More than 20 years later, the market exploded and the three Japanese scientists who invented the blue LED finally won the Nobel Prize.
On October 7, the 2014 Nobel Prize in Physics was awarded to Akasaki Yuki, Amano Hiroshi and Nakamura Shuji. They successfully cultivated gallium nitride crystals for manufacturing blue LEDs and realized the industrialization of blue LEDs, which changed the way of lighting in the world.
White LEDs require a combination of red, green, and blue LEDs, among which blue LEDs are the last difficulty in synthesizing white LEDs. Today, LED has become a new generation of lighting products after incandescent lamps and fluorescent lamps, which consume less power, have a longer life span, and are more environmentally friendly.
This year, the global penetration rate of LED lighting will reach 20%, and the popularity will continue to accelerate. The penetration rate of LED lighting in the Chinese market is expected to exceed 70% in 2017. The Nobel Prize Committee said in a statement: "Incandescent lamps illuminate the 20th century, and LED lamps will illuminate the 21st century."
In the year of popularization of LED lighting, the blue LED inventors are inspiring to receive awards, and the best opportunity for industry mergers and acquisitions is now in China, the world's largest LED production base.
M&A boom
On the evening of October 13, Hongli Optoelectronics (300219.SZ), a well-known domestic white light LED packaging company, announced that it plans to spend 170 million yuan in cash to acquire 100% of the shares of Shenzhen Smed Co., to consolidate its leading edge in the white light LED packaging field. This is just one of many LED M&A cases in the past two years.
At the end of 2012, BDO Runda acquired 20.05% of NVC Lighting's equity for HK$1.654 billion, which opened the curtain on mergers and acquisitions. Since 2013, according to the statistics of Gaogong LED Research Institute, the number of mergers and acquisitions in the domestic LED industry has exceeded 100.
Among these mergers and acquisitions, the larger ones include: Sanan Optoelectronics acquired a 20% stake in Taiwan's Canyuan Optoelectronics for NT$2.352 billion, becoming its largest shareholder, and a wholly-owned acquisition of Lumen Corporation of the United States for US$22 million; Feilo Acoustics Acquired Beijing Shen'an Investment Group for 1.59 billion yuan, cutting into the field of LED packaging; this year, Tsinghua Tongfang acquired a 52% stake in Hong Kong-listed Zhenmingli with 900 million Hong Kong dollars, opening up downstream outlets to the sea.
As of September 2014, the number of domestic LED companies exceeded 15,000, with homogeneous products and fierce price competition.
"Now is the best time for mergers and acquisitions," Zhang Xiaofei, chairman of the Gaogong LED Research Institute, told the reporter of China Business News that LED general lighting is in the golden development period, and the penetration rate in 2017 will exceed 70%.
Compared with international giants, Chinese companies are relatively small. Take the following mobile terminal product companies as an example. In 2013, the sales scale of Philips, GE, and Osram were 11.44 billion U.S. dollars, 8.3 billion U.S. dollars, and 7.19 billion U.S. dollars. Sunshine's 2013 revenue was only 620 million U.S. dollars, 550 million U.S. dollars and 520 million U.S. dollars.
"Enterprises have sufficient orders, but profit margins are declining." Zhang Xiaofei said that the LED industry is in a period of rapid integration, and more and more companies will be merged, acquired and eliminated.
He predicts that in the upstream LED chip field, the top five sales in 2012 will account for 40% of the market share, and this year and next year will account for more than 50%. "Bigger Evergrande, small and medium-sized enterprises will withdraw within three years, the profitability of large enterprises Will be promoted". In the fields of midstream packaging and downstream terminals, small companies are becoming more and more difficult to do, and large companies will continue to promote industry restructuring.
"There are about 700 LED companies lining up for IPO, and the long road can not afford to wait." Zhang Xiaofei said that domestic listed companies, state-owned enterprises, and well-known private enterprises are "rich owners and high enthusiasm for mergers and acquisitions"; the best opportunity for mergers and acquisitions is only 1 In ~2 years, "the peak of next year and the end of the year after"; and the demand for M&A in the LED industry is only in the hundreds, so it is necessary to quickly "make a shot" to "see the eye".
