LED industry winter has passed the spring?

Held a special press conference to highlight the government attaches great importance to lighting energy conservation. In August 8, 2011, the national development and Reform Commission announced on its website that the "China phase out incandescent roadmap (Draft)", from October 1, 2012 onwards to ban the sale and import of 100 watts and above ordinary incandescent lighting, until October 1, 2016 to prohibit the sale and import of 15 watts and above ordinary incandescent lighting. "Draft" in October 1, 2011 released the official announcement of the road map, but the actual release time than the original time delayed a month. National Development and Reform Commission issued a notice every year, a large number of announcements, but held a separate press conference is quite small, reflecting the government attaches great importance to energy-saving lighting.

The follow-up is expected to launch LED lighting subsidy policy. The LED related stocks outstanding show the stimulation of the above policy, the market has also spread about the LED general lighting subsidy policy may soon be introduced. In September 28, 2011, the Shanghai Securities News reported, the Ministry of Finance in conjunction with the development and Reform Commission and other departments on matters relating to subsidies of semiconductor lighting products, and is expected to start the fourth quarter, will give priority to start for indoor lighting and commercial lighting products subsidies, such as lamp, spot lamp, and then gradually expand the scope and intensity of subsidies. On a global scale, the current Japan, the United States, South Korea, the European Union and other developed countries in the LED lighting products to promote subsidies, including subsidies in Italy up to 55%. Australia, Taiwan and other places have begun to promote street lamp project. We believe that, after the clear policy to eliminate incandescent, the government will put forward countermeasures on alternative light source. LED industry as one of the seven strategic emerging industries in China, the future development of the government's financial support should be reasonable. We expect that the timing of the introduction of LED general lighting subsidy policy is approaching. The technical and economic feasibility of LED general lighting has been officially recognized. We believe that the "road map" especially LED lighting subsidy policy will be launched in the follow-up showed that the official has been approved by the domestic LED industry in economy and technology have the condition and foundation of large-scale promotion in the field of general lighting. The application of LED in the field of general lighting is about to speed up.

Although the policy from the promulgation to the implementation of a process, but for the industry, LED is expected to accelerate the development of general lighting has been very clear.

Two views on the industry in the three quarter should be the bottom of the performance of the industry. From the LED industry listed companies released three quarterly report in 2011, the third quarter, LED revenue and profit growth of listed companies showed a decline across the board. Main causes of decline in profit growth, one is due to weak demand in product prices fell sharply; two is a huge number of domestic downstream enterprises in LED, about 3000 more than the majority of micro and small enterprises, the current round of monetary tightening by this part of the small private funds is extremely tight, high cost of funds.

From the current policy trends, monetary policy has begun to directional easing, eliminating the release of incandescent roadmap and LED lighting subsidy policy is expected to accelerate the expansion of the LED market. We also investigate the grassroots part of the downstream companies also show that LED lighting demand and demand for display since October has shown a steady rise trend, only backlight demand is still not ideal. Comprehensive analysis, we believe that the three quarter of this year should be the low performance of the LED industry.

LED general lighting is still in the initial stage of rapid development, the development of the industry after the reshuffle more healthy environment. Energy saving, environmental protection, health, strong design and a series of advantages determine the trend of LED into the field of general lighting will be irreversible. Although the 2011 LED general lighting market has shown a trend of rapid development, but many people in the industry will reach 10% market penetration as a landmark event, and that the permeability of LED in the field of general lighting will be more than 10% in 2012, which will be defined as the first year in 2012 LED general lighting. For several times the traditional application of the general lighting market, the development of the LED industry has just started, the huge market space in the future. We believe that the experience from the local government in 2010 to promote investment overheating to the 2-3 quarter of 2011, the industry's brutal reshuffle, the various funds should be more rational understanding of the LED industry, the industry's overall development environment is constantly optimized. Moreover, the progress of technology and the fierce competition in 2011 has led to a sharp decline of LED terminal price, according to a recent LEDinside observation, the international market is expected to price the sweet spot (Sweetspot), the best price is acceptable market (instead of the traditional 40 Watt LED bulb target price of $10), will be held on 2012 the second season to arrive early, and replace the traditional 60 watt LED bulb price is expected to reach the goal in the first half of 2013. In short, we believe that the 2011 trough is only a small twists and turns in the growth process of the LED industry, from the beginning of the general lighting market in 2012 will accelerate the pace of opening up the industry spring is coming.