Compared to “give up”, “take” sounds easier, but in reality it is not easy. Before  Alibaba, UOB shares (002,236), Tiger Pharmaceutical (300347) gained success, few people believe that these companies can do so, so good.

However, when they are still in the early days, only a dozen or even several-person, the High-tech Zone (Binjiang) started to pay attention to and support its growth.

This is not to say that the leadership of the high-tech zones knew then that these companies will be successful. They just believe that these industries lead the future direction of industrial LED industry development, and represents a new business model.

“We have absolutely no reason not to support these enterprises, but whenever we support, they are also likely to fail. Supported by those who see tomorrow, see tomorrow the day after tomorrow industry, it is better to support tomorrow may not be successful, but the day after tomorrow will be brilliant LED industry.”High-tech Zone (Binjiang) a member of the Party Working Committee, Party Committee, deputy director of the CMC, Vice Mayor Jin Zhipeng said, the concept of which is selected by the High-tech Zone (Binjiang).

He said, insight is not everyone have, but the leadership of the high-tech zones, the staff must be forward-looking.

The secret of such forward-looking is to deal with that every day, and these high-tech enterprises, constantly absorbing the latest information in the industry. High-tech Zone (Binjiang) a lot of managers and cadres working here for many years, the reporters found throughout the interview process, they can do based enterprises familiar, they are well aware of the latest trends of the enterprises in the park.

There is a phenomenon that: Ugly face, difficulty in getting ” But at here, you can not see. To communicate seamlessly with business is the work that they do every day. Perhaps this is the choice of the High-tech Zone (Binjiang), and they always choose right reasons.

Tolerance of failure, please come again

Even Alibaba starting business from 1999 and to 2007, 2008 get fruit. But it can be called developed soon.

High-tech Zone (Binjiang) official said that compared to other parts of the direct introduction of the 500 companies, the vast majority of High-tech Zone (Binjiang) enterprises are starting from one or two people, a step-by-step to grow up.

3. Whether surrounding industrial chain is complete or not? Surrounding not a complete industrial chain, will increase the difficulty and cost of raw materials procurement; 4. whether the talent rationing can be put in place? If the enterprises where went into operation, can not find a suitable and sufficient personnel, it is bound to bring troubles for the enterprise production, research and development, sales and other core areas.

Tailored precision investment

LED industry has a long industrial chain, the technical features of each area and the capital characteristics are very different. From upstream, midstream to downstream, the barrier for enterprise to enter industries reduced gradually. Generally speaking, the upstream epitaxial wafers with a typical “double high” (high-tech, high-capital) characteristics, the midstream chip technology content is high, capital is relatively intensive. Downstream packaging technology content and capital inputs are rather lower, while applications technology content and capital investment input the lowest minimum.

For the different characteristics of the LED industry chain link, investors should invest according to their strength and targe: If the capital strength is powerful and tried to occupy the leading position in the field of LED Products, they can be considered through the upper and middle reaches of the high-end cut. But take note that, the field of investment quota is huge, and the relative lack of professional and technical personnel, so the investment risk increased, the rate of return on investment is quite slow; If the capital strength is general and do not want to take too much risk, you can consider investing in the packaging field, because it is closer to application market and reduce risk.

Most investors tend to invest in the field, and full of hope for the power-type package; if it is small amounts of capital, cutting from the applications is preferred, because the lowest application products in the market access threshold, directly facing the terminal market, technology risk, low investment and quick return. However, as the competition of this field is an increasingly market, most manufacturers take the low-cost competitive strategy, and lower profit margins.

In 2013, the Chinese government frequently introduced macro-control policy of energy saving and environmental protection to catch a ride shares, which is quite eye-catching. On a favorable policies, some of the LED business are as rational attitude to layout the critical year 2013. in addition to the essential technological innovation and cost control, service strategy channel strategy, differentiation strategy “is becoming the a heavy head deployment in 2013 shortly after the Chinese New Year.

“Made in China” in addition to the price of civil war, it should have more meaning,” an LED manager said so. In 2013, innovation, service, quality have the real alternative to replace a price war? In a new metrorological map, Whether it can usher LED industry development on the vein figure?

As follows the favorable policies, so do not forget the foundation

As of 26 February 2013 after the Spring Festival, the Shanghai Composite Index down by more than 5%, and the energy saving sector rose 5.89%, far outperforming the broader market, the multi-vessel LED stocks also appeared in varying degrees of increase.

This had to be leveraging the introduction of the national policy of energy saving and environmental protection.

First, of course, it is the Development and Reform Commission, Ministry of Science and Technology, Ministry of Industry and Information six ministries jointly issued on February 17, 2013 “semiconductor lighting energy saving industrial planning, planning requirements of energy saving LED lighting industry output value of the average annual growth rate of about 30% in 2015450 billion yuan. It can be expected, the release of “planning” can help to promote the healthy development of semiconductor lighting industry.

