Domestic LED packaging first-line manufacturers step into the "development turning point"

[Text|High- tech LED reporter Wang Cairong] In recent years, China's local LED packaging manufacturers have entered a period of rapid development under the impetus of capital operation, market demand and technological breakthroughs.

In particular, LED packaging listed companies represented by Ruifeng Optoelectronics (300241.SZ), Hongli Optoelectronics (300219.SZ), Guoxing Optoelectronics (002449.SZ), etc., have used capital strength to break through the technical bottleneck in recent years and expand their production capacity. It has gradually become able to compete with packaging manufacturers in Korea, Taiwan and other countries and regions.


Domestic first-line manufacturers step into the "development turning point"

It is worth noting that the rapid increase in demand for LED lighting has also led to the rapid rise of local first-line packaging manufacturers represented by listed companies such as Hongli Optoelectronics, Ruifeng Optoelectronics and Guoxing Optoelectronics.

In recent years, these local first-line packaging manufacturers have used the power of the capital market to frequently raise funds and expand production. Both in terms of technology and capacity, they have rapidly improved and become the backbone of the domestic packaging industry. Their products are in performance and yield. The aspect has even reached the level of Taiwanese factories.

Driven by the huge demand for LED downstream terminal market and the accelerated release of production capacity, many domestic first-line packaging manufacturers ushered in a good harvest in the first half of this year.

According to the latest published data of the mid-year report of 2004, the operating revenues of the three listed companies in Guoxing Optoelectronics, Hongli Optoelectronics and Lehman Optoelectronics increased by 32.45%, 33.72% and 26.76% respectively in the first half of 2014, respectively. The increase was 29.30%, 44.59% and 27.65%.

Although the performance revenue continues to improve, some LED industry veterans said that the current local first-line package manufacturers may be experiencing a dilemma of "development turning point."

"On the one hand, although the products of domestic first-line packaging manufacturers are close to the level of Taiwanese manufacturers in terms of quality and performance, in fact, from the current situation of traditional lighting manufacturers such as Sanxiong Aurora and Jiamei Lighting, they are purchasing in large quantities. The devices are still dominated by Taiwanese and Korean packaging manufacturers." The above-mentioned people told the "High-tech LED" reporter that if the domestic first-line packaging manufacturers choose to switch to the high-end, they compete with Taiwanese manufacturers and even international packaging manufacturers. If there is no advantage, if you continue to expand the scale of production capacity, the low-end market with huge potential for layout will lose the price competition to Mulinsen and the second and third-line packaging manufacturers.

In fact, the price competition pressure faced by domestic first-line packaging manufacturers in the first half of this year has begun to show. Taking Ruifeng Optoelectronics as an example, Ruifeng Optoelectronics recently disclosed the 2014 semi-annual results forecast. During the reporting period, the company achieved a net profit of approximately RMB 1963,665,000 to RMB 3,356,900, a year-on-year decrease of 25% to 10%. Ruifeng Optoelectronics said that due to fierce market competition and the strategy of making a strategic alliance with the major customers of LED lighting, the company's gross profit margin has declined.

“In general, let profit refers to the seller giving the maximum benefit to the customer in order to stabilize the commodity price, thus ensuring the stability of the market price of the commodity. Ruifeng Optoelectronics takes the initiative to take profit measures, resulting in a decline in gross profit margin, which can be seen in the first half of the year. The price competition of packaging manufacturers is still relatively serious." A person in charge of an LED company in Shenzhen said frankly.

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