Two years ago, on the occasion of the whole industry of LEDs, Huacan did not count the cost to expand against the market, and finally "save the cloud to see the moon." Now, not to extend the attitude of the upstream and downstream of the industrial chain, the intention to maintain customer relationships, and more importantly, it is looking for a "different" road.
The LED industry is picking up. According to the data of the mid-year report, the total operating income of the 22 LED listed companies in the first half of 2014 was 11.62 billion yuan, a year-on-year increase of 32%; the total profit was 1.79 billion yuan, a year-on-year increase of 31%. The headlines of the media have turned into "the best way for the LED industry to usher in history."
The LED industry was quiet for two years. After the investment wave in 2010 and 2011, the trough and overcapacity came face to face, the price of chips went down all the way, and many investment projects failed.
The companies that survived the harsh winter and survived almost ushered in spring blossoms. The whole industry presents a situation of rapid growth in domestic and foreign markets and huge market demand.
In the upstream of the LED industry chain, Huacan Optoelectronics, which made epitaxial chips, had a net profit of 74.82 million yuan in the first three quarters of this year, a year-on-year increase of 739%. In addition to the industry recovery, what is the mystery behind the “growth kingâ€, which was still in a loss-making performance last year? Is this growth sustainable? Is there any possibility that the LED industry will repeat the same mistakes in the future, and once again, it will fall into a trough after rapid development? Recently, Hua Can Optoelectronics' director, vice president and secretary-general Ye Aimin accepted an exclusive interview with reporters at the ceremony of the "First China Listed Companies' Value List" in Suzhou.
Huge profit growth mysteries <br> <br> Ye Aimin honest, rapid growth performance of the most direct reason is the low base last year.
Different from the traditional company's creation mode, Huacan Optoelectronics was founded in the form of venture capital. Ye Aimin said that in the years before going public, the company will conduct a round of financing every other year or so, and then expand the production. During the IPO reporting period, due to the preparation for listing, it is necessary to maintain the stability of the shareholder structure. Therefore, in 2011 and 2012, the company did not have a large-scale expansion.
After the listing in 2012, the company established a large wholly-owned subsidiary in Zhangjiagang with the funds raised. At that time, the entire LED industry was in a stage of collective commitment and overcapacity. Ye Aimin said that their confidence in counter-market expansion comes from a rigorous pre-judgment of future market demand. "We are looking at the long-term. After 5 or 10 years, the company's epitaxial chips are in a global position. Our goal is to be the top three in the world. Therefore, we will not make small moves for the short-term high performance."
Like the "squat" action before running, it will help the upcoming run. Huacan Optoelectronics’ operating profit last year was a loss. “In order to build the Zhangjiagang plant, we have built a new 4-inch production line. We only used a 2-inch production line. For the purpose of commissioning and R&D, the production line of the parent company was transformed, and the production capacity of the parent company was also affected.â€
Last year, with the completion of the infrastructure of the Huacan Optoelectronics Zhangjiagang project, capacity expansion, market position and profitability both doubled, and the company's profits, especially operating profits, increased significantly. “Since the second half of last year, the LED market has recovered, but only we have new capacity. Zhangjiagang’s production capacity is twice that of the Wuhan parent company, which is equivalent to three times the original capacity.â€
Indeed, the prosperity of the LED industry has rebounded, and many companies have “reversed the storyâ€, from overcapacity to capacity expansion.
LED, markets are changing <br> <br> market is always changing, LED market, there is no overcapacity situation may arise again it?
Ye Aimin believes that the capacity expansion in 2010 and 2011 is essentially different from the current situation. First of all, the last expansion, the level of the entire LED epitaxial chip industry in mainland China, is far from the overseas companies such as South Korea. Moreover, the expansion at that time was only for the Chinese mainland market. Everyone is used to "a swarm of bees" on the ground. At that time, there were sixty or seventy items to be put on, and each project thought a lot. Overseas competitors still have to "divide food", the market for digesting production capacity is limited, and a little expansion will pass.