In addition, the General Office of the State Council has also forwarded the Development and Reform Commission, the “green building program of action” the Ministry of Housing, the main goal includes two parts of new construction and existing building energy saving, it requires by the end of 2015, 20% of urban new buildings to achieve green building standards requirements.

Clearly, better to have the positive policy. While at the same time, there are cautionary voices to remind: “At present, the state has not issued the terminal subsidy rules for LED lighting products such as Portable LED Explosion Proof Flood Lights. The LED industry should be a rational view in the role of the accelerating popularity of the application side.”

2013 New Year is approaching. In the New Year threshold, “How LED industry in the future 2013 will become? it is obvious interesting.

Conjecture: thriving enterprise at home and abroad increased the competition?

With the increasing emphasis on the promotion of domestic LED, there will be more foreign LED corporate giants to enter the domestic market in 2013. It is known that in 2012 the Guangzhou International Lighting Exhibition brand exhibition significantly increased, and there are 6 companies whose booth area is over 584 square meters. In the last year, only one enterprise entered this square meters. Today, the brand pavilion international giants have also emerged, Philips, Osram, GE, the world’s top 500 enterprises in the field of lighting and LED brand in gathered. With this international platform to showcase the brand image, Philips is a model. Kingsun, BDO Runda, on Shun lighting, JINGRI enterprises stand on the 584 square booth competing, it also clearly show the rise of the domestic national brand.

With rapid development of the national economy in recent years, the rapid first line of the LED industry, lighting international competitiveness of enterprises in China have continued to increase, gradually narrowing the gap with international brands. Some enterprises stand among the world’s leading enterprises, which makes it occupy a place in the arena of international lighting industry. Guangzhou International Lighting Exhibition will create a good system and social environment for enterprises to enhance their international competitiveness. In the future development,  China’s lighting and LED china business,  only stand on the leading multinational companies, and learn fast and effective, can it be possible to achieve the target.

Guangzhou International Lighting Exhibition founder Dr. Pan Wenbo said, the international in the Guangzhou International Lighting Exhibition are mainly performs: First, to help domestic lighting enterprises fully demonstrated its position in the international arena, as they build a good platform to help enterprises international exchanges. Interactive for the benefit of corporate development, business model, management; followed by the international companies involved, to let the world’s most advanced technologies and products as well as brand concept to China.

At present, Many places local government practices is required to see the operation of the machine in order to give the support of corporate commitment. Many enterprises forced to support start production, resulting in high water level pressure on the stock. In order to alleviate the pressure on the stock, the companies began to cut sale price, so that there is no profit at all, eventually leading to the loss-making; There are some enterprises in order to ease the pressure on the stock, the product credit out, resulting in a huge trade receivables, and increase the risk of corporate finance.

Insiders analysis that the LED capacity surplus is not only because the strength of the market is enough, but also associated with a lot of irrational investment. Government support become the catalyst of this phenomenon. But the operation of the business need comprehensive consideration, such as sales channels, transportation, the supply industrial chain supporting facilities, labor costs, and personnel, etc.

At first, Sales channels, LED enterprises plant in somewhere, they need to consider the marketability of the product. Whether it is the international market or the local Chinese market? If the production base position shall not be ok, it will increase a considerable operating for enterprises.

Second, Transportation. If there is not convenient transportation line, the enterprise products to market cycle will be delay, which is not conducive to sales of the product and it will damage products from different degrees.

Third, Surrounding industrial chain. peripherals do not have a complete industrial chain, or the industry chain is not rich enough, so that it will increase the difficulty and cost of raw materials procurement.

Four, Talent. this is the core of the enterprise. The distribution of talent is regularly to be found. If enterprises where put into production can not find the right people, the core aspects of the production and R & D and sales is bound to bring trouble.

LED insider think that, LED industry is the emerging industries advocated by the government, but businesses should have long term plan in the operation of the project, a long-term view of the development of enterprises, because favorable government policies can not blindly invest in the LED industry. And presently, Capacity relative surplus resulted enormous pressure to the LED lights business, therefore, companies need more government support.

 

Doubt

In 2012, the net profit of some companies rely on government subsidies,which is more serious. The state subsidies occupy a large part of their profits; This can not help but provoke the questioned eyes of everyone. So the sustainability of this mode is also controversial.

The subsidies can be counted as corporate profits., The answer is yes! Listed companies Sanan Optoelectronics third quarter profit is 667 million yuan, including subsidies up to 328 million yuan, accounting for nearly half; On November 13, Sanan carried on the enormous financial to achieve the Taiwan Formosa Epitaxy, which is almost twice equity-it is the first private equity. And soon after followed came the news Sanan CDB borrowings of up to 5.5 billion; Look at BDO Runda, interim net profit is 120 million yuan in 2012, while government subsidies is up to 150 million yuan as much, compared to the three security I am afraid that surpasses it; the profits of the country star power subsidies accounted for approximately 25%.

