LED companies get together behind IPO: self-help or gambling next round?

Local LED companies appear strange scene. The Commission announcement shows, December 8th to 12, 5 days, Jufei, Shenzhen, and Shenzhen wealthrun leyard optoelectronic rectangular 4 LED enterprises will have to declare.

Why do they get together IPO? It turned out that these companies are increasingly suffering from excess capacity, such as can not be passed safely, in 2012 may lead to a serious shortage of funds, do not rule out becoming someone else's integration goals.

Overcapacity intensified

On the evening of December 8th, 9 points, with the shares of Wang Lianghai, vice president of Shenzhen and several LED executives said in the first quarter of next year, the domestic LED chip production capacity will rise to record highs, prices will drop significantly.

He said that as of now, the same side of the total arrival of 50 units of MOCVD, 20 units put into operation, the remaining part of the commissioning will be put into operation.

The number of MOCVD in the following 10 companies, the future development is very dangerous. Zhang Xiaofei, President of the Institute of high industry.

This is mainly the scale and go. According to the law, a LED enterprise MOCVD equipment at least 30 or more, only the scale effect. Many LED companies continue to buy the device. For example, in mid 11, Hunan Hua Lei photoelectric and AIXTRON set up 8 units.

Statistics show that as of the end of November, domestic new MOCVD reached 300, is expected in 2012 will increase to nearly 200 units, then the LED chip production will be approximately 10 times that of 2010.

Before, MOCVD equipment giant Veeco China President Wang Keyang on the first financial daily said that China's top LED companies have purchased their orders, one of them bought a lot. According to sources, Elec-Tech a booked about 100 taiwan.

Wang Lianghai said that in the first quarter of next year, the domestic LED chip prices will bottom, then the inventory digestion cycle for at least 6 months.

Ruifeng photoelectric chairman Gong Weibin believes that the international overcapacity is the root cause of China's excess capacity. The first two years, Taiwan and Japan and South Korea manufacturers have crazy to buy equipment, the number of up to more than 2 thousand units, but due to weak market, resulting in today's dumping of mainland China stock. Wang Keyang said that at the beginning of the year, Samsung chip procurement, resulting in 70% backlight chip dumping to the lighting market. LG and Taiwan enterprises to follow up, the global red sea.

Up to now, Taiwan LED upstream production capacity utilization rate of only 60%. Zhang Xiaofei asserted that next year, the survival of domestic enterprises will deteriorate due to overcapacity, the funds will further shortage.

LED wave of mergers and acquisitions

What does this have to do with IPO? Originally, the pursuit of scale must have a large amount of money. If the scale of their own can not be quickly expanded, next year may become the goal of integration.

Over the past year, the industry has now mergers and acquisitions tide. Data compiled by the newspaper shows that since July, the global LED has occurred 13 cases of mergers and acquisitions, the Chinese market from the 4.

Zhang Xiaofei said that the acquisition of domestic LED companies, generally with excess capacity, resulting in a decline in the price of operating capital shortage.

China is seeking to set up factories of OSRAM, half crazy acquisitions: at the beginning of July, OSRAM's acquisition of Germany Siteco; October, by TownsendVentures EncELium in November, after the purchase of the remaining shares in the acquisition of TraxonTechnologies.

A domestic LED packaging listed company executives revealed that last year, OSRAM had opened about 1000000000 yuan price, to buy his company, but he refused, and later he chose to go public. Chen Kun, vice president of OSRAM Opto Semiconductors Asia and said that the acquisition can accelerate the layout of China, the provincial time.

GE, CREE and PHILPS also launched a series of mergers and acquisitions over the past few months. They have widened the gap with Chinese enterprises. Chinese companies do not want to be too far away. In mid November, sinogas acquisition of mainland LED lighting enterprises access to 386 million Hong Kong dollar; Depp technology acquisition of MegaWide and StarryView all equity to 124 million yuan, from the mainland, Hongkong and the European brand product sales. Prior to this, Depp also 160 million yuan acquisition of the reputation of the science and technology of the company's stake in, indirect access to the Jiangxi Wei light 95% stake.

Depp, chairman of the board of directors, said the company's original electrolytic capacitor business growth is weak, the beginning of mergers and acquisitions involved in the LED industry, the company has spent 1 billion yuan acquisition of 4 LED companies, the future will be looking for new targets.

But the gap is still large. Lehman photoelectric chairman Li Mantie said that the local listed company's largest revenue of not more than 1 billion yuan, Taiwan enterprises revenue reached $5 billion, the European giant is about $7 billion. Fly, Wan Run, Riyadh and poly Shenzhen rectangular prospectus shows that 4 companies revenue only 400 million yuan.

IPO may be able to bring the opportunity to expand the capital from the perspective of the local. In addition to a large number of MOCVD equipment procurement (about $3 million each), the integration of expansion, they also face a severe problem: the backlight market is close to saturation, can not rely on subsidies to the engineering market unlimited continues, and the general lighting market is far from universal. They must keep some food for the winter.