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LED Industry Recovery For Three And Seven LED Enterprise Value Analysis

- Sep 10, 2016 -

In Taiwan wafer photoelectric increases after the first shot, three star power, photoelectric, countries followed suit, mainland companies such as wooden Tomlinson LED industry into the price recovery period. The personage inside course of study says, after 2015 years in the industry, after the "shuffle" LED chip, packaging prices began to rebound, given the price wars and disorderly competition to become the past, is this round of price recovery will continue and extend to the terminal product areas.


More importantly, under the background of global integration, the LED industry into the capital driven growth stage, open a new round of merger integration. As GE, osram exit lighting and Chinese markets, such as incandescent lamp, China will become the LED industry transfer mainly undertake platform, usher in a new round of development opportunities.

Industry recovery will continue


"Recent price boom maxed LED industry circle, industry significant signs. Wafer photoelectric first price increase in Taiwan, mainland China LED photoelectric followed by leading three Ann will be part of the small and medium size product price increases by 10%; The star light electric decided to display devices all products price increase 10%; Wood Tomlinson decided to display RGB lamp bead prices raised by 5%. In addition, cinda photoelectric and unlisted companies are by high prices for the lamp bead.


In fact, since the second quarter, the LED industry has show the characteristic of stabilization. HuaCan photoelectric, for example, the company said in its annual report in half, due to excessive price decline, since the second quarter the phenomenon of industry product prices have bottomed out.


Raw materials and rising costs have become the main factor of the LED prices. Wood Tomlinson said its prices due to rising raw material prices; Three Ann photoelectric, says prices for gold rose sharply, substrate and artificial cost rise; The starlight electricity price increases due to gold wire and silver stents cost is higher, the sapphire substrate prices sharply higher.


The HuaCan photoelectric President Liu Rong said the price rebound is expected to continue, and continue to the end products. Raw materials such as rising costs is the dominant factor in the LED price, but more importantly, after a period of vicious price competition, the profit space of each section of the whole industry chain have been compressed to the limit, prices become inevitable. As the incandescent light bulb out, people's requirement for the quality of the product promotion, low-quality low-priced competition become a thing of the past times, product prices continued.

Drive a new round of merger and acquisition of capital


Liu Rong emphasized at the same time, under the background of global integration, the LED industry into the capital driven growth stage, stick to the main business of bibcock company will pass more of merger, acquisition and reorganization to achieve bigger and stronger at home and abroad.


Due to industry profits decline, GE, osram LED, samsung and other international giants from lighting market, China will become the LED industry shift to undertake the main platform, is expected to usher in more overseas, high-end market share, and a new round of industrial m&a opportunities.


Everywhere, "based on" screen, LED company cross-border industrial chain upstream and downstream, preempt the tuyere layout double main become fashion. Reporter, VR (virtual reality), sports, culture and entertainment is the favorite tuyere LED co., LTD. In Liu Rong point of view, the LED industry has entered mature period, explosive growth opportunity is running, there will be more with technology and scale advantage of the company to seek more explosive growth industry. To this, the personage inside course of study says, the crossover transformation for industry growth opportunities outside the company to watch.


But Liu Rong more bullish on the intra-industry or merger integration based on industry chain upstream and downstream, "business, manufacturing and customer overlap can form complementary advantages, such as extension based on the screen to the tournament sport, based on the extended to the integrated circuit manufacturing technology." Liu Rong said HuaCan beautiful new photoelectric m&a is based on "LED and MEMS have much in common" positioning: in addition to some general and similar advantages on the production, the new advantages in the field of consumer electronics and automobile electronics helps HuaCan photoelectric growth, while HuaCan photoelectric helps the development and new customers.


It is reported, HuaCan photoelectric yiwu factory building is near the critical stage, early next year into the trial production; HuaCan photoelectric, will have a month to provide LED epitaxy chip 1.3 million pieces, the sapphire substrate nearly 1.6 million pieces of ability, to further consolidate its position in the industry.

Our important time nodes near LED lights replace incandescent lamp out looking to meet peak


On November 14, 2011, the national development and reform commission and other five ministries issued "China to phase out incandescent light bulb roadmap. According to the roadmap, eliminated the last point of the implement of incandescent bulbs will be until September 30, 2016. And since October 1, 2016, our country will ban the import and sales of more than 15 watts and general lighting incandescent lamp, adjustments or midterm evaluation results.


