When LED products sweep the world and replace traditional lighting products as the mainstream light source, transformation has become the only choice and inevitable test for traditional lighting companies to survive.
A few days ago, German lighting giant Osram, which has frequently laid off employees and closed factories this year, once again stated that it would cut more positions and continue to sell factories to further adjust the production capacity of traditional lamps to adapt to the development of technology.
Transformation means not only opportunities, but also pain. The same is true for international lighting giants, and the same is true for domestic traditional lighting companies.
Foshan Lighting [0.00% Funding Research Report] Transforming LED to make up for the embarrassment
It is difficult to turn around the ship. The "traditional lamp king" Foshan Lighting started to get involved in LED lighting earlier, but its transformation to LED lighting was not firm. During this period, it experienced a failure in investing in the lithium battery business. During the period of rapid growth of LED indoor lighting, Foshan Lighting has been involved in huge claims from shareholders. In addition, the LED industry has entered a period of differentiation and reshuffle. Foshan Lighting's transformation path is destined to be full of ups and downs.
As early as August 2010, Foshan Lighting announced that the company had reached a preliminary cooperation intention with the American Bridgelux Optoelectronics Co., Ltd. [-1.65% Funding Research Report] Co., Ltd. on the LED project, but there was no subsequent progress in the project.
In June 2012, Foshan Lighting announced the liquidation and cancellation of its holding subsidiary Guangdong Fozhao New Light Source Technology Co., Ltd., and announced that the New Light Source Company jointly established with Lijia Science and Technology Co., Ltd. in April 2011 was officially dissolved. From its establishment to its dissolution, for more than a year, New Light Source Company has not been in actual operation and has not generated any income. Foshan Lighting’s transformation into LED failed in its first battle.
In the early days, the cost of LED lighting was high, the technology was not mature, and the market lacked standards. The promotion of LED lighting by traditional lighting companies will also form a competitive and substitutive relationship with the original products. Therefore, although a large number of traditional lighting companies are involved in LED lighting, the actual transformation is not determined, and the attitude is still lingering. Although Osram, the major shareholder of Foshan Lighting, holds many patents in the field of LED lighting, it has always been unwilling to introduce these technologies into Foshan Lighting. Because Osram is not only the major shareholder of Foshan Lighting, but also its competitor.
2013 is called "the first year of LED indoor lighting" by the industry, and LED lighting is replacing traditional light sources at an ever-increasing rate. Some people in the industry bluntly say that the next eight years from now will be a period of rapid growth for LED lighting. During this period, the lighting industry is very likely to be reshuffled. Whoever can take the lead is likely to dominate the lighting industry in the future.
However, at this time, Foshan Lighting was caught up in changes in senior management and lawsuits from shareholders. In March 2013, Foshan Lighting received an administrative penalty decision from the Guangdong Supervision Bureau of the China Securities Regulatory Commission. The penalty decision imposes administrative penalties on Zhong Xincai and Zou Jianping of Foshan Lighting, the parties involved in Foshan Lighting's illegal disclosure, among which Zhong Xincai is the former chairman of Foshan Lighting. Before and after, Foshan Lighting experienced a series of high-level changes, including the resignation of former deputy general manager Zou Jianping, former director and deputy general manager Zhao Yong, and former chairman Zhong Xincai.
The illegal incident disclosed in the letter served as the trigger, which ultimately triggered a collective claim of 100 million yuan from more than a thousand shareholders against Foshan Lighting. The trouble is not over yet, as this high-profile lawsuit will be heard on July 9, 2014.
In early 2014, Foshan Lighting announced that it had added two new lighting brands through exclusive licenses. This was called by the industry to refocus on lighting and accelerate the transformation to a new generation of lighting technology, LED.
In order to grab territory, Foshan Lighting resorted to the traditional trump card of Chinese enterprises, the "price war." In the first half of this year, its "price bargaining" actions even caused a shock in the market: LED bulbs entered the market in large numbers, with sales of up to 12 million units per month, and the price of LED bulbs that focused on the low-end market was adjusted to 3 yuan each.
