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LED industry bid farewell to the wave of mergers and acquisitions

by:ALLTOP      2019-12-28
In the past, people in the circle asked each other if they had earned money. Now, everyone asked if they had turned. A boss of an LED enterprise said wittily. Most entrepreneurs believe that after two years of rapid development, the LED industry will soon bid farewell to the scuffle, and mergers and acquisitions will be a good way out for enterprises in the fierce market competition. The bosses of the above-mentioned enterprises believe that the current wave of mergers and acquisitions in the LED industry is booming, not only for listed companies, but also for unlisted companies. Although the ownership of the enterprise is handed over, the shareholders of the acquired party obtain the listed shares of the acquired party through resale of the shares, which is equivalent to the indirect listing of the enterprise. Moreover, in most merger cases, the original shareholders will not lose their management rights. However, listed companies obviously have more advantages in mergers and acquisitions. Lianjian Optoelectronics announced on September 26 that it acquired Shenzhen yishida Electronics Co. , Ltd. in the form of stock cash. The main business of yishida is LED display screen, which was previously planned for IPO. The profitability of the company is not inferior to that of its peers. In the upstream of the industrial chain, LED chips have benefited from the rapid development of the Terminal LED lighting market, and the popularity of LED chips in the first half of this year is still continuing. In the middle of the industrial chain, there is little difference in technology among domestic LED packaging enterprises, but only the capacity scale of enterprises. Some enterprises integrate the resources of other small enterprises through mergers and acquisitions to achieve the purpose of expanding production capacity. Gong Wen, general manager of Jingtai Co. , Ltd. , believes that the decisive factors for the competition of packaging enterprises in the future will be management ability, cost control, scale and brand. In the downstream of the industrial chain, the LED lighting market is improving in 2014 as a whole, but due to the homogenization of products, the competition of lighting products is often limited to the price level. Some enterprises open up a competitive strategy of dissimilation through integration with the upstream. For example, Hong Kong-listed Zhen Mingli recently completed the integration with the shares of the same party. According to Jiang Guangjun, deputy general manager of Zhen Mingli's domestic Center, judging from the development of the industry last year, LED lighting products will be separated from pure price competition and turned to product value competition. He introduced that the smart building/home lighting solution launched by zhenzingli this year is precisely the action to adapt to the development of the market for the general trend of smart city. Of course, merger and acquisition integration is not a panacea. Industry insiders believe that mergers and acquisitions are not only the integration of capital markets, but also the integration of corporate culture. If the merger and acquisition parties fail to reach a unified goal, the merger and acquisition integration may bring negative effects and will face a situation like between dehaurunda and Rex lighting.
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