The faucet is emerging
With intensified competition and advancement of mergers and acquisitions, a number of leading companies have emerged in China's LED industry in the fields of chips, packaging, lighting and displays.
Sanan Optoelectronics, Dehao Runda, Tsinghua Tongfang, Huacan Optoelectronics, etc., are leading in the field of LED chips. In the first half of 2014, Sanan Optoelectronics' sales revenue was 2.177 billion yuan, a year-on-year increase of 30.03%; net profit was 666 million yuan, a year-on-year increase of 43.87%; BDO Runda's revenue was 1.935 billion yuan, a year-on-year increase of 42.98%, but net profit fell by 23.36% To 38.725 million yuan, mainly because the price of LED chips fell. Recently, Wang Donglei, chairman of the "double material" of BDO Runda and NVC, had a dispute with Wu Changjiang, the former CEO of NVC, in order to truly open up the channel for upstream and downstream cooperation.
Jiang Guangjun, deputy general manager of the Zhenmingli Domestic Center appointed by Tsinghua Tongfang, revealed that after Tongfang acquired Zhenmingli, all the cadres above the middle level of Zhenmingli came from Tongfang. Next, Zhenmingli’s product line will focus, “only 20 models will be made this year, and even 10 models next year”; in the next two years, we hope that Tongfang’s LED chips will be introduced into Zhenmingli’s products.
In the field of packaging, Hongli Optoelectronics, National Star Optoelectronics, Ruifeng Optoelectronics, Jufei Optoelectronics, etc. are relatively well-known companies. However, Zhang Xiaofei believes: "The midstream is relatively fragmented and there are a lot of companies. Prices will fall, the scale of the industry is expanding, and technology is also improving. Some companies have already started to flee."
In the first half of this year, Hongli Optoelectronics increased its revenue and profit, but its gross profit margin was declining. Zhang Xiaofei joked: "Even Gong Weibin (the boss of Ruifeng Optoelectronics) can't sleep, and we should play ball to relieve the pressure." The battle in the future will be fierce, and it is recommended that mergers and acquisitions between industries be carried out.
The downstream is divided into two sectors: lighting and display screens. There are 7 major listed lighting companies in the statistics of Gaogong, including NVC Lighting, Sunlight Lighting, Foshan Lighting, Yaming, Kingsun Optoelectronics, Jiawei Co., Ltd., and Snow Wright. The revenues of these seven companies have been growing rapidly in recent years. In 2013, their revenues totaled 13.785 billion yuan, a year-on-year increase of 14.4%; in the first half of this year, their revenues totaled 6.835 billion yuan. Oppu, another well-known lighting company, is preparing for an IPO this year.
There are mainly four listed display companies, including Unilumin, Absen, Leyard, and Lianjian. Their total revenue in 2013 was 2.882 billion yuan, a year-on-year increase of 23.5%; the total revenue in the first half of 2014 was 1.668 billion yuan. As the growth rate of display screens is lower than that of lighting, diversification is imperative. Unilumin Technology acquired Shanghai Hanyuan to promote the O2O (online and offline integration) sales model; Lianjian Optoelectronics spent 1.81 billion yuan to acquire Timeshare Media and Friends. Expanding public relations and Easystar, transforming into an outdoor media group.
Benefiting from large-scale expansion such as production expansion and acquisitions, the gross profit margin of terminal enterprises has rebounded. For example, Sunlight's revenue in the first half of this year was 1.524 billion yuan, with a gross profit margin of 22.9%, which was higher than last year's 20.7%; Unilumin Technology's revenue in the first half of this year was 446 million yuan with a gross profit margin of 29.7%, which was higher than last year's 25.4%.
The next step is intelligence
In the future, intelligence will be the development direction of LED lighting.
In June of this year, Apple launched HomeKit, a smart home management application. The list of cooperation includes lighting manufacturers Philips and Cree. "China Business News" reporter learned that Philips has launched the intelligent LED decorative light system Hue.
