Zhejiang Sunshine - LED lights, energy-saving lamps and share the growth of the lighting market

High-tech LED network message / Meng Dan

With the concept of LED and the growth of its performance, Zhejiang Sunshine has stepped out of the market in the market, but is there any investment value at the current stage? The author uses SWOT analysis to evaluate Zhejiang Sunshine. Through analysis, the author believes that the current contribution of LED products to Zhejiang Sunshine is still small, and there is a certain risk to the current higher PE.

First, the advantage (S)

(1) Continuous optimization of product structure

Zhejiang Sunshine's main products are integrated electronic energy-saving lamps (expanding small-capacity, thin-diameter, high-power and other energy-saving lamps), T5 high-power fluorescent lamps and supporting lamps and special lamps, while metal halide lamps, high-pressure sodium lamps, and LED lighting. As products continue to emerge, product structure optimization is reflected in the proportion of high-end products (such as T2 pipe diameter energy-saving lamps). Zhejiang Sunshine has formed three production bases in Zhejiang Shangyu, Jiangxi Yingtan and Fujian Xiamen. The product positioning is different.
  Estimated production time product
Zhejiang Shangyu 2001 A full range of energy-saving lamps, T5, lamps, phosphors, mainly facing the Chinese, Asian and European markets
Jiangxi Yingtan 2010 Energy-saving lamps, mainly facing global OEM customers, with a production capacity of about 100 million
Fujian Xiamen 2011Q3~Q4 LED energy-saving lighting products, T2 environmental protection energy-saving lamps and MRT recycling treatment, high-efficiency environmental protection energy-saving lamps, mainly facing the North and South American market

Table 1 Distribution, production time and products of Zhejiang Sunshine Base (Source: Company Report and Field Capital)

At the same time, the company's industrial integration has gradually expanded. In 2009, 51% of the company invested Zhejiang Yuanyang Lighting Co., Ltd. and acquired a 50% stake in Hangzhou Hanguang Lighting Co., Ltd. to produce glass tubes and glass bulbs for raw materials and high-intensity gas discharge lamps.
In 2009, the company's LED lighting has entered the small and medium batch production from the research and development stage and introduced into the market. It has entered the mainstream supermarkets in Europe and won the bid for key projects such as the Shanghai World Expo.

Zhejiang Sunshine has a total of 9 products in the 2010 semiconductor lighting product application demonstration project, including LED road lights/tunnel lights, LED downlights and reflective self-ballasted LED lights. Ranked fourth in all 28 companies, fully reflecting the company's technical strength in the field of LED lighting.

  Road tunnel lighting LED products LED downlight Reflective sub-ballast LED lights total
Zhejiang Shenghui Lighting 8 6 4 18
Jiangsu Shifu Photoelectric 6 2 2 10
Beijing Beijing Langbo Optoelectronics 9 0 0 9
Zhejiang sunshine 3 1 5 9
Shanghai Sansi Electronic Engineering 8 0 0 8
Xi'an Liming Electronic Technology 8 0 0 8
Dongguan Qinshang 8 0 0 8
Crystal energy photoelectric 8 0 0 8
Philips China 5 2 0 7
Zhejiang Xiongbang Energy Saving Products 4 2 1 7
Shanxi Guangyu 4 1 0 5
Zhejiang Qiushi Information 5 0 0 5
Shanghai Mingkai 0 0 4 4
Huizhou NVC 0 0 4 4
Ningbo Liaoyuan 4 0 0 4
Medium-light optoelectronics 5 0 0 5
Wu Jiang William Photoelectric 0 0 3 3
Zhejiang Jingri 3 0 0 3
Shenzhen Spike 3 0 0 3
Panasonic Electrician 0 2 0 2
Zhejiang Mingxin 2 0 0 2
Dajin Jingdian Energy Management 2 0 0 2
The 13th China Electronics Technology Group Corporation 1 0 0 1
Sichuan Grande 0 1 0 1
Inspur Group 1 0 0 1
Shenzhen Zhongdian 0 1 0 1
Huizhou Yuanhui 0 0 0 1
Xiamen Donglin 0 0 0 1
total 95 18 25 138

Table 2 List of successful bidders for semiconductor lighting product application demonstration projects in 2010 , number of successful bidders (data source: LEDinside)

It is worth noting that the listed companies in the winning bidders are only Zhejiang Sunshine. Among them, Huizhou NVC was listed in Hong Kong on May 20, 2010, and China Micro-Optical Electronics plans to go public in the second half of 2011. At the same time, most of the successful bidders are packaging and application product manufacturers, and most of them use imported chips, indicating that there is still a big gap in the quality of domestic chips.

(2) Increased brand awareness

In 2009, the company ranked first in the national procurement bidding for energy-saving lighting products, and Vietnam's own brand ranked the top three in the local market. The Indian base achieved localized production and sales of its own brands, and European companies' own brands have entered the mainstream market. And channels, US companies began to operate their own brands. In 2010, about 40% of the products were self-owned brands.
The domestic market all uses its own brand, and its gross profit margin is higher than that of its export products. In the first half of 2010, the domestic market accounted for 33.27%, which was much higher than 26.13% in the same period of 2009.

Second, disadvantages (W)

(1) Capacity still has bottlenecks

The company's production capacity in 2009 will be 280 million, and will reach 400 million by the end of 2010, and will reach 600 million by the end of 2011. Among them, the 200 million capacity of the Xiamen base is expected to be released in the second half of 2011. The actual production and production capacity are different. The overtime production can be increased by about 25% in the short term, but it is not sustainable. Due to capacity constraints, the company's single-quarter revenue will be around 500 million in 2010. The first phase of the LED plant will be put into operation in the second half of 2011, and the production time is also late. Moreover, there is a large gap between production capacity and actual production.

(2) Gross profit has decreased

In the third quarter of 2010, the company's gross profit margin dropped sharply to 15.13%, which is related to the company's participation in the promotion of high-efficiency lighting products. For example, the bidding price of the winning bidders in 2010 was on average 40% lower than the market retail price, and the state subsidies accounted for 50% of the sales amount. %, subsidies are directly recorded in non-operating income and are not recorded in income. If the impact of this factor is excluded, the part will be reduced to income. The company's gross profit margin for the reporting period should rise to about 20%, and there is still a certain decline.

  First quarter of 2010 Second quarter of 2010 Third quarter of 2010
Single season gross profit 30.29% 22.22% 15.13%

Table 3 Zhejiang Sunshine Single Quarter Gross Profit in 2010 (Source: Company Report)

(3) Business model needs to be improved

The product personalization design, lighting environment design, system service and other services have not been widely carried out in operation, and the overall service provisioning capability and rapid response capability of lighting need to be strengthened in the future.

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