LED street lamp market is suspected of excessive subsidies

Now the local government procurement of LED street lamp has become a popular application from the pilot to promote, often a street lamp project orders to reach tens of thousands. Recently, Shandong Liaoyuan LED division sales director Cai Xingmao on the high engineering LED said that before the local government to do LED Street pilot project, an order of only a few hundred, but also more than one thousand.

The first two months of this year, the prairie fire orders have been the same period last year, and each order is more than 10 million more than three. Cai Xingmao said that the current market fiery degree should be attributed to the local government to promote energy-saving emission reduction projects.

Recently, the Ministry of Finance and the national development and Reform Commission, Ministry of science and technology announced on 2012 semiconductor lighting products financial subsidies to promote the project for domestic public bidding, the product involves indoor lighting and road lighting. This is the first time in 2011 after the introduction of LED lighting subsidy policy, the release of a new round of subsidies for project bidding.

However, a person in charge of Sichuan, a street light, but he has his own view: the domestic LED street lamp market has been suspected of over exploitation. LED street lamp product maturity is not enough to get a large-scale promotion, too fast to promote the progress of technology is not, but irrational investment.

Sustainability doubt

The biggest problem is that the current product is not mature, not suitable for large-scale promotion. Brightness, illumination and other technical indicators and sustainability has not been fully verified. Zhang said.

Relevant data statistics, in 2006 the domestic LED street lamp business is only about 40, but as of now, LED street lamp enterprises have reached more than 1400.

"In the past few years, hundreds of thousands of problems have been found in the LED street lamp every year, thousands of patents in the application, which means that the technology maturity is not enough. Zhang pointed out that LED street lamps need stable development of three to five years, after three to five years, the formation of technology and schools can be done. Now suddenly with such a big move to promote, perhaps LED street lamp technology is not yet mature, the entire market space has been fully digested.

Zhang said that the rapid progress is not to promote the progress of technology is not rational investment, the development of the product and the cost of space will be wasted. The market is a limited resource, can not achieve sustainability.

High tech LED Industry Research Institute (GLII) data show that in 2011 China's total output of LED street lamps (excluding tunnel lights) up to 680 thousand, an increase of 58%, of which the domestic LED street lamp installed capacity of up to 530 thousand, an increase of 51%.

Local government driven by political achievements, there will be replaced in the short term the impulse of street lamps. "Northern lights a company official pointed out that the development of LED lamps will be formed to the last state-owned enterprise background a dominant situation, enterprises no longer require innovation, do not rely on technology, not by reducing the cost, but to go on with local resources. "

"Street lamp sales channels are divided into EMC, direct marketing and foreign trade in three ways, and at present, the market for investment in the wind began to become increasingly popular, and there is a growing trend. Zhang said that at this stage LED street lamps have not yet perfect technical route for everyone to use, all kinds of technical schools have, which will cause great waste of resources. In the short term, the government to market for investment, business investment in the market, LED market may become more confusing in the next two or three years.

The investment in the market the most fun reach the acme of perfection to the number of Sanan optoelectronics. (see Table 1)

According to the three optical report shows that in 2011, from Anxi County State owned Assets Investment Company Limited, Wuhu Municipal Commission of housing and urban construction and urban construction of Huainan City Committee of three customers of the business income of up to 569 million yuan, accounting for the company's 2011 revenue ratio of 98% LED applications. At the same time, the three unit is an optoelectronic three top three customers.

"Investment in the market in a short period of time can achieve high business growth," Zhang said that the investment in the market will inevitably lead to the cost of funds of enterprises, financial costs and liabilities rose sharply, causing other unsustainable resource companies. At present, there have been similar operating practices of listed companies, the financial costs are generally more than 10%. "

For example, a listed company listed funds raised only five hundred million or six hundred million, but due to the need to invest in the market, in a project to invest three billion. So the listed company had to take credit guarantee or equity pledge, from the bank channel financing. But now the cost of domestic banks are more than 10% of the funds, as an entity, it is impossible to have an annual growth of 200%-300%. Once the company was brought into this terrible debt situation, continued for three to five years, the company will be very big blow.

An optoelectronic report shows that, at the end of 2011, total liabilities amounted to 3 billion 503 million yuan, an increase of 216.08% last year.

Another promotion model EMC street is also controversial, with the promotion of EMC street lamp is also difficult to sell than the street, the payback period of 8-10 years to get a reasonable return on funds, how to avoid risks? A deeper problem is that companies will also face the risk of a government change. Taiwan, China, a street business executives Wang Sheng pointed out that the success of the EMC is still more in the field of business.

In this regard, Wang Sheng pointed out that the domestic LED street lamp project to change the current non market mode of operation, the government must purchase the right to street market. He proposed a solution, that is, the local government to transform a street lamp project