Gem and the development of LED industry in China: analysis of the upsurge of listed companies

January 1999, Shenzhen began preparations for the gem, "submitted to the Commission of Shenzhen Stock Exchange on the growth of market research plan project", to October 30, 2009, 28 GEM companies collectively landed the Shenzhen Stock Exchange, Chinese gem "ten years grinding sword" finally launched operation. The first batch of 28 GEM listed companies are mainly concentrated in the technology and service industries, there have been some motherboard market has not been the concept of a unique industry. The launch of gem marks a new stage in the development of our country's capital market. Gem is a country to promote national economic development, the need to build an innovative country. For innovative enterprises, it provides a good, effective financing platform. For investors, there is an additional investment channels to increase property income.

China's LED industry after nearly 10 years of rapid development, has become the world's most important, the fastest growing LED market. China is not only a big manufacturing country of LED, but also a big country of LED application. According to the statistical data of alliance national semiconductor lighting project released: 2009, China's chip output increased by 25% compared to 2008, reaching 2 billion 300 million yuan output value of 20 billion 400 million yuan; LED package; semiconductor lighting applications in getting out of the financial crisis, contrarian growth of 30% to reach 60 billion yuan. 2009 China's total LED industry totaled 82 billion 700 million yuan. So how to use the capital market LED enterprises to accelerate their development?

LED companies can be listed?

In March 19, 2010, the Commission issued the "on further improving the work of the gem recommended guidelines", clear positioning of gem is "to promote the development of independent innovation of enterprises and other growth enterprises market function, support and promote the development of national strategic emerging industries, support and guide the national strategic emerging industry development direction of the enterprise. Especially, new energy, new materials, information, biology and new medicine, energy saving and environmental protection, aerospace, marine, advanced manufacturing, high technology service industry enterprises, with the growth of independent innovation ability, strong enterprise and other areas". At the same time, the gem's goal is to achieve national innovation strategy, promote industrial upgrading, the gem for innovative high growth companies to provide financing platform".

LED industry due to the relatively long industrial chain, the technical characteristics and capital characteristics of each field is very different, from upstream to midstream and downstream, industry barriers to entry gradually reduced. Upstream epitaxial material and chip manufacturing has a typical "double high" (high technology, high capital) characteristics, midstream packaging technology and capital investment center, downstream display and application in the technical content and capital investment to be lower.

From the perspective of industrial economics and the experience of the development of the LED industry in Taiwan, to support and guide the development of LED industry will drive the rapid development of the LED industry as a whole. Taiwan LED industry is a typical downstream cutting mode, that is, through more than and 20 years of experience in the middle and lower reaches of packaging and application fields, and gradually extended to the upstream of the epitaxial material and chip manufacturing field.

LED industry is a high-tech industry, belonging to environmental protection, energy conservation and emission reduction policies to encourage the development of the industry, no doubt belongs to the gem support and guidance of key industries. At the same time China LED packaging and application of the rapid development of the industry, the scale of enterprises are small, positioning and gem combination is very good, but it is not a LED package and application of enterprises listed on the gem. Therefore, LED packaging and application companies should seize the opportunity of the capital market, improve the mechanism, integration of enterprises, expand the scale, and actively develop the use of gem. LED enterprises listed what are the benefits?

First of all, companies can get a large number of long-term capital market, reduce financial risk. The listing can quickly raise billions of dollars of capital, expand business scale, and equity financing for enterprises no regular servicing pressure, enterprises can be very good to avoid fluctuations in business with the financial risk, improve credit, enhance follow-up financing capacity. In addition, if the stock can reduce the asset liability ratio, easy access to commercial bank loans, when the book value of the company's market capitalization exceeded its net assets, the lender may extend more credit to the company, can share allotment, issuance, or issuance of corporate bonds.

Secondly, the listed companies can change the operating mechanism, establish a standardized management system. In the process for issuing and listing, companies often have to undergo a rigorous review of the securities regulatory departments at all levels of government, and the agency under the guidance of transforming the management mechanism of the listing process is actually moving forward an important process of modern enterprise management mechanism.

Third, listed companies can promote managers to improve operating performance. Because the operation of listed companies is relatively transparent, under the supervision of regulatory authorities and investors, managers will be more diligent to seek to maximize shareholder wealth. At the same time, the shareholders and debtors are more responsible for the risks, which have higher requirements on the income, and have great pressure on the operators.

Fourth, the company can be listed on the formation of a huge advertising effect, enhance reputation, establish a brand. After the listing of the company because always in the public view, stock analysts are closely watching frequently listed company, the news media also pay close attention to the company listed on the stock exchange, the company received more public exposure. Enterprise listing