Therefore, China sales roadmap will soon celebrate the important time node, at that time, the relevant state departments will release new policy and incandescent bulbs out measures to further clear for the future.


Our LED lighting costs are coming down, penetration are also constantly improve, leds to replace incandescent lamp is the trend of The Times. According to the calculation, the LED lighting market scale will reach $2016 in 30.5 billion. The personage inside course of study says, in incandescent lamp out important point near and under the condition of energy-saving lamps for years, or will usher in a wave of urban lighting 2016 at the peak of the LED lamp replacement.


According to the roadmap, our country incandescent bulbs out specific steps are as follows:


First stage: on November 1, 2011 to September 30, 2012, as the transition period, the importer, seller shall, in accordance with the notice requirements, prepared to eliminate before work.


The second stage: October 1, 2012, prohibit the import and sale more than 100 watts and general lighting incandescent lamp.

The third stage: October 1, 2014, prohibit the import and sale more than 60 watts and general lighting incandescent lamp.


The fourth stage: on October 1, 2015 to September 30, 2016 for the mid-term evaluation period, to evaluate the early stage of the policy, adjust the follow-up policy.


Stage 5: October 1, 2016, prohibit the import and sale more than 15 watts and general lighting incandescent lamp, adjustments or midterm evaluation results.


Improvement of supply and demand, the domestic LED testing price increase


Demand picks up, the domestic price increase LED sealing test: recently, China's largest chip maker three photoelectric Ann decided to part of the small and medium size product price rise 10%, while cinda photoelectric, ample light electricity and wood Tomlinson is RGB LED manufacturers such as lamp bead prices rise 5%, in the years following the march and pricing after the price adjustment in May for the third time. Instead of 60 w LED bulbs in 2013-2015 average fell 30.74%, 23.36% and 11.59% respectively, instead of 40 w LED bulbs average price down 19.25%, 17.88% and 14.52%, the price in decline significantly slow, especially after 15 years of LED products price after the war, many domestic manufacturers are transformation or reduce capacity, since this year the supply side shrinking and encapsulation scale growth decline, LED industry, the overall supply and demand will be gradually improved, as the raw material costs and labor costs rise, the price adjustment for the LED manufacturers profit improvement.

LED is expected to improve permeability, small spacing or outbreak: global LED lighting permeability in 2015 reached 27%, and maintain the upward trend. We believe that the domestic LED lighting permeability slightly higher than the global penetration level, about 30%, still have considerable space for development. LED packaging market of Chinese mainland in 2015 to $8.8 billion, year-on-year growth of 2%. And 2016 lighting manufacturers to cover the demand of the inventory released, is expected in 2016 China LED packaging market at $9.3 billion, year-on-year growth of 5%. General point spacing is smaller, the number of lights used within a square unit, so the LED small spacing market development has increased the demand of the LED lamp bead, the small spacing LED display has entered the market growth, according to data LEDinside, small spacing LED consumption quantity in 2016 will reach 29 billion particles, small spacing LED consumption in 2021 will reach 189.8 billion particles, the compound annual growth rate as high as 46%, the output value is expected to grow from $2016 in 300 million to $2021 in 800 million, the compound annual growth rate of 21%, the outbreak of the small spacing will further stimulate the demand of the lamp bead, LED industry concentration degree is expected to further strengthen, some leds will eventually yield a consortium.

Outdoor screen, car market is expected to form a new market opportunity: with the improving of the LED display technology, shows the effect of increasing, at the same time LED display technology progress also greatly reduced the operator screen cost, and the late operation and maintenance costs, so the LED display has become the new favorite of outdoor media. And outdoor displays the trend of high resolution, high density also gradually rise, the average distance from P10 to P6 under progress, LED outdoor media screen size of the market in 2008-2014 annual compound growth rate of 31.4%. Outdoor LED consumption quantity is expected from 2015 in 93.6 billion to grow to 2021 in 2021, the compound annual growth rate of 20%. Much starker choices-and graver consequences-in planning, points out that to develop the new energy automotive industry, the domestic auto manufacturers, share will also gradually increase, the current vehicle LED supplier to OSRAM, Lumileds, hon, etc. Car LED lighting market rise as manufacturers provide new market opportunities.


