LEDinsid analysis of Elec-Tech cooperation with NVC

At the edge of the stock stop six days of the Elec-Tech suddenly thrown a blockbuster news, in cooperation with NVC, and with that attitude to return to the market, has become the LED industry in this year is full of concern about the wallet. At the same time, the largest shareholder of NVC Wu Changjiang to take this opportunity to join Elec-Tech, to become its second largest shareholder, will start his dream lighting extending from traditional lighting to LED lighting.

For these two companies, this year is an extraordinary year, NVC has resigned after the door and multiple effects, Elec-Tech frequently suffer from various negative news. The two cooperation, will open up a new picture of China's LED industry?

LEDinside believes that the LED lighting terminal market is not expected to get up so fast, leading to a number of aspects of the LED industry chain have varying degrees of excess capacity, this time we will be more difficult. This time the merger action is actually a sign of industry consolidation, through mergers and acquisitions, the entire market will be less a competitor, repeated investment will be reduced. After the acquisition of the overall anti risk, resist the ability of the industry downturn will be strengthened.

LEDinside observed, Elec-Tech in recent years on vertical integration has made a lot of efforts, through the acquisition of a way to cut into the middle and lower reaches of the different aspects of the industry chain, before the acquisition of the jianlongda and retop involved in packaging and display the application link, but now he may have found or missing in the sales channels, their a price advantage of the products to the retail market is not so easy, but their risk to invest in the construction of channels is too big. 1 billion 340 million yuan may not be able to create a channel and brand, but also become the largest shareholder of BDO NVC, the such good capital operation of enterprises, is a good choice.

This is also a good inspiration for the LED industry, in the process of enterprise development, mergers and acquisitions can be achieved through the capital market vertical or horizontal expansion. Always have to add their own equipment, build channels in fact completely unnecessary, so it will only expand their risk, and the entire industry to bear repeated investment, overcapacity consequences.

For NVC, the move just to fill the LED weakness, it is understood that the current NVC LED lighting business accounted for only a part of the overall performance of the company is very small, not because NVC is not optimistic about the LED lighting, but NVC boat U-turn difficult, in addition to LED lighting research and development is the weak link, in order to avoid the traditional lighting industry impact. According to insiders, NVC has invested in the field of LED lighting, but the effect is not very satisfactory, but this year NVC even set up a special team in the market for the appropriate OEM manufacturers for its production. The introduction of NVC Elec-Tech is decided, to enter the LED industry of course, Wu Changjiang contributed.

Analysis of the industry, NVC has a great advantage in China lighting and commercial lighting products channel, NVC is a leader Chinese market, it can be concluded that NVC has a great advantage in the commercial lighting sales channels. LED lighting market now can sing just LED commercial lighting, Elec-Tech or to take this opportunity to lead to promote LED commercial lighting.

It is questionable, because of the introduction of Schneider NVC earlier and later a dispute to NVC weakened, and the re introduction of Elec-Tech NVC, later will not have a similar dispute? This is because Wu Changjiang to sell shares of NVC apparently somewhat passive, but the industry said that NVC is the "image", "Elec-Tech snake", between the two may fit.

LEDinside believes that 2013 will be China LED enterprises to occupy the local market and channels for the fight of the year, although Elec-Tech spent heavily in NVC, which has been an important weapon in the new round of competition in the market. NVC with its channel advantages, the introduction of Elec-Tech LED technology and products, or to become a model of traditional lighting the first transformation.