The price killer played by Foshan Lighting has caused a lot of doubts and debates in the industry, because price war is a double-edged sword, and excessive price competition often means a reduction in product quality. A person in charge of the company said that if Foshan Lighting's brand promotion and marketing expenses can achieve quality with a warranty of more than one year, its ex-factory price of 3 yuan is also a "loss-making" move to grab channels.
Op Lighting overcomes the challenges of LED home lighting
Two years ago, LED lighting was like a "tasteless" product for traditional lighting companies, because the LED lighting market was in chaos, product homogeneity was serious, vicious price competition was everywhere, and most companies were still losing money; in contrast, in the traditional lighting field, life was going well. Therefore, a few years ago, the LED road for traditional lighting often seemed louder than rain.
For example, Opple Lighting stated as early as 2009 that it would spend 20 million yuan to enter the LED industry. However, in the following years, Opple’s performance in the LED field was rarely seen. In fact, the LED home lighting market is an area with greater resistance to the development of LED lighting applications, and the current development is still underdeveloped. Therefore, as a leader in traditional home lighting, it is not surprising that Opple Lighting has had little performance in the LED field in the past few years.
The rapid development of LED lighting in 2013 shows that the transformation process in the lighting field is accelerating, which promotes the transformation of traditional lighting companies. On May 5 this year, Opple Lighting’s name appeared on the list of 30 IPO pre-disclosure companies released by the China Securities Regulatory Commission (Caiyuan). This is the company’s second attempt at an IPO on the Shanghai Stock Exchange. Opple Lighting plans to publicly issue no more than 58 million new shares to raise 1.2 billion yuan, focusing on the production of green lighting.
Overcoming the popularization and application of LED lighting in the home field is both an opportunity and a challenge for Opple Lighting. Although the development prospects of LED lighting are promising, uncertain factors in the development of the industry still exist: industry quality standards are unclear, the testing system is not fully established, there are many participating manufacturers but product specifications are not standardized, and the market is disorderly competition. In particular, the field of LED home lighting is still in a state of chaos.
Sunshine Lighting [-1.47% Funding Research Report] Wins at Scale and “Stabilizes Development”
As early as the beginning of the rise of LED lighting, Sunshine Lighting has been involved in LED products, but there has not been much action before 2011. Industry insiders speculate that it may be due to the large inventory of traditional products, the slow pace of corporate U-turns, and the pursuit of "stable development" by senior leaders.
Until 2011, Sunshine Lighting took the lead in transforming traditional lighting companies into LED lighting through private placement, and the proportion of the company's LED lighting products also continued to increase. In 2010, the company's LED lighting product revenue was less than 50 million yuan, and in 2011 it was close to 100 million yuan. In the first half of 2012, the revenue from LED lighting products was nearly 100 million yuan. In 2013, LED products achieved revenue of 983 million yuan, a year-on-year increase of 170%. The proportion of LED lighting product revenue in the company's revenue increased from 14% in 2012 to 31% in 2013. Among them, Sunshine Lighting began to build a 10-billion lighting dream in 2012 and proposed the goal of achieving sales of 10 billion yuan by 2018.
Judging from the data, Sunshine Lighting's development pace in the field of LED lighting is not slow, but brokers still said that Sunshine Lighting's 2013 annual report and first quarter performance of 2014 were lower than expected, and the company faces the risk of LED project progress being lower than expected.
Some people in the industry said that in the lighting industry, Sunshine Lighting is a leading brand, but its domestic sales are not satisfactory, and OEM in overseas markets is still its main source of profit. Currently, Sunshine Lighting is accelerating its transformation from OEM and promotional market models to independent brands.
This transition is obviously not an easy road. According to the industry's bottom-line survey on the performance of Sunshine Lighting's LED market in the second half of last year, Sunshine Lighting's performance in the domestic LED lighting market was average, and a small number of circulating LED lighting products were sold through the original channel network. According to reports from merchants, since the market pricing of sunlight lighting LED products is relatively high, they do not have much advantage in actual operations and are affected to a certain extent by emerging LED brands.