Investment strategy: with the LED industry supply and demand to improve and improve industry concentration, we watch the LED's long-term prospects, "the head Evergrande" industrial logic will benefit related businesses. So we focus on recommend hong god remit, is expected to female net profit in 2016-2018 2.59/3.54/491 million yuan respectively, and the corresponding EPS is RMB 0.73/0.39/0.53 respectively, corresponding to 40/29 / PE 21 times, maintain the company "strongly recommended" rating.


Risk tip: industry competition intensifies, product prices risk, the risk of decline in gross margin.


LED industry eight stocks value analysis


Hon optoelec: renamed hong god send, show car networking strategic ambitions

The company announced plans to change its name to "hong god send".


Proposed renamed hong god remit, reveal car networking strategic ambitions: the company announced plans to change the name of the company and company securities, including the name of the company proposed by the "guangzhou hong photoelectric co., LTD." changed to "group co., LTD. Hong god", company securities referred to as the "hong photoelectric" change for "hong god send". We believe that the company intends to change its name to manifest the company car networking development as the second main determination, follow-up is expected to have more cars networking project fall to the ground. Since the company put forward "LED + car networking" double main strategic goal, on the premise of the LED business bigger and stronger, positive layout car networking industry. So far, the company shares the diener, science and technology plan in guangzhou pearl HangJiao car, at the same time cooperate with specialized investment institutions set up funds invested in car networking industry. The future companies will be a number of ways and means actively in the networking industry layout, strive for the car networking to develop into the second main business.


Expansion has endowment Jiang Xihong, SMDLED: the company also disclosed plans to subsidiary Jiang Xihong capital increase of 417 million yuan. After the completion of the capital increase, Jiang Xihong of registered capital increased from 250 million yuan to 250 million yuan. The capital source of funds is the company just completed set increases, raising the implementation of the project "SMDLED construction project" the body is Jiang Xihong. The capital increase is to further expand SMDLED capacity, will increase the production capacity of 16560 kk each year, nearly double capacity growth. We believe the company capacity expansion for giving full play to the advantages of scale, the fall in prices for low cost, profit growth this year for the company to lay a solid foundation.


Investment strategy: hon optoelec gradually implement advance "LED + car networking" double main business strategy, the company changed its name reveals its ambition of car networking strategy, follow-up is expected to have relevant project to the ground. We expect hon optoelec operating income in 2016-2018 23.72/31.72/4.307 billion yuan respectively, and the corresponding EPS is RMB 0.66/0.36/0.49 respectively, corresponding to 40/29/22 times PE, to maintain the company "strongly recommended" rating.

Risk tip: LED industry competition intensifies, the transformation progress than expected.


Lianchuang optoelectronic: holographic display + tourism performing arts, new experience new opportunities in the future


Lianchuang optoelectronic on June 7, 2016, announcement and pay cash purchase of assets through issuing shares associated business plan (revised), and the plan to sell shares to pay cash to buy nanjing Hahn digital Internet culture co., LTD. (Hahn interconnection) 65% stake in total trade on price of 468 million yuan. Including to pay 65% of the shares trading on price (by 12.75 yuan/shares issued 023.8 million shares), the remaining 35% of the transaction to the price paid in cash (163.8 million RMB). And form a complete set of issuing shares to raise capital of 468 million yuan. A net profit of the company promised after deducting non-recurring gains and losses of 2016-2018 5500/6600/76 million yuan respectively.


From the LED + cable business strategy to upgrade to holographic + mobile development operations, realize the traditional + emerging industries, wheeled strategic objectives. Since the listed company to keep the LED + cable business steady development, because of the domestic LED industry development, industry to expand capacity, product homogeneity is more apparent, low-end application products serious excess capacity, overall economic downward pressure continues to increase at the same time, the LED industry growth is slowing, and application of product market competition. Company intends to holding Hahn interconnected into digital media niche technology solutions for the future sustainable development strategy to add wings. By listed companies have platform, capital, quality brand advantage to support new business development. Integration level, to promote the new and old business coordination at the same time, the company intends to keep the han the independence of the Internet in their business, in order to play the original management team in different areas of the operation and management ability, realize the traditional + emerging industries, wheeled strategic objectives.

65% holding Hahn interconnected, open the holographic multimedia interactive operation + mobile development dual core areas, enhance the company's future competitiveness and profit space. Founded in 2004, han connected mainly focus on digital marketing industry in the two core niche: multimedia interactive digital holographic display and mobile development operations. Two kinds of business model integration of online and offline mobile end multimedia interactive digital holographic display.


