Connector 2.00Mm Pitch,Ph Connector Accessories,Ph Connectors Accessories,Strip Wire Connectors YUEQING WEIMAI ELECTRONICS CO.,LTD , https://www.weimaiconn.com
In the past, Chaon Ming Technology (300232.SZ), which has won the display market share by channel, is now turning to the next lighting market.
In August 2012, Chau Ming Technology successfully won the bid for the Guangzhou-Shenzhen Expressway LED streetlight project and won over 6,000 LED streetlight replacement projects. According to industry sources, the reason why Zhouming Technology succeeded in winning the bid was because it proposed a set price of 20% lower than all invited companies and 20% higher performance.
When the news came out, it caused an uproar in the industry.
“Reducing 20% ​​means that the entire project will lose at least 10 million. For Zhou Ming Technology, which had a net profit of only 16.34 million yuan in the first half of this year, this is not a small amount.â€
According to other relevant person in charge of the bidding company, the bid for the Guangzhou-Shenzhen Expressway can not be achieved according to its technical parameters. However, for Zhouming Technology, this is another decision that has to be made.
From the listing in June last year, to the release of the first half of the financial report in June this year, the sales of Zhouming Technology have undergone major changes. For LED display companies, the continuous price war has led to a sharp drop in profits. Even Zhou Ming Technology, which has rich channel resources, is hard to respond quickly when faced with price competition pressure.
Rapid change in performance
According to the financial report data for the first half of 2012, Chau Ming Technology achieved operating income of 247 million yuan, a year-on-year increase of 5.43%, and net profit of 163,400 yuan, down 25.87% year-on-year.
The company explained that the downward pressure on the domestic macro economy continued to increase, the European economy continued to deteriorate, the US economic recovery was weak, and the global LED demand growth slowed down. In addition, driven by various support policies encouraged by the state, industry investment has increased, production capacity has expanded rapidly, and competition has intensified.
In fact, since the IPO was listed in June last year, the performance of Chaon Ming Technology has been slowing down. GLII statistics show that the company's operating income growth rate has rapidly declined from the high of 60.28% in 2010 to 5.43% in the first half of 2012. The net profit growth rate has been negative since 2011, from 86.04% in 2010 to 18.41% in 2011, and 9.98% in the first half of this year.
The performance and profitability of Chau Ming Technology declined. In fact, the main reason is the growth bottleneck in the LED display business.
In 2011, Chau Ming Technology's LED display revenue was 474 million yuan, a year-on-year increase of 1.69%. Compared with 2011, the LED display business accounted for more than 90% of the company's total revenue, with a compound annual growth rate of 30%. Zhouming Technology, which was listed on the LED business as its main business, is now facing a situation in which its main business is shrinking.
In April 2012, Chau Ming Technology, through the acquisition of Redio Optoelectronics, which is mainly engaged in creative display business, expects the company's display business to grow at a rate of 10%-20% for the whole year, basically maintaining steady growth.
"The acquisition of Redio has provided short-term performance support for the company's LED display business, but it still cannot prevent the LED display industry from continuing to decline in the short-term." Hua Hua Group sales Li Huanqiang said.
Channel encounter bottleneck
In fact, the main reason for the unilateral decline in the performance of the company is that the channel model on which the company depends is eroding. Zhouming Technology is one of the earliest LED display companies in China to establish a channel sales system. From 2008 to 2010, the company's professional channel customers grew rapidly, from more than 300 to nearly 700, which led to a rapid increase in sales of the company's display screens.
Li Huanqiang said that the biggest advantage of the channel is that it can open the market quickly, and the drawback is that more than half of the profits should be distributed to the channel.
According to GLII statistics, the gross profit margin of display channels has reached more than 30% in the past two years, while the average product gross margin of upstream display manufacturers has remained at 20%-25%.
Despite this situation, with the intensification of competition in the LED display industry and the decline in prices, although Zhouming Technology has a channel advantage, it has to step back. Especially after the company's IPO went public, under the dual pressure of sales and profits, Chau Ming Technology is in a dilemma. "To measure, it means sacrificing gross profit margin, but to profit, sales have to be reduced." In early March, the director of Lianjian Optoelectronics told Jian Yong that the LED display industry has entered an integration period. Because as new entrants increase, more and more companies are beginning to take the channel, and prices are lower. Zhou Ming’s channel model is even more difficult.
Since the second half of 2011, LED display companies such as Lianjian Optoelectronics and Ruituo Optoelectronics have established strategies for “walking on two legs†in engineering and channels, and vigorously develop channel dealers across the country and around the world. Not only listed companies and channel providers, many small and medium-sized LED companies are even more like peaks. 
Chau Ming Technology low-cost grab single lighting display or deposit bottleneck
[Text / "High-tech LED - Research and Review" August issue]