks, of which 22 companies were listed through LED industry chain-related concepts, mainly LED chips, packaging, display screens, outdoor lighting, supporting materials, and supporting equipment.
With the expansion of the market, in the first half of 2014, the average revenue growth rate of the LED sector exceeded 30%, ranking first among the 29 A-share industry sectors in my country.
On July 31, Sanan Optoelectronics released its 2014 semi-annual report. In the first half of the year, the company achieved operating income of 2.177 billion yuan, a year-on-year increase of 30.03%; net profit attributable to shareholders of listed companies was 666 million yuan, a year-on-year increase of 43.87%; basic earnings per share was 0.42 yuan, a year-on-year increase of 31.25%.
On the basis of the beautiful performance in the semi-annual report, the performance of listed companies in the LED industry continued to improve in the third quarter.
Sanan Optoelectronics’ operating income in the first three quarters of 2014 was 3.478 billion yuan, a year-on-year increase of 32.16%; the net profit attributable to shareholders of listed companies was 1.05 billion yuan, a year-on-year increase of 38.02%. Thanks to the rapid growth of the smartphone industry and the increase in industry market share due to large and medium sizes, Jufei Optoelectronics achieved total operating income of 761.0178 million yuan in the first three quarters, a year-on-year increase of 43.54%; net profit was 131.2029 million yuan, a year-on-year increase of 34.40%. Similarly, LED devices and large-size backlights contributed to the high growth of Nationstar Optoelectronics' performance in the first three quarters of 2014. In the first three quarters of 2014, the company achieved operating income of 1.14 billion yuan, a year-on-year increase of 39.1%; net profit attributable to shareholders of listed companies was 100 million yuan, a year-on-year increase of 35.3%; basic earnings per share was 0.23 yuan.
M&A trends
As the LED lighting industry gradually matures, M&A integration is an inevitable process.
A new round of LED mergers and acquisitions has begun.
In 2014, mergers and acquisitions in the LED lighting industry surged. According to statistics, there are more than 100 related mergers and acquisitions cases, with the value of mergers and acquisitions exceeding 10 billion yuan. Among them, there are more than 20 mergers and acquisitions cases of listed companies in the LED industry chain, with the merger and acquisition amount exceeding 6 billion yuan. After Dehao Runda acquired NVC and Sanan Optoelectronics acquired Taiwan Canyuan Optoelectronics in 2013, Tongfang competed for the controlling stake of Zhenmingli for 700 million yuan, Changfang Lighting acquired 60% of Kangmingsheng for more than 500 million yuan, Hongli Optoelectronics acquired Smede for 180 million yuan, Jiawei Shares acquired Pinshang Lighting for 122 million yuan, Lehman Optoelectronics acquired and invested in Kangshuozhan, and other industry mergers and acquisitions occurred frequently, and resource integration gradually began to reach a climax.
In order to quickly enter the domestic lighting market with huge market capacity, gradually get rid of a single overseas market, and enhance its ability to resist risks, Jiawei Lighting chose Pinshang Lighting. Public information shows that Jiawei Lighting acquired Pinshang Lighting, a well-known company in the domestic commercial lighting field, for 122.5 million yuan. Jiawei Lighting stated that in the future, Pinshang Lighting, as a wholly-owned subsidiary and main sub-brand of Jiawei Lighting, will accelerate development after the listed company continues to invest superior resources, and is committed to building Pinshang Lighting into a first-class brand in the domestic commercial lighting field and enhancing the comprehensive competitiveness of the LED business field.
ANNA