Multimedia interactive digital holographic display business: mainly through "holographic" interactive projection technology with man-machine touch interaction technology combined with focus customized digital marketing content holographic projection, holographic sand table, and other products at 360 degrees to form brand customer's brand image. Currently Hahn interconnection for phoenix satellite TV, Siemens, IBM, China mobile, unicom, Greenland group in customer service. In addition, in 2014 China above designated size (3 square meters and above) show a total of 630, the total area of about 45.296 million square meters, the domestic large stock of the exhibition hall of holographic digital interactive multimedia display technology demand is higher. In 2016, according to analysis of China information industry network digital media solutions industry market size will exceed 36.3 billion yuan. On technology application, holographic display technology industry chain constantly improve, field of application from science and technology, the pavilion gradually expand to holographic theaters and holographic theme parks and scenic spots, performing arts programs, for example, in August 2016 will build Leslie cheung VR virtual concert in Shanghai, to achieve "content + operation" mode and enrich the Hahn holographic projection of the Internet industry chain; Its profit model is mainly based on equipment leasing fees charged to the customer, service cost, animation production cost. As of May 2016, multimedia digital interactive Internet Hahn has signed a contract of the holographic display content production business has 17, mainly for science and technology museum, museum, planning pavilion, life experience hall, museum, peak BBS, banquet, conference, etc.

Mobile development operations: as of May 2016, according to data from the China mobile Internet users up to 700 million, the total hours used 31.6 billion hours, video, communications and three types of application tools occupy the market share of 34.7%, 28.4% and 34.7% respectively, the residents' consumption way by mobile terminal gradually changed, and mobile Internet marketing experience services become an important breakthrough of the organic combination of online and offline. Mobile development operation profit is primarily based on Hahn interconnected to provide mobile development to service a full range of solutions. Provide customers with customized enterprise App, provide a comprehensive marketing strategy, to help enterprises to achieve brand image communication, product marketing, customer relationship maintenance, sales, conversion and so on various aspects service to achieve revenue, such as mobile development operation case of Siemens (Siemens home appliance App), zte community (wisdom), huatai securities (huatai securities mobile marketing) platform (economy), economy, culture, etc. As of May 2016, han er of interconnected contracted mobile development operations for 25.


Form a complete set of actual control of people subscribe to raise funds to consolidate control, while leaving the underlying company 35% stake for subsequent incentive stable team. In the raising matching funds raising matching funds 468 million yuan are actual control Michael Dunne yuan to be fully subscribed by the company. To raise funds after the release of form a complete set, Michael Dunne yuan direct and indirect stakes in lianchuang optoelectronic rose to 26.40%, helps to strengthen control of listed companies. Company will raise the matching funds 157 million yuan for holographic concert operation project, 194 million yuan for holographic experience pavilion scenic area construction and operation of projects. Matching funds raising successful company will by self-raised funds first, before the show company in order to achieve, wheeled strategy determination. At the same time the acquisition han interconnected 65% stake, and keep the remaining 35% stake in a subsequent purchase is based on earnings judgment and commercial considerations, and at the same time hope that through share valuations rise, the future earnings growth will spur Hahn interconnected founder shareholders to continue business, ensure the stability of the core team.

The profit forecast and investment rating: coverage for the first time, to "overweight" rating. Assumes that the purchase of assets through issuing shares (23858823) shares and raising matching funds (36705882) shares eventually passed, the company's total share capital will increase to 504 million shares, on the basis of the hypothesis 65% han well connected with and table at the beginning of 2017, 2016-2018, the company is expected to net profit 1.50/2.079/229.4 million yuan respectively, and the corresponding 2016-2018 EPS is RMB 0.46/0.34/0.41, respectively corresponding to 25 July closing price PE 58/48/43 times respectively. Without considering this acquisition under the influence, we expect the company net profit in 2016-2018 1.50/1.65/180 million yuan respectively, and the corresponding 2016-2018 EPS of $0.41/0.34/0.37 respectively. Corresponding July 25 shares PE 58/53/49 times respectively. Considering the holographic technology in areas such as marketing, tourism, the performing arts is more excellent experience huge application prospect, subsequent 35% share purchase expected intense, covered, for the first time to "overweight" rating.


