2016 is about to enter the final closing stage. Judging from the performance of the three quarterly reports, the global LED industry has seen a trend of differentiation between Chinese and foreign companies.
In the LED epitaxial chip segment, the performance of Chinese enterprises represented by Sanan Optoelectronics and Huacan Optoelectronics continued to grow steadily; the LED packaging segment, the packaging giant represented by Mulinsen, Honglizhihui and Guoxing Optoelectronics, the first three quarters Both show a situation of increasing income and increasing profits.
At the lighting application end, domestic large factories represented by sunlight lighting and Foshan lighting have not been affected by market competition. Through automatic production line introduction, supply chain and management cost control, both revenues and net profit have shown two-way growth. trend.
However, in contrast, international companies such as CREE and Philips have experienced a decline in revenue, net profit growth, and even negative growth.
Although it turned profitable this quarter, revenues fell by double digits and announced a moratorium on all external M&A activities. Financial data showed that revenue fell 16% year-on-year to $321 million compared to the same period last year.
Philips Lighting announced its quarterly results as of the end of September, with a net profit of 51 million euros (approximately 434 million Hong Kong dollars), down 30.1% year-on-year. During the reporting period, sales fell 5.4% to 1.745 billion euros (approximately 14.952 billion Hong Kong dollars), while comparable sales fell 3.3% year-on-year.
"Compared with international companies such as Cree and Philips, the performance of China's LED listed companies is relatively good because domestic companies are gradually occupying the market and have reached the requirements of the middle and high-end market in terms of technology, quality and brand." According to Chairman Jin Jinsong, Chinese companies have stronger cost control capabilities.
Multiple factors lead to a decline in performance
In fact, Cree and Philips Lighting are very different.
Now Philips' LED portion has reached 56% in the whole company, the proportion is very large, and the revenue of LED is actually rising, while the net profit is down 20%-30%. The biggest reason is traditional lighting. The speed of the decline is too fast.
Nie Pengxiang, chairman of the Incentive Testing Department, said, “Philips is a full-product line and omni-channel coverage company. When traditional lighting receives shocks, the impact is relatively large. Cree is a pure LED company, the largest source of income. It is the two major parts of the device and lighting, and the rising space of the device is affected, so the overall revenue will also decline."
Compared with the lighting of domestic lighting companies, Cree's lighting channels are relatively simple, relying too much on traditional retailers. In terms of LED devices, revenues over the past few years have relied too heavily on the Chinese market.
However, as the strength of China's LED packaging companies is rapidly increasing, regardless of the scale of production capacity or technical strength, this market substitution effect becomes more apparent.
Considering the relatively large space in the LED lighting market, Cree originally hoped to change the operating income structure of the entire company through lighting. However, due to the fierce price competition in the North American market and the lack of complete opening of lighting channels, the company's lighting ratio is also limited. .
The relevant person in charge of Lidaxin believes that “the influence of domestic lighting companies on the lighting categories such as ordinary LED bulbs has become more and more important, especially in terms of price. The advantages of international manufacturers are brand and popularity.â€
The decline in the performance of major international companies and the slow growth of the overall market are also a very large external cause. In addition, they face the challenge of upgrading local laws and standards.
On the one hand, DLC has entered the 4.0 era; on the other hand, the use of Energy Star 2.0 version began in January 2017, which has caused great trouble to the marketing strategy and product development of these foreign companies.
Nie Pengxiang said frankly, "I believe that after the release of Energy Star2.0, Philips and Cree will have a huge impact on the existing products on the market. Because the products that are in compliance with the 1.0 version are not subsidized, they will also constitute a performance. influences."
International big factory is challenged by "group wolves"
The decline in revenues of major international manufacturers is mainly the result of competition in the global market.
Quan Jinsong believes that "Chinese companies' market competitiveness in the LED industry chain is rapidly increasing, from upstream chips, to raw materials such as glue, phosphors, brackets, gold wires, to midstream packaging, high-efficiency, CSP, SMD, ceramic packaging. , COB, etc., and then downstream lighting companies have established their own brands, coupled with the labor cost advantage of China's manufacturing."
The existing advantages of Philips and Cree are the brand, advanced technology and complete patents. In addition, foreign manufacturers also have obvious first-mover advantages in special fields such as automotive lighting and medical lighting.
Although China's technology level in these segments has gradually matured, it will take some time to get universal recognition in overseas markets.
In the eyes of the industry, although Chinese companies have caused a certain degree of market pressure on this foreign company, they have not been able to constitute direct competition.
In Nie Pengxiang's view, "China adopts the wolf tactics. These wolves are small and secretly eat a portion of the market. Cree and Philips are elephant-level compared to the wolves, even dinosaurs. The volume is completely different."
It is undeniable that the reason for the better performance of domestic enterprises is that the level of packaging technology in the middle reaches has improved. Now it has become closer to the overseas giants, and the price/performance ratio is particularly prominent.
The application of domestic packaging products is getting higher and higher in both domestic and overseas markets. In addition, domestic corporate brands are mainly concentrated in the domestic market, and overseas are mainly concentrated in OEM and OEM.
Are foreign companies marginalized in the Chinese market?
From the perspective of the largest application market for lighting, overseas giants have never occupied a dominant position in the Chinese market.
Chips and packaging used to be their strengths. As long as they are export markets, they must be overseas brands. However, as the quality of domestic brands continues to improve, there are more and more alternatives, unless they are subject to patent restrictions. Higher and higher.
I believe that everyone has noticed that this year Chinese companies are constantly participating in overseas acquisitions. In fact, the focus is on acquiring the technology, brands and patents of these international companies, thus forming their own patent barriers, because brands and patents represent market influence.
Chen Yiping, general manager of Sunshine Lighting China, believes that “foreign enterprises are gradually losing the absolute technological superiority of their products in the Chinese market, so the market share of many brands is shrinking. But like the strong comprehensive enterprises like Philips, the brand influence is still In the short term, it will not be marginalized."
At present, the brand influence of Chinese LED lighting companies is also increasing. For example, NVC Lighting, Sanxiong Aurora, Foshan Lighting, Op Lighting, Sunlight Lighting and other companies have formed their own brand premium capabilities.
Quan Jinsong said, "Foreign companies are constantly being marginalized in the Chinese market. In the future, China will replace international big companies just around the corner."
"I believe that the future is not only the domestic market, but even the overseas market. More and more domestic LED manufacturers will be designated and will become more and more common. Therefore, China's LED lighting companies, occupying and even controlling the global market share is inevitable. Trend." Nie Pengxiang mentioned.
In the view of the above-mentioned person in charge of Rieter, it is still necessary to look at product competitiveness. In the future, domestic enterprises need to continuously strengthen their innovation competitiveness in products and continuously expand their influence.
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