With the rise of mergers and acquisitions, the integration and upgrading of the LED industry is imminent

Continuing the enthusiasm for integration in 2014, M&A integration in the LED lighting industry continued to ferment in 2015, setting off a new round of "M&A wave." Up to now, there have been more than 25 mergers and acquisitions cases in the LED industry, with a scale of nearly 30 billion yuan. Industry insiders said that with the withdrawal of a number of small and medium-sized enterprises, the concentration of the LED industry will further increase in 2015, and leading enterprises with technological advantages and scale effects will stand out in the industry competition. At the same time, for small and medium-sized enterprises, differentiated development may gain greater living space.

Another "wave of mergers and acquisitions"

"In the first half of this year, the LED industry saw a wave of mergers and acquisitions, not only horizontal integration and vertical extension, but also 'cross-border' acquisitions, a wave of mergers and acquisitions The reshuffle of the LED industry is accelerating, and a large number of small and medium-sized enterprises have withdrawn from the market, while some large companies with technological advantages and scale effects have stood out in the industry competition, and the industry concentration has further increased," He Zaihua, a senior researcher at China Investment Consulting, told this reporter.

As of the middle of the year, more than ten mergers and acquisitions have occurred in the LED industry, industry resources are increasingly concentrated, and the LED industry is accelerating the survival of the fittest. For example, in June, Unilumin Technology acquired 40% of the equity of Radioo, achieving 100% control of Radioo; Lianchuang Optoelectronics acquired and increased capital of Zhejiang Fangda Intelligent Control Technology Co., Ltd. for 100 million yuan, and will hold 72.37% of the equity of Fangda Intelligent Control; Alto Electronics plans to acquire 100% of the total equity of Qianbaihui for 250 million yuan to increase the scale of its LED lighting business. In July, after acquiring 81% of the equity of Mingji Electronic Technology Beijing Co., Ltd. for 162 million yuan, Leyard increased its capital to control 55% of Pinneng Optoelectronics Technology Shanghai Co., Ltd. with 27 million yuan. It is worth mentioning that as early as early January, Leyard announced that it planned to acquire 100% of the shares of Lifeng Culture and 100% of the shares of Jinlixiang for 890 million yuan. Through this merger, it will make efforts in the field of LED cultural media.

Observations have noted that from the second half of 2014 to the first half of 2015, horizontal mergers and acquisitions were very intensive, which means that the industry has shifted from incremental competition to existing competition. In the case of horizontal mergers and acquisitions, listed companies have made efforts to acquire some companies with advantages in segmented fields, especially in the LED display field, such as Leyard's acquisition of Jinlixiang, Unilumin Technology's acquisition of Lamp Technology, Lianjian Optoelectronics' acquisition of Easystar, etc. The acquired companies have a large share in the market segments.

In this regard, industry insiders believe that the purpose of LED listed companies acquiring companies of the same type is to reduce competitors, expand their original market share, or target market segments to tap larger market space.

Jingyuan Optoelectronics general manager Zhou Mingjun once said that now, the integration and reshuffle among enterprises in the LED industry chain are accelerating, and domestic LED downstream manufacturers have begun to fully integrate mergers and acquisitions. The LED industry can only continue to move forward through continuous mergers and acquisitions.

The LED industry will continue to grow at a high rate in the future

In the LED market where industrial capital is constantly being injected, mergers, acquisitions, reorganizations and industrial upgrading will further increase industry concentration. The technological advantages and scale effects of leading companies will also gradually become prominent in the integration. The LED lighting landscape is quietly undergoing huge changes.

Recently, Absen made it clear during institutional research that the LED display industry has been accelerating in recent years, especially in the past two years, and mergers and acquisitions have been accelerated by various listed companies. In the future, the industry will tend to be more concentrated in competition between a few large companies, making it difficult for small companies to survive. Differentiated development or targeting market segments may gain greater room for survival.

He Zaihua said: "In the future, the LED industry will continue to mature. The industry will face in-depth adjustments. The integration and reshuffle among enterprises will accelerate. Domestic LED downstream manufacturers have begun to fully integrate mergers and acquisitions."

However, in He Zaihua's view, the biggest problems in my country's LED industry are: the large number of LED companies and the lack of order in market competition; serious product homogeneity and lack of innovation.

In this regard, Leyard Chairman and General Manager Li Jun said at the Leyard 20th Anniversary Celebration and New Product Strategy Conference held on September 10 that the company must adhere to the innovation-driven development strategy in the future and focus on two major aspects: business model innovation and Leyard concept innovation. "Leyard will not only be a market leader in the LED industry, but more importantly, it will use technological innovation to drive the healthy and sustainable development of the entire LED industry. We hope to promote Leyard's rapid development with innovative growth through the three major strategies of 'main business + investment and mergers and acquisitions + PPP model'. ”

He Zaihua suggested that in the face of this trend, companies should first strengthen their innovation capabilities and cultivate product core competitiveness; second, they should focus on market segments and improve product quality; third, they should improve product production efficiency and reduce corporate production costs.