Risk tip: m&a failure risk; Not as good as expected risk industry development; The company business development than expected risk; Integration of risk; Technology research and development risk.


Sun lighting: the Q2 performance to return to high growth, revenue structure optimization

Q2 performance to return to growth, towards a domestic leading LED lighting


The company forecast in the first half of 2016 attributable to shareholders of listed companies net profit year-on-year growth of 10% ~ 40%, to 1.96 ~ 250 million yuan; Corresponding 16 q2 quarterly belonging to shareholders of listed companies net profit of 0.96 ~ 149 million yuan, up 17% ~ 82%, the company in the 16th q2 to return to high growth.


Income structure optimized constantly, LED lighting sales of ascension


To return to growth in the second quarter of the company, our judgment on the one hand is due to the LED lighting is still to maintain high growth, on the other hand the company automation rate increase and economies of scale reduce overall fee rates, exchange gains and losses at the same time have a positive impact on the company's net profit. 15 years LED lighting company revenue has accounted for 74%, this year will continue to ascend. Slow cut prices at the same time, along with LED lighting, LED lighting industry competition is expected to usher in to a good trend.

Earnings forecasts and recommendations


Company is quality is good, stable domestic LED lighting leading enterprises. Overseas customer orders to keep growing, client development and accelerate their own brands to build, driven by the company will continue to maintain steady growth in the future. We expect the company 16 ~ 18 year EPS is RMB 0.52/0.33/0.41, respectively. We are optimistic about the company's future long-term development, give the firm a "buy" rating, continue to recommend it.


Risk warning


The boom of the LED industry is less than the expected risk; The risk of LED products prices fell sharply; The risk of raw materials prices rose sharply.


Ann photoelectric three: introduction of professional investment partners, to speed up the industrial layout

On May 23, 2016, the company released "three Ann photoelectric co., LTD., established foreign investment to participate in the investment management company's announcement, and the national integrated circuit industry investment fund, sets up the Ann in fujian jinjiang AnYing investment fund joint core investment management co., LTD. In addition, according to German Aixtron announcement, semiconductor and machinery company agreed to the proposal FujianGrandChipInvestmentFundLP.


Ann core fund size is larger, the key to III - V compound semiconductor integrated circuit. The established Ann core funds target size of 50 billion yuan, the current scale of 7.51 billion yuan, the key support III - V compound semiconductor field design, manufacture, testing, materials, equipment and application, will support the three group and Ann photoelectric or its associated companies in domestic and overseas mergers and acquisitions, new technology research and development and the construction and expansion of the business such as production line.


The introduction of professional investment partners, to speed up the industrial layout. The three Ann photoelectric, IC industry fund, jinjiang AnYing investment 12 million yuan, 12 million yuan and 6 million yuan respectively, accounted for 40%, 40% and 40% respectively. This investment management company partners with the introduction of professional investment management experience and perfect the system of risk control, will improve the level of the fund's investment decisions, for the sustained, rapid and healthy development of the company offers a variety of resources security, good operation will help to speed up the company's fund industry chain layout, further enhance the core competitiveness.

Investment fund buying Aixtron in fujian province, has a certain degree of synergistic effect to the company.


Aixtron MOCVD equipment is one of the leading manufacturers in the double, belong to the leading international subdivision of semiconductor equipment manufacturers, the investment funds of fujian province is 50% premium to offer. MOCVD equipment is not only used for the LED epitaxial wafer production, is also a GaAs, GaN epitaxial wafer production of integrated circuits, one of the necessary equipment and the development direction of three Ann photoelectric a certain degree of coordination.


Main business continued positive! After partial assembly house prices in March, wafer photoelectric chips also have to raise prices, if prices become the industry's consistent action is subject to subsequent validation, but it at least showed that the trend of decrease in the prices of the LED chip is in moderate to gradually stable. Business, the company continued expansion of the LED chip production capacity, the LED lamp will quickly peatlands, realize the scale of hundreds of millions of GaAs chip this year big probability of income, optimistic about the company to maintain high-speed growth this year.


Risk tip: systemic risk, fund projects, not exceeding the expectation"

The star light electric: display device price increase, and the distance between the LED production volume two


LED companies display encapsulation, chip prices rise again


We learned through public information, in September the starlight display electronic devices (all products price will be increased by 10%. At the same time other domestic each big business enterprise of LED chips, LED companies also improve the price of LED products.