Ye Aimin said that the difference is that from the technical level and the competitiveness of products, we have already crossed the border, and the world has begun to accept chips from the Chinese mainland. On the export side, we have replaced the same type of products in Korea and Taiwan. Our prices are even lower than their cost, but don't think that our gross profit is very thin, and the industry is basically more than 30%. Maori. Now our products can be sold to the global market, which is a great improvement from the situation we have only limited to some domestic markets, and the space for digesting production capacity is completely different.
In addition, this LED industry recovery, only a few large companies in the country have prepared, the original sixty families, more than 50 are dead, only seven or eight are in, of these seven or eight, some choose to expand production capacity . From a global perspective, South Korea, Japan, or Taiwan have hardly expanded their production capacity.
Another important point is that the current LED products have reached the civilian stage. Previously, because of the high price, they were mainly used for special lighting. For example, the backlights of signal lights, display screens and display screens. Now, after the price is low, the civilian lighting market will rise. The market is huge.
<br> <br> target market is not large and was rumored in the first half, HC SemiTek will buy the production of LED sapphire substrate Yunnan aquamarine. Since December last year, the company's share price has entered a rising channel, and the stock price once rose from around 10 yuan to 23 yuan.
Ye Aimin clarified that in the first half of the year, we had plans to acquire a company. In the end, we did not talk about it, but I could not easily disclose who the opponent was.
As for the future M&A plan, the company's strategy is, "We don't expand the entire industry chain. Our goal is to be a professional independent supplier, only to extend the chip. In the customer market, we do not have to compete. China LED packaging and application companies are relatively early, and they have done a good job. The technology, market development capabilities, and customer resources are already quite mature. The use of professional division of labor to configure the market is not our development goal. â€
Do not make the attitude of the whole industry chain, and maintain the intentions of existing customers. As an industrial equipment company, when the product enters maturity, the price faces fierce competition and the growth space becomes limited. Industry experts believe that the only way to improve profitability is to develop diversified products or seek ways to reduce costs. Ye Aimin believes that it is not possible to stretch in the upstream and downstream, as well as to achieve "business diversification", such as raw materials, such as infrared, ultraviolet, such as triodes. "The English name of Huacan Optoelectronics is different from many optoelectronics companies. Our suffix is ​​Semitek (semiconductor). We are looking at the wider application of light-emitting semiconductors, not limited to the lighting industry."
The LED industry is picking up. According to the data of the mid-year report, the total operating income of the 22 LED listed companies in the first half of 2014 was 11.62 billion yuan, a year-on-year increase of 32%; the total profit was 1.79 billion yuan, a year-on-year increase of 31%. The headlines of the media have turned into "the best way for the LED industry to usher in history."
The LED industry was quiet for two years. After the investment wave in 2010 and 2011, the trough and overcapacity came face to face, the price of chips went down all the way, and many investment projects failed.
The companies that survived the harsh winter and survived almost ushered in spring blossoms. The whole industry presents a situation of rapid growth in domestic and foreign markets and huge market demand.
In the upstream of the LED industry chain, Huacan Optoelectronics, which made epitaxial chips, had a net profit of 74.82 million yuan in the first three quarters of this year, a year-on-year increase of 739%. In addition to the industry recovery, what is the mystery behind the “growth kingâ€, which was still in a loss-making performance last year? Is this growth sustainable? Is there any possibility that the LED industry will repeat the same mistakes in the future, and once again, it will fall into a trough after rapid development? Recently, Hua Can Optoelectronics' director, vice president and secretary-general Ye Aimin accepted an exclusive interview with reporters at the ceremony of the "First China Listed Companies' Value List" in Suzhou.
Huge profit growth mysteries <br> <br> Ye Aimin honest, rapid growth performance of the most direct reason is the low base last year.
Different from the traditional company's creation mode, Huacan Optoelectronics was founded in the form of venture capital. Ye Aimin said that in the years before going public, the company will conduct a round of financing every other year or so, and then expand the production. During the IPO reporting period, due to the preparation for listing, it is necessary to maintain the stability of the shareholder structure. Therefore, in 2011 and 2012, the company did not have a large-scale expansion.
