Weekly reviews|23 LED companies have a large area of ​​"floating red" Leading companies are more "eye-catching" in the future?
Huacan Optoelectronics has made a significant investment of 10.8 billion yuan in semiconductor devices, signaling the potential for deeper integration within the chip industry. Meanwhile, GE is stepping back from its overseas lighting business, marking the decline of a once-dominant lighting giant. Changfang Group managed to turn losses into profits in 2017, but what lies ahead for the education sector? Additionally, the performance of 23 LED-listed companies has been mixed, with some showing growth and others struggling. Let’s take a closer look at each of these developments.
Huacan's 10.8 Billion Yuan Investment in Semiconductor Devices
In February, Huacan Optoelectronics announced an agreement to invest in the "Huacan Optoelectronics Advanced Semiconductor and Device Project" within the Yiwu Information Optoelectronics High-tech Industrial Park. The project plans to invest a total of 10.8 billion yuan. This marks another major move by a Chinese LED company into the semiconductor field, following Sanan Optoelectronics' massive 33.3 billion yuan investment in compound semiconductors and integrated circuits.
The chip industry has become a hotbed for capital investment. From Sanan to Huacan, and now Ganzhao, major domestic LED chip manufacturers have poured significant resources into this sector. According to GGII, Chinese chip companies are expected to expand production over the next two years. However, as new capacity comes online, supply may exceed demand, leading to price wars and a new wave of industry consolidation.
GE Sells Off Its Lighting Business
Recently, GE confirmed the sale of its lighting operations in Europe, the Middle East, Africa, and Turkey, along with its global automotive lighting business. This follows GE's earlier decision to sell its consumer lighting division last year. Despite multiple attempts, GE had struggled to find a buyer for its lighting business until now.
GE, once a powerhouse in the lighting industry, has seen its influence wane significantly. While it still holds a market presence, especially in North America, its exit from the lighting sector opens up opportunities for Chinese LED companies to step in and capture more market share.
Changfang Group Turned Losses into Profits in 2017
Changfang Group released its 2017 annual report, reporting operating income of 1.75 billion yuan, a 9.22% increase compared to the previous year. It also turned a net profit of 36.238 million yuan after suffering a loss of over 60 million yuan in 2016 due to industry challenges.
The company managed to recover by acquiring Kang Mingsheng and exiting the off-grid lighting business. However, its education segment did not perform well, resulting in a loss of 4.48 million yuan. While the education sector shows promise, entering unfamiliar areas without strong resources and management capabilities can lead to failure.
Performance of 23 LED Listed Companies
Between February 27 and 28, 23 LED-listed companies released their 2017 financial reports. While five companies, including Jufei Optoelectronics and Meida Digital, reported declining profits, most of the remaining companies showed growth.
According to GGII, China’s LED industry reached 636.8 billion yuan in 2017, growing by 21% year-on-year. The upstream chip sector saw rapid growth, while midstream packaging and downstream applications maintained steady expansion. With a projected compound annual growth rate of 18% from 2018 to 2020, China’s LED output value is expected to surpass 1 trillion yuan by 2020.
As the industry continues to consolidate, high-quality enterprises will likely see stronger performance in the future.
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