In this regard, industry insiders questioned that, the national starting point is good, but excessive investment is precisely a big reason caused by industry overcapacity. From another perspective, the LED Lights, as a new LED industry, it is necessary to get support from the government, but whether it should be facing the end consumer subsidies? For Enterprises, enterprises who can obtain subsidies only account for a small part of the type of product. A small number of large enterprises are not always having everything if they have government funding. Government can give you a ride, but ultimately it depends on the enterprise’s own energy and strength.

Tension

In 2012, LED industry development is still facing many challenges. But influenced by the European debt crisis, the U.S. economic downturn and other factors, China LED companies exporting orders dropped sharply.

Lighting companies in particular, the industry began to centralized direction development, some of which have already accumulated enough strength to take advantage of this opportunity to develop a large-scale local lighting industry, and try to come out on top in the new round of competition in the industry, but the small and medium-sized enterprises who lack of core technology strength will face more severe survival problems.

entanglement

In early 2012, When you go to Hong Kong exhibitors, a 3W LED bulb called the price of 20 yuan, which will make the site once sensation, but now the lowest 3W bulb reach to single digits. In 2012, the price war in the LED industry is entangled, to low prices or keep price, it is difficult to avoid the problem.

Equally tangled problem is LED technology advances and new generation of products speeding quickly. The lack of a unified and standard LED products quality standard system, and thus on the market, there are quite a mixed bag, inevitably bad money drives out good money.

For prices downturn, the industry believes that at First, the global economic downturn. It is very unfavorable for the domestic LED enterprises rely mainly on export earnings; Second, the imbalance between supply and demand, the lack of demand, especially in the domestic market and in the low end products get together, it is too homogenization, so companies only enter into a price war. The result of the price war, it also means that the the industry reshuffle remodeling will be inevitable.

Nothing

In 2012, the leading traditional lighting companies once again be pushed to the cusp, the reason is not because of its large-scale transition to the LED industry, they are nothing out of the chaos of the senior management disputes, the situation is like watching the TV series, the dramatics person are like fighting, an outsider stunned, it can not help but secretly sigh, how does the leading enterprises? The operation and management of private enterprises in China must be hidden all the “clouds”? Or all a myth will have a day to burst?

On May 25, 2012, NVC announced said Wu Changjiang, resigned chairman, executive director and chief executive officer, and all his posts for personal reasons. Since then, the occurrence of disputes between NVC large shareholders Wu Chang jiang and Yan Yan; On September 4, civil unrest subsided, Wu Changjiang return to NVC; Currently, Wu Changjiang, SAIF, Schneider are the NVC’s three shareholders, Three Musketeers, and they finally shake hands.

Logically, the traditional lighting companies experienced market baptismin, and to have today’s fame and status, but what we worried about is that whether fragile management system, can really afford the heavy responsibility of leading Chinese lighting industry transition to the LED industry? The leading lighting big enterprises, are you okay?

In addition to the “successful biding”, some companies are also listed on the news, only the first half of 2012, there are eight LED companies successfully listed, six of which landed on the GEM. More than last year where listed seven. Another similar sense of joy: a growing number of G24 LED enterprises focus on the market, vigorously develop the channels, and pay attention to the difference advantage of market competition and strengthen the culture of investment in technology and brand.

Anxiety

In 2012, due to the price advantage is not obvious, and the quality is unstable factors,  LED industry applications market are limited. The market outbreak is not as expected, in the short term, it is difficult to see the clear signs of rapid growth. Capacity continued to enlarge, and can not stop, the rapid increase of firms intensified market competition, but the very anxious is that most bereavement market channels are not good enough, the inventory can not digest. LED enterprises seem very anxious and very confused.

Perhaps because of this, entrepreneurs and experts hold a lively discussion on LED electricity providers and traditional channels in 2012. More entrepreneurs lamented the current channels of dispute as volcanic eruptions.

Some companies began operations, including the construction of the Tmall online store, self-built e-commerce platform; more people in the industry believe that LED lighting e-commerce model is not yet mature, which is still in a stage of promotion. In addition to a good line stores, dealers channels, enterprises start to think about how online sales channels, brand promotion and offline traditional channels combined to form a full three-dimensional marketing communication channels.

Depression

In 2012, the structural surplus of production capacity has resulted in the rapid decline in the profitability of the business. The three quarterly of 2012, 20 enterprises have 11 enterprises who decline different degrees in net profit in the third quarter, real data feel the loss of these enterprises.

On the announcement, the companies said that the caused reason are mainly due to the decline in performance: whether domestic or foreign, by the international financial crisis and other factors, the poor performance of the LED industry, the overall market environment; fierce market competition, to occupy higher market share, the overall input plus, develop the domestic channels, increase research and development funding efforts to significantly reduce the net profit income;