After the listing in 2012, the company established a large wholly-owned subsidiary in Zhangjiagang with the funds raised. At that time, the entire LED industry was in a stage of collective commitment and overcapacity. Ye Aimin said that their confidence in counter-market expansion comes from a rigorous pre-judgment of future market demand. "We are looking at the long-term. After 5 or 10 years, the company's epitaxial chips are in a global position. Our goal is to be the top three in the world. Therefore, we will not make small moves for the short-term high performance."
Like the "squat" action before running, it will help the upcoming run. Huacan Optoelectronics’ operating profit last year was a loss. “In order to build the Zhangjiagang plant, we have built a new 4-inch production line. We only used a 2-inch production line. For the purpose of commissioning and R&D, the production line of the parent company was transformed, and the production capacity of the parent company was also affected.â€
Last year, with the completion of the infrastructure of the Huacan Optoelectronics Zhangjiagang project, capacity expansion, market position and profitability both doubled, and the company's profits, especially operating profits, increased significantly. “Since the second half of last year, the LED market has recovered, but only we have new capacity. Zhangjiagang’s production capacity is twice that of the Wuhan parent company, which is equivalent to three times the original capacity.â€
Indeed, the prosperity of the LED industry has rebounded, and many companies have “reversed the storyâ€, from overcapacity to capacity expansion.
LED, markets are changing <br> <br> market is always changing, LED market, there is no overcapacity situation may arise again it?
Ye Aimin believes that the capacity expansion in 2010 and 2011 is essentially different from the current situation. First of all, the last expansion, the level of the entire LED epitaxial chip industry in mainland China, is far from the overseas companies such as South Korea. Moreover, the expansion at that time was only for the Chinese mainland market. Everyone is used to "a swarm of bees" on the ground. At that time, there were sixty or seventy items to be put on, and each project thought a lot. Overseas competitors still have to "divide food", the market for digesting production capacity is limited, and a little expansion will pass.
Ye Aimin said that the difference is that from the technical level and the competitiveness of products, we have already crossed the border, and the world has begun to accept chips from the Chinese mainland. On the export side, we have replaced the same type of products in Korea and Taiwan. Our prices are even lower than their cost, but don't think that our gross profit is very thin, and the industry is basically more than 30%. Maori. Now our products can be sold to the global market, which is a great improvement from the situation we have only limited to some domestic markets, and the space for digesting production capacity is completely different.
In addition, this LED industry recovery, only a few large companies in the country have prepared, the original sixty families, more than 50 are dead, only seven or eight are in, of these seven or eight, some choose to expand production capacity . From a global perspective, South Korea, Japan, or Taiwan have hardly expanded their production capacity.
Another important point is that the current LED products have reached the civilian stage. Previously, because of the high price, they were mainly used for special lighting. For example, the backlights of signal lights, display screens and display screens. Now, after the price is low, the civilian lighting market will rise. The market is huge.
<br> <br> target market is not large and was rumored in the first half, HC SemiTek will buy the production of LED sapphire substrate Yunnan aquamarine. Since December last year, the company's share price has entered a rising channel, and the stock price once rose from around 10 yuan to 23 yuan.
Ye Aimin clarified that in the first half of the year, we had plans to acquire a company. In the end, we did not talk about it, but I could not easily disclose who the opponent was.
As for the future M&A plan, the company's strategy is, "We don't expand the entire industry chain. Our goal is to be a professional independent supplier, only to extend the chip. In the customer market, we do not have to compete. China LED packaging and application companies are relatively early, and they have done a good job. The technology, market development capabilities, and customer resources are already quite mature. The use of professional division of labor to configure the market is not our development goal. â€
Do not make the attitude of the whole industry chain, and maintain the intentions of existing customers. As an industrial equipment company, when the product enters maturity, the price faces fierce competition and the growth space becomes limited. Industry experts believe that the only way to improve profitability is to develop diversified products or seek ways to reduce costs. Ye Aimin believes that it is not possible to stretch in the upstream and downstream, as well as to achieve "business diversification", such as raw materials, such as infrared, ultraviolet, such as triodes. "The English name of Huacan Optoelectronics is different from many optoelectronics companies. Our suffix is ​​Semitek (semiconductor). We are looking at the wider application of light-emitting semiconductors, not limited to the lighting industry."
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