LED display industry shuffle accelerates industry concentration

In July, Shenzhen Yiguang was forced to close due to the arrears of tens of millions of suppliers, and the capital chain was broken; In August, Shenzhen Shifang Optronics fell into bankruptcy due to malicious fraud of 80 million yuan from suppliers and arrears of 220 employees' wages for two months; In September, the company was mortgaged due to poor management in Shenzhen. After more than ten years of development, the LED display industry has gradually entered a large-scale shuffle period. As early as 2011, the industry reshuffle has begun, and display enterprises such as Junduoli and borente have closed down and withdrawn from the market; At the end of last year, vision Optoelectronics, vision, Haobo optoelectronics and Jiahao Optoelectronics also closed down one after another, and the reshuffle of the LED display industry has never stopped. The tide of bankruptcy continues, and the tide of mergers and acquisitions is also coming. 2013 7- In September, there were three cases of mergers and acquisitions in the LED display industry, namely, Jiangmen Keheng acquired the equity of lianteng Technology 51 and Furi Electronics acquired the equity of meirui Optoelectronics 93, hong Kong listed companies seamlessly Green to buy the equity of Shenzhen sanshengke 51. Bad market competition leads to a Red Sea in the display screen market, and the profitability of enterprises continues to decline; In order to ensure profitability, some enterprises have to use inferior materials, which leads to product quality problems, the payment for goods cannot be earned, and the accounts receivable are increasing; The growth rate of market demand is less than the growth rate of production capacity, resulting in an increasing inventory of enterprises. The decline in profitability, the increase in accounts receivable and inventory lead to the inability to guarantee cash flow, which is the main reason for the merger of enterprises. Lianteng technology's revenue in 2010 was 45. 48 million yuan, its operating profit was 2. 14 million yuan, and its revenue in 2011 was Yuan. 0. 4 billion, up 129 year-on-year, but operating profit was only 2. 24 million yuan, up only year-on-year, and gross profit margin decreased by age points. In 2012, it was directly reduced to a loss state with a net interest rate-0. 1. 6 billion 2013 1-In May, it was still in a state of loss. In the first half of 2013, revenue was 1. 7. 7 billion, accounts receivable is 0. 6. 6 billion, inventory is 1. 5. 3 billion. The inventory is too high, occupying a large amount of operating cash. Moreover, the price of LED display screen is declining, the performance is continuously improving, the inventory is too high, and the impairment risk is increased. In addition, the high amount of accounts receivable has aggravated the tight cash flow of the company. Careful observation of LED display companies that have closed down since 2011 shows that the basic reason for bankruptcy is mostly due to cash flow fracture. The cruel market situation has led small and medium-sized enterprises to adopt abnormal operation methods such as low price rush or credit impulse to seize the market, which will greatly increase the operational risks of enterprises. The two levels of differentiation have gradually increased, and the concentration of the industry has increased. In the first half of the year, small and medium-sized enterprises have emerged in the tide of bankruptcy and mergers and acquisitions, while the performance of listed companies is growing. Zhou Ming technology's revenue growth in the first half of the year was close to 30%, and Oto's gross profit margin was as high as 54. 8. According to the investigation of LEDinside, the performance of LED display device packaging manufacturers with major manufacturers as their main customers, such as Guoxing Optoelectronics, Jingtai Optoelectronics, Lanke Optoelectronics, etc. , is also on the rise in 2013, the photovoltaic capacity of Jingtai has reached 1300KK/month and continues to expand production. In fact, from the perspective of mainstream suppliers of upstream LED display chips, the performance of Huacan optoelectronics and shilanmingxin has declined to varying degrees. Although the market demand for the entire LED display screen is increasing, however, the total output value is affected by the price decline, and it is in a state of small growth or even stagnation. Under this market pattern, large manufacturers maintain high gross profit while maintaining a high-speed growth trend, which is enough to show that the concentration of LED display industry is increasing.