China's LED industry development opportunities and challenges coexist
1. The growth rate is slowing down. In 2018, the LED industry as a whole entered the post-lighting era, the general lighting market encountered a replacement bottleneck, and growth was weak. According to the statistics of China LED Industry Market Preview and Investment Strategic Planning Analysis Report released by Prospective Industry Research Institute. In 2014, the output value of China's LED lighting industry reached 161.9 billion RMB. In 2015, the output value of China's LED lighting industry exceeded 200 billion RMB. As of 2017, the output value of China's LED lighting is close to 300 billion RMB, an increase of nearly 21% year-on-year, and the global proportion is 55.40%. With the international giants divesting the general lighting business, the output value will continue to increase. It is estimated that the output value of China's LED lighting industry will reach 341.5 billion RMB in 2018, a year-on-year increase of 15%. It is predicted that in 2020, the output value of China's LED lighting industry will reach 445 billion RMB, and the global share is expected to reach 61%.
Although China's general LED lighting market is still growing steadily, the overall growth momentum has slowed significantly. The LED market growth slowed down and the growth momentum of the company was insufficient. While raw material prices and labor costs continue to rise, the price of LED products has been declining, resulting in the compression of profit margins, which affects the performance of LED companies.
From the results of the first three quarters of LED listed companies this year, nearly half of the company's net profit showed a negative growth. In the current situation of internal and external difficulties, compared with the performance of the same period last year and the mid-year report, the overall performance of A-share listed companies in the third quarter fell slightly, and the performance of lighting manufacturers was not outstanding.
2. Trade friction
The trade friction that lasted for half a year has greatly affected the growth rate of the domestic economy; at the same time, it has also restricted the export of Chinese products to the United States to a certain extent.
As far as the LED lighting industry is concerned, the United States has a vast territory and a large population base, so it’s LED lighting products are used in considerable quantities. As of 2017, the US LED lighting market is US$15.6 billion. It is expected that the US LED lighting market will maintain a 5-10% growth in the next five years.
The United States is China's largest single-purpose destination for LED lighting exports. In 2017, LED lighting products exported to the United States accounted for nearly 27% of China's total LED lighting exports, with exports reaching US$5.570 billion, up nearly 60% year-on-year. Influenced by the Sino-US trade war, China’s export of LED lighting products to the United States in the first three quarters was US$4.041 billion, down 5.5% year-on-year.