Chaos in the LED industry: finding the market and finding the mayor

In 2011 LED listed companies, most notably Li Xuliang kingsun. Not only because it is a leader in Asia focused on high-power LED lighting applications, as disclosed in its prospectus 12 agreement on gambling and 21 venture capital institutions (though its prospectus: before the listing of the issuer and its shareholders have confirmed the end of all the terms of the bet, on the terms of the bet has been cleared ").

Li Xuliang is a native of Dongguan, his family was poor, even admitted to the university is also dependent on relatives and friends. In early 90s, Li Xuliang resigned from the state-owned enterprises to create Dongguan Qinshang enterprises. By 1998, the iron decorative lights and Christmas lights on the ground of the record Chinese with industry sales of the first performance.

By the year 2004, Li Xuliang encountered the plight of the traditional industry costs, profit thinning. Because the market in Europe and the United States launched many policies to encourage the application of LED, so he decided to transition to this industry, "when we stepped into the LED lighting industry, that is not good to do this industry, but we have no choice. Li Xuliang chose to explore a variety of LED technology threshold breakthrough direction and sustainable business development strategy.

In 2007, the Dongguan municipal government policy guidance, he began to find opportunities in high power LED outdoor lighting industry, actively seek government order, establish the brand position and then to the indoor lighting and commercial lighting. In 2008, KingSun high-power LED street lamp was included in the "national key project", then it has entered the fast track of development. At present, the main body of the company to bear the Guangdong one hundred thousand miles, the Ministry of science and technology, the Ten City million high-power LED street lamp demonstration projects to promote the implementation of the project has more than 3000 km.

Outdoor lighting is often the main business, the company in 2010 revenue growth of 187.69% in 2008 compared with outdoor lighting, in 2010 accounted for 47.16% of total revenues, gross profit of 39 million 864 thousand and 700 yuan from the year 2008 rose to 64 million 618 thousand and 100 yuan in the first half of 2011, accounting for the proportion of the group gross margin rose from 28.38% to 60.93%.

KingSun outdoor lighting products to street lights and tunnel lights, this company for outdoor products using three different models: direct sales model, distribution model, EMC model (energy management contract). In 2008, KingSun Dongguan has become the first EMC mode put forward "mortgage" selling lamps LED enterprises. This pattern is: LED lamps as government or enterprise customers only need to submit 20%-30% to fund the first phase of the ground can be purchased by the customer, the balance of loans to banks, in the next few years through the annual savings of up to 60%-70% in electricity and maintenance costs to quarterly or annual repayment of bank loans.

2008 KingSun rely on EMC mode breakthrough in the Starving people fill the land. financial tsunami, met with Dongguan Shilong signed orders for 20 million yuan, 40 million yuan to cooperate with Dongguan in Changping, the harvest of the local government and many enterprises inside and outside the province, large orders. Finally, EMC has become the main push of the Guangdong provincial science and Technology Department LED universal model.

But this model also has its side effects in the development of the market, EMC mode requires a large number of funds invested in the early stage, the higher the financing capacity requirements. When the performance of rapid expansion, on the one hand, they must continue to invest in LED technology research and development costs, on the one hand, we must grasp the transient market opportunity, so it is not difficult to understand why the KingSun 2007-2010 period and 21 venture capital institutions signed a 12 agreement on gambling, the frequency of financing in the industry is rare, it not only verifies the venture capital for the LED industry prospects, and highlights Li Xuliang will generally encounter funding in emerging industries, with the spirit of dare to spell.

The Ministry of science and Technology launched the "ten city lights" semiconductor lighting demonstration city plan at the beginning of 2009, according to the LED lighting and traditional lighting compared to the incremental investment 30%-50% subsidies, state of LED upstream chip production machine subsidies. LED companies in order to snatch the commanding heights, set off a large number of LED street lights and buy MOVCD machines, the trend of the chip project launched. Have a large number of government subsidies for public lighting market has become a a hotly contested spot.

This makes in strengthening the business at the same time, on the ground need to rely on the policy of subsidies. 1-9 month 2010, KingSun total profit of about 59 million 150 thousand yuan, the annual total of 22 million 460 thousand yuan of government subsidies; 1-9 months of 2011, the company received government subsidies 10 million 900 thousand yuan; in February this year, KingSun also received 17 million 680 thousand yuan of government subsidies.

But Dongguan bright group chairman Xu Zhensen has chosen a different path, the Taiwanese lighting industry started in 80s, when he was 25 years old, inspired by the oil crisis, the design of the Taiwan first light energy-saving garden lamps exported to the Middle East, unexpectedly missed his local energy-saving design, but saw his lighting design idea, and he rely on foreign trade started into the manufacturing industry, and began to intervene in the household and commercial LED industry in 2003.

In 90s Taiwan labor and land costs rise, Xu Zhensen will move to a factory in Dongguan of Humen, and in 1996 have passed the ISO-9002 and ISO-9001 quality system certification, become the first to have this certificate China lighting factory, in 1999 the company was listed on the Hongkong Stock Exchange (the shell resource has been renamed Dejin resources, focus on mineral resources business).

But because the company special background, which not only focus on the mainland policy, is also concerned about the trend of the world lighting technology. In the headquarters of the Dongguan Yinghui exhibition hall, Xu Zhensen every bright turning point