Flocking listed in gross margin decline LED flash alert "scale economy"

Listed sprint from the collective to the vigorous capital expansion, a light-emitting diode (LED) industry in the Great Leap Forward was staged fiery end. Correspondingly, due to increasing competition, the industry has begun to decline in gross margins, industry is facing a structural crisis of overproduction, the relevant listed companies and investors when vigilance "diseconomies of scale" phenomenon.
EVERFINE Optoelectronic Information, Inc. on December 20 starting passed, LED plate Adds newcomer. Before this month, has Jufei Optoelectronics Co., Ltd. of Shenzhen City, Shenzhen Mason Technologies Co., Ltd., mayor of Shenzhen Semiconductor Lighting Co., Ltd., Liard Optoelectronics Co., Ltd. have been starting over would.
This year, Lehman optoelectronics, Hongli Opto-electronic, Chau Ming Technology, Alto electronics, Ruifeng power LED high bay light industry and other companies have taken the lead in capital markets. Compared with the traditional lighting, LED lighting highlight the advantages of energy saving, the future market is considered a mainstream technology. But the industry has excess capacity in the context of the continuous influx of large amounts of capital is also worrying. Reporters noted that the collective assault listed in the new company, while listed companies have also started expansion plans. Honglitronic to be adopted by the newly established wholly-owned subsidiary in Guangzhou Huadu Airport voted to build a high-tech industrial base application and development of LED products production base, a total investment of 266 million yuan. Dongshan Precision intends to original LED business for a substantial expansion, expected expansion will make the LED grain production capacity will reach 3 billion, LED backlight module production capacity to 4.5 million units. ST and Sweet also recently revealed extraordinary general meeting approved a wholly owned subsidiary invested 836 million yuan in the construction of Jiangmen LED wafer production projects. Then count the previously announced capital expansion of BDO Runda, Alto electronics, Topband shares Tiantonggufen other companies, since this year to expand production capacity of the LED companies abound.
Vigilance is needed, one seemingly unlimited prospects, reasonable layout of the project, combined constitute the whole industry chain, the irrational expansion. The context of overcapacity continued expansion, not only in basic chemicals, paper and printing, food and beverage and other traditional industries, have begun to spread in the LED and other emerging industries.
Data show that in 2011 China's LED industry output value is expected to reach 154 billion yuan, an increase of 22%, while production increased by over 50%. However, when the output value of high yield growth since the third quarter gross margin has bright LED industry

Significant decline, some listed companies have to face the dilemma of income does not increase profits. Three quarterly data show that the first three quarters of Lehman photoelectric consolidated gross profit margin 29%, down 9.29 percentage points, mainly due to the LED packaging and LED display industry becoming more competitive, prices continued to decline. Country star power but also because product prices, gross profit margin decline is expected 2011 annual net profit decline of 5% to 25%.
As the "second five" plan an important part of energy-saving environmental protection industry, LED high bay light has been given a splendid imagination. But many people in the industry have begun to worry about the price downside risk that investment planning and construction of production capacity has far exceeded the actual market demand, the industry is caught in a structural crisis of overproduction.
Orient Securities researcher Zhou Jun in the evaluation of LED enterprises concentrated market, said: "This phenomenon he explains the industry's rapid growth, increase financing channels, but also reflects the current sluggish economic environment, LED shortage of funds of enterprises. Sprint is listed on the company to raise a lot of money through the difficult times in order to take advantage of expanded scale the only way to survive. "Overall, LED industry chain overheated investment revealed that next year the domestic industry overall survival situation is not optimistic, lack of strength in the core technology and industry standards is not perfect under the premise of listed companies to raise funds using the massive construction projects, not only exacerbated the industry in the fierce fighting, protect the interests of small investors are also worrying.

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