Raw material prices + market demand driven wheel lamp bead price increase


From the supply side, the star light electric main reasons this round of price increases have 2 points: 1) the supply side contraction + sapphire substrate prices upstream from the LED chip prices rise; 2) LED encapsulation materials, gold and silver and support costs. From the demand side, small spacing LED market continues to boom, center daily news revealed 6 listed screen enterprise performance is all red, small spacing is a major catalyst screen to the growth of enterprise performance. According to the forecast, with small spacing market demand improve + lamp bead density per unit area, 2016, 29 billion particles small spacing LED lamp bead market demand, to 2021 small spacing LED lamp bead consumption will reach 189.8 billion particles, encapsulation of lamp bead compound annual growth rate as high as 46%.


Small spacing expansion has LED encapsulation, both production and marketing will flourish to maintain high growth

Company twice this year already small spacing LED encapsulation, especially the second round on May 240 million expansion is mainly aimed at a small distance between the LED. According to the current capacity conversion company small spacing LED encapsulation, share of over 20%, in the domestic first, second only to Taiwan light-years away. The current order, there are still expansion is expected in the second half. Small spacing value of about 250 million last year, this year already + 100%, according to the current prices this year capacity or small spacing can realize the growth of more than doubled. Small spacing LED technology advantage prominent (0606 in the development, production 0606), the price advantage obviously, expected future market share is expected to further enhance. In addition the company constantly enrich product mix, high-end market positioning, outdoor 1921 size series is the world's smallest size outdoor small spacing, fill in the blank of outdoor P4 hd display area below.


Risk tip: small spacing or less than the expected market demand; The market price decline in risk.


Australian foreign shun cheong: LED chip prices rebound, accurate capacity expansion outbreak

LED chip prices rebounded, intense reshuffle after the improvement of relations between supply and demand


Companies generally appear 5-10% price increase. Global LED photoelectric chip giant Taiwan wafer in May this year was more than 15% for some products to raise prices. Domestic leading LED chip three Ann photoelectric also sent a letter on August 25 in view of the small and medium size product prices to rise by 10%. Downstream packaging field, the absolute leading domestic wood Tomlinson also plans on September 1, an increase in the price of display RGB lights, 5%, and also, cinda photoelectric also at the same time, an increase in the price of RGB lights, 5%. In addition to the above, these companies also rise in price of LED industry chain related companies has HuaCan photoelectric, the starlight, AnPuGuang, TRW photoelectric and so on. Industry generally rise in price.


After intense shuffling supply-side obvious shrinkage:


1. The early stage of the extensive expansion lead to overcapacity, price war sparked intense reshuffle, backward production capacity.

LED industry due to the policy a few years ago and subsidized capacity expanding rapidly. According to GLII statistics show that in 2009-2014, the domestic LED epitaxy chip MOCVD equipment grown from 130 to 130, growth in super 8 times. During the 1000 sets of new MOCVD most got place for each 8 million yuan to 10 million yuan of subsidies. Extensive expansion, leading to excess production capacity, triggering fierce price war. 2013-2015 to replace 60 w incandescent lamp LED bulbs average decline reached 30.7%, 23.4% and 23.4% respectively, instead of 40 w incandescent lamp LED bulbs average decline reached 19.3%, 17.9% and 17.9%, respectively. The chip market is more competitive, chip prices dropped by almost 30% in 2015, and 2016 1 quarter still continue downward trend. After a few years, especially after the price war 2015, the domestic many smaller and low profitability of companies transition or reduce capacity.


2. Subsidies canceled, new equipment investment is larger, the new capacity.

In subsidies in 2015, after the new production line of the machine into become very big, the price of single MOCVD amounted to 20 million yuan, many enterprises are not able to bear. According to the global MOCVD leading manufacturer Aixtron and Veeco (two companies accounted for more than 90% of the world share) only about 30 orders at present so far this year, compared to 2015 and 2014, the world's 2015, 228 units of MOCVD shipments, new capacity.


Display and lighting industry booming, downstream demand side is still strong:


1. LED display related company performance is good, the sustained high growth


Global LED display the size of the market in 2015 reached 2015 yuan. With China market reached 32 billion yuan, 23% growth in 2014 compared to the same month. And according to the OFweek industry center is expected that by 2020, the domestic market will be more than 80 billion yuan, an average annual compound growth rate of 20.1% for five years.


