LED industry into a series of debt dilemma?

Shenzhen, a medium-sized LED business owners recently run the news, once again aroused concern in the industry. In fact, last year, Shenzhen has also occurred more than a LED business boss foot event.

The boss "run away" incident occurred frequently in the LED industry why? According to the reporter, the LED industry, small and medium-sized enterprise technology low-end, fierce competition, the financing channel is narrow, between manufacturers, suppliers and customers of three entangled in "serial bonds" is a common phenomenon for the enterprise, fragile capital chain lay hidden.

Small and medium-sized enterprises are becoming more and more common

According to media reports, Shenzhen is willing to Jing Guang Electronics Co., Ltd. due to the capital chain problems caused by the collapse of the business, the majority shareholder punishment has been missing. At present, the king is willing to light electronic wage arrears of more than 20 thousand yuan, more than $380 thousand in arrears, the Bank of Hangzhou may reach tens of millions of arrears.

This is certainly not the last one, there will be more companies face bankruptcy. Once in the vision of the work of the Sun Peng Peng Hua 5, the China Securities Journal reporter said that when he left the company in 2010, is willing to light in the development of the market did not appear too much problem. At present, the LED industry into the threshold is too low, there will be a lot of enterprises in and out, resulting in the production of low-end industrial chain overcapacity, fierce competition in the market.

Insiders pointed out that the current LED is a typical labor-intensive manufacturing, many companies do not even understand technology, you can also rely on the assembly of LED parts occupy a place in the market. At present, many companies are concentrated in the low-end market, the weight is not heavy quality LED products more and more, about 90% of the enterprises in the price war. LED industry veteran practitioners Lin told the China Securities Journal reporter.

Excess capacity caused by vicious price war between enterprises, so that the LED industry downstream product prices continue to decline, profits naturally diluted. At present, the gross margin of the LED industry is only about 20%, while net profit of less than 5%.

From this point of view, Diguang electronics seems to be the road to market sales blocked. However, the company's chief financial officer, said the company suffered a lot of difficulties in terms of loans to the company unsustainable. "In the LED industry, small and medium-sized enterprises are becoming more and more common, the profit is getting thinner and thinner, and many people have not been able to keep on borrowing. One in the LED industry for more than a decade of Zhang boss lamented that, in fact, the original 'chain debt' spread on the hidden dangers. "

Chain debt dilemma surfaced

According to industry sources, the existence of a series of bonds within the LED industry issues. Lin told reporters that many companies and suppliers, by letter to ensure the arrival of corporate funds.

According to the general rules of the industry, many people choose to travel to suppliers of raw materials on credit, while allowing the downstream customers to maintain long-term orders in arrears. In this cycle of arrears on the chain, once the company's sales market instability or profit margins decline, the product quality can not meet customer requirements, the chain will break the arrears. If the sale is not stable, it will cause the second round of borrowing, so that enterprises are increasingly high debt, the final bankruptcy. This is a vicious circle. Lin Sheng said.

Insiders pointed out that if the supplier credit period, enterprise funds will be bad to the industry, several suppliers to the enterprise account. This will be like a bank run, to the side of your account, while it is out of stock, the enterprise will soon collapse. Overcapacity in the industry is also to some extent accelerated the spread of bonds between enterprises. On the one hand, the upstream enterprises overcapacity relaxed credit period, fuelling speculation of potential enterprises; on the other hand, the excess diffusion between upstream and downstream production capacity, low industry average interest rate, is also a source of debt the "Domino effect".

Analysis of the industry, there is a widespread phenomenon at present, once any industry to make money, a lot of money will flow into the industry, the final result is the industry overcapacity, followed by the industry reshuffle. In the shuffling process, "a series of debt will continue to unfold, because everyone thinks that the whole industry is not much risk, more credit credit phenomenon, and now the industry into crisis, the problem occurs.