At this stage, the LED industry is in a period of rapid development, and the battle for channels is going on. LED lighting is in a chaotic period where dealers are blind in choosing, products are being updated at a high speed, brands are swarming, and manufacturers of both large and small sizes are mixed. As the leader in China's energy-saving lighting, Sunshine Lighting has accumulated strength in technology, talent, capital, and channels in the traditional lighting era. How to make full use of its advantages, improve its market acumen, and win a place in the industry adjustment with strong enemies in front and pursuers behind is an urgent problem for the company to solve.
2. Monthly Focus (May 22 to June 21, 2014):
The chip market is in short supply and Aoyang Shunchang [-0.84% Fund Research Report] 1 billion to expand production
In the first half of this year, the tight supply and demand situation of LED chips continues. According to feedback from major chip companies and packaging companies, the situation of chip supply exceeding demand is difficult to change in the short term. This has also prompted major chip factories to accelerate the pace of production expansion.
On the evening of June 18, Aoyang Shunchang (002245) announced that the company's holding subsidiary Huai'an Aoyang Shunchang Optoelectronics Technology Co., Ltd. (hereinafter referred to as "Huai'an Optoelectronics") has signed a "Project Investment Framework Agreement" with the Qinghe District Government of Huai'an City, Jiangsu Province and the Qinghe New District Management Committee of Huai'an City, and plans to invest in the construction of LED epitaxial wafer and chip industrialization projects (Phase II), with a total project investment of 1 billion yuan.
Termination of reorganization Qianzhao Optoelectronics [-2.33% Funding Research Report] Xiamen's blue-green light chip project "starts from scratch"
The termination of acquisition and reorganization has added some variables to the prospects of Qianzhao Optoelectronics (300102.SZ), the domestic leader in red and yellow epitaxial chips, to enter the field of blue and green light chips. In desperation, Qianzhao Optoelectronics announced that it would start a new business in Xiamen and purchase MOCVD to produce blue-green epitaxial chips.
Because the parties to the transaction failed to reach an agreement on the relevant transaction terms, Qianzhao Optoelectronics decided to terminate the implementation of the reorganization. At the same time, it announced that it planned to terminate the fundraising project "High-Brightness Quaternary System (AlGaInP) LED Epitaxial Wafer and Chip Project (Xiamen)", and partially changed the fundraising project "High-efficiency Triple Junction Gallium Arsenide Solar Cell Epitaxial Wafer Project (Xiamen)"; it planned to change the original fundraising project "High-Brightness Quaternary System LED" The unused raised funds of 87.7637 million yuan and interest from the "Epitaxial Wafer and Chip Project (Xiamen)" were all invested in the construction of the new project "Blue and Green LED Epitaxial Wafer and Chip".
Tongfang’s comprehensive acquisition of Zhenmingli’s “whitewash exemption” was not approved
Zhenmingli announced that the company’s proposal to provide 1 billion shares to Tongfang Shares [-2.09% Fund Research Report] has been passed by the special shareholders’ meeting, but the approval of the whitewash exemption full purchase offer was not passed, with 68 votes against. .76%, so Tongfang Shares is now considering whether to proceed with the subscription.
According to the relevant acquisition regulations of Hong Kong companies, when a listed company acquires a controlling stake in a listed company and its shareholding increases to a certain proportion, it will trigger a general takeover offer from the Hong Kong Stock Exchange, that is, a tender offer will be issued to small shareholders at the same subscription price. To avoid triggering a full takeover, a "whitewash exemption" needs to be applied for.
According to an earlier announcement, Zhenmingli allotted 1 billion shares to the overseas wholly-owned subsidiary of Tongfang Co., Ltd., equivalent to 106.5% of the existing issued shares and 51.6% of the shares after subscription. The price per share was 0.9 yuan, which was a discount of approximately 50% from the last trading market price of 1.8 yuan before the suspension.
Since the "wash exemption" has not been approved, the subscriber Tongfang Shares is considering whether to proceed with the subscription. Zhenmingli plans to use 900 million yuan of the proceeds from its private placement for the future development of its business scale in China and the global LED lighting market, as well as potential future investment or acquisition opportunities.
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