Among them, the LED display in recent years, the meteoric rise of the small spacing together since it has no seams, display effect is good, the cost is falling fast, long life and other advantages, has gradually replace DLP screen splicing display, etc. Related small spacing according to enterprise growth performance significantly. According to the data show that in the first half of 2016, Abby's small spacing display implement written about 230 million yuan, an increase of about 65%. Chau Ming technology product revenue grew 64%, small spacing orders rose by 77%. Leah, small spacing hd display order to soar, has exceeded 1.1 billion yuan, rose more than 100%.

Estimates, 2016 small spacing LED will reach 29 billion, the number of consumption as the encapsulation material gradually implement localization, cost down further, and the permeability ascend small spacing LED display. Is expected to reach 189.8 billion by 2021 its consumption, the compound annual growth rate as high as 46%. Output is expected to grow from $2016 in 300 million to $2021 in 800 million, the compound annual growth rate of 21%.


Only 3 to 2. LED lighting permeability, the space is still large


Downstream of the LED lighting is the main application market, according to the first LED net data, roughly accounted for about 69%. According to DIGITIMES data, the global LED lighting market scale has grown significantly in recent years, from $2009 in 1.75 billion, grew to $2015 in 29.9 billion, during the compound annual growth rate of 60.5%. But its permeability is still not high, only 27.2% in 2015. Therefore, its growth space is still huge.


And in the near future, according to China's national development and reform commission (NDRC) and five ministries released in November 2011, "China to phase out incandescent light bulb roadmap, eliminated the implement of incandescent lamp at the end of the pilot is on September 30, 2016, October 1, will ban the import and sales of more than 15 watts and general lighting incandescent lamp. In the important time points near and energy-saving lamps popularity of incandescent lamp out the case for many years, our country city lighting or will usher in a wave of replacement LED the boom.


Benefit from the global to phase out incandescent light bulb and LED lighting products prices falling, the global LED lighting is expected from about 30% to further enhance the permeability. China as the world's 80% yield of LED lighting products production base, the future is expected to benefit from the LED lighting permeability increase significantly.

The LED industry concentration will continue to improve, will significantly benefit from good company


Since 2015 industry mergers and acquisitions are apparent. According to incomplete statistics, Aladdin news center in China in 2015 LED industry merger integration, 1 November 2015, the Chinese LED industry mergers and acquisitions amount to 40.8 billion yuan, with 53 cases. One big acquisition case, m&a case number $39, accounting for more than 73.6%. Also have 6 its cross-border m&a, mergers and acquisitions amount is 22.8 billion yuan, accounted for 55.9%. This year, m&a is still hot, a lot of LED lighting companies began to horizontal or vertical mergers and acquisitions, many enterprises will be beyond the realm of money to the LED such as Internet, media, sports and other transformation development. At the same time, overseas industrial chain integration of m&a is not in the minority, such as HuaCan photoelectric subscribe South Korea co., LTD SemiconLight, leah's acquisition of flat of electronics, three americans photoelectric merge America MFLX huanyu communication semiconductor, dongshan precision fitting m&a and so on. The overall industry mergers and acquisitions, industry concentration is expected to promote quickly in the future.


Top industry occupied the main market, the scale effect of strong profitability is expected to remain strong constant strong momentum. Chip manufacturers, for example, according to the first LED network data, the top five chip manufacturers domestic city has reached to 67% share in 2014, and is expected to reach 71% in 2015. Its top is expected to pass the scale effect of manufacturers, keep the stronger profitability. And the price, for large manufacturers, can be split by the amount of purchase chips price gap, but small businesses don't have the strength to accept the price increases in the cost of production. Whole, chip area is expected to continue strong, stronger, industry concentration is expected to further enhance.

Company strong profitability in the LED chip was proved that the second phase of production precision on the follow-up is expected to benefit the industry to improve quickly


High cost control ability was proved, is the company's core competitiveness.


Australia the shun cheong "internal corporations" management system innovation ability, good cost control has been obtained in the field of metal logistics distribution and the LED chip. Metal logistics distribution under the condition of the industry as a whole confined, gross margin can still maintain sustained growth, net interest rates once 2 times more than competitors (industry about 1-2% on average, about 5-6%). LED chip in 2015 also won a 33.1% gross margin, after leading three photoelectric Ann. In the first half of 2016 due to the drag in the first quarter, second quarter, although there are 15-20% gross margin, but LED the overall gross margin of 10.9%, year-on-year decline. But already back to more than 20% in the third quarter, is expected to follow-up with the industry as a whole, operating situation has improved significantly.


LED phase ii plans to expand 3 times, grasp the time node rapid expansion. The early stage of the company has been through the issuance of convertible bonds to raise 510 million yuan, because the industry is not clear, delayed the production schedule. Industry operating situation in the third quarter after thawing, actively pushing forward the construction of the second phase capacity has now purchasing equipment, plans to expand capacity equivalent to 1. 3 times, when the capacity will reach 800000, significantly increase. Old machines for the new machine is used compared to other competitors have significantly higher cost performance, profitability is expected to follow-up security products is expected to gradually manifests its competitiveness. Due to the early stage of the company has mature MOCVD equipment debugging and production experience, production capacity is expected to fast, gradually put into production at the beginning of next year.


The company core business of traditional metal logistics distribution proportion of auto parts is expected to continue to improve, steady growth. LED business bottoming out, timely expansion is expected to benefit fully industry recovery next year; Ternary lithium electricity business next year 3 times otherwise than the current capacity on the looms, and over half of the remaining share purchase forecast. Company short-term earnings growth or stressful, but next year will mark, is worth looking forward to. 16 to 18 years it is expected that the company net profit of 486 million yuan / 234/396, 0.41/0.50 EPS0.24 / yuan, corresponding 16 and 18 years of PE respectively 45 27 x and x, 22 x, maintaining a "buy" rating

Snow Wright: hand in hand to senior team layout of machine vision, unmanned aerial vehicle (uav) dark horse at the beginning of ambition


Company's announcement, subsidiary manta intelligent offered 51000 yuan and Hu Jinhui, jinlong, guy chardon joint venture set up in shenzhen manco artificial intelligence technology co., LTD. (tentative), manta intelligent 51% stake.


Hand in hand with the domestic senior team layout of machine vision, intelligent unmanned aerial vehicle (uav) as a significant step.


Aimed at forming a new company to machine vision, image processing as the core of artificial intelligence team. Participation in the natural person, Hu Jinhui, Jin Longjun for tour company (UCVR) senior core, in the aspect of image processing, machine vision has profound research and experience.


Machine vision is to use machines to replace human eyes do measurement and judgment, absorb images by computer to simulate human visual function, and realize the extension of the human eye vision. It includes imaging, awareness and understanding of three parts, is one of the important frontier of artificial intelligence.


Intelligence is one of the main development trend in unmanned aerial vehicle (uav), and machine vision is the necessary premise of intelligent and also difficult to be technological breakthroughs. In the first half, leading the industry in xinjiang innovation have preliminary elf 4 machine vision function, amazon, Intel also successively acquisition machine vision team.

Manco will speed up the company in the short term, shenzhen drones in visual tracking, face recognition, obstacle avoidance, and other functions on the upgrade complete; In the long term, manco will be in the field of artificial intelligence such as environment modeling, cognitive in-depth exploration, for the future to realize autonomous flight, unmanned provide technical reserves.


Manta intelligent S6 has debut in August. With new chip architecture (qualcomm platform) as the foundation, with independent research and development of the underlying system and technological advantages, S6 under the beautiful beautiful body not only realizes the perfect camera function, also expand more play. We think ahead at present almost all competing goods S6 'comprehensive quality, to let more people feel the fun of unmanned aerial vehicle (uav), is expected to become the first phenomenal portable unmanned aerial vehicle (uav) products.


Emerging business such as unmanned aerial vehicle (uav) gaining momentum, watch the company long-term development prospects:


Based on "light", "health" theme makes the whole series of light technology, brand and sales channel construction is expected to be paid off; With the fushun photoelectric, open the LED related application of the new space.


Holding manta intelligent unmanned aerial vehicle (uav) research and development strength, r&d investment is large, abundant capacity. Portable product S6 have been released in August, or will become a phenomenal product take blue ocean market.


Established "endogenous growth and extension development" model of development, the future is expected to continue to revolve around consumer electronics, new energy vehicles industry chain upstream and downstream integration expansion capital.


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