Since its entry into the GEM in 2011, Hongli Optoelectronics has increased its main business of LED packaging to 1.93% in the domestic market. After entering 2013, the LED packaging company has expanded its strategy to three major areas: packaging, general lighting, and automotive lighting.
In 2012, in the face of declining demand, Hongli Optoelectronics had postponed the production date of the investment and packaging capacity, which in turn accelerated the development of downstream automotive lighting and lighting products, that is, to the downstream application areas. However, Li Guoping also revealed to reporters that just this year, Hongli Optoelectronics has begun to expand production.
Carefully layout the three major industries
“We moved to the new factory last year. Taking into account the traffic situation of the employees, the local bus has been adjusted from the past 2 hours to 20 minutes. Our arrival has also promoted the local urbanization process.†Hongli Optoelectronics Dong secret Deng Shoutie smiled.
In the middle of last year, Hongli Optoelectronics relocated its factory to Guangzhou Huadu Airport High-tech Industrial Park. The plant area has expanded to 100,000 square meters, which is no less than a medium-sized residential community. There are a large number of land to be developed near the new plant. The past factory area was left to the Foday signal of the subsidiary of Hongli Optoelectronics. The move of Hongli Power Plant District also opened a chapter in its industrial layout.
At present, Hongli Optoelectronics has three subsidiaries: Lattice Lighting, a wholly-owned subsidiary, Fouda Signal, which holds 62% of the shares, and the heavyweight yuan, which was invested and controlled last year. Among them, the main business of Ledia is used by light, while the Foda signal specializes in automotive LED signal lights. The 80% of the holdings of the company are cut into the contract energy management method (EMC) to provide solutions for large-scale engineering projects.
In terms of business, although the company gradually expands into downstream applications, the LED packaging business has always been the strength of Hongli Optoelectronics. "Hongli Photoelectric has always attached importance to research and development. The annual research and development expenses are more than 20 million yuan, accounting for 5% to 8% of sales revenue." Chairman Li Guoping said that the company's market share has increased in recent years.
In fact, in the first half of 2012, Hongli Optoelectronics invested 16.60 million yuan in research and development expenses, accounting for 6.25% of revenue. Up to now, Hongli Optoelectronics has obtained 189 national patents, including 14 invention patents. In addition, Hongli Optoelectronics also set up a project department to undertake the non-EMC model of LED engineering, and further refine the division of labor, which is different from the business of Zhongyinggongyuan.
Hongli Optoelectronics LED general lighting will also be ready to go this year. In terms of talent introduction in the general lighting business, Ledia introduced a channel-experienced general manager and established a special sales team. In addition, in terms of channel expansion, the company has laid a few in more than ten provinces and cities nationwide. Ten stores have developed about 100 dealers.
The automotive signal and lighting business is currently in a period of sustained high growth. Fo Da signal successfully entered the pre-installation market of some auto manufacturers such as Great Wall Motor. “It is expected that the car headlights will generate a certain sales revenue in 2013 and gradually mass production in 2014.†Deng Shoutie told reporters.
Want to hold hands with international companies
After completing the industrial layout of the three aspects, Hongli Optoelectronics has stood on the new starting line. However, the company's most important move is still on its main profit source LED package.
Li Guoping revealed to reporters that just this year, Hongli Optoelectronics began to expand production. It is reported that the company has purchased equipment worth about 40 million yuan after the start of the year, and the equipment will be in place from the end of this month to the beginning of next month. "This year's packaging capacity will be around 1000kk / month, if better, it will reach the level of 1200kk / month to 1300kk / month." He said with confidence.
"Actually, we plan to expand production in 2012, but since the overall situation of the LED industry last year was not very good, this plan has not been implemented." Li Guo said.
Li Guoping’s remarks are that the overcapacity has been a topic of LED packaging in the past two years. LED chips are the core material of LED packaging. In the past two years, many LED companies in China have started to manufacture chips, which has brought serious problems in product homogenization.
Since faced with overcapacity, how can Hongli Optoelectronics invest heavily in expanding production capacity?
Li Guoping has another idea about overcapacity. In his view, the so-called overcapacity is a structural excess. For example, he said that three years ago, domestic consortiums got into the chip field, but due to the threshold problem, some companies must only be able to make small power chips in the initial stage, and it is impossible to make high-power chips. "Then, the low-end and low-power chips began to show excess conditions, and the final unit price even fell to 2 or 3 cents. But at that time, the high-power, medium-power chips were still tight, and the supply was tight."
Li Guoping said: "As a listed company, if there is a real overcapacity, we will definitely not spend so much money to purchase equipment at the beginning of the year. After all, the equipment for buying 40 million yuan is worth 100 million yuan two or three years ago. â€
According to the reporter's observation, at present, Hongli Optoelectronics has 4 factories, but only 2 are actually put into operation. In this regard, Li Guoping said that the company's plant has already prepared a capacity of 2000kk / month. At the time of design, it was considered to cooperate with large international LED companies. "Of course, we need to be wary of following the trend. For example, at some exhibitions, the products that everyone makes are very similar. Then, we can only rely on price to compete, which is not conducive to the development of the industry." Li Guoping said.
Three measures to deal with the decline in gross profit margin
After experiencing a large-scale investment rebalance in the entire LED industry chain in 2010, the situation in the second half of 2011 turned sharply. The entire LED industry chain was transmitted from the upstream to the whole industry, which eventually led to a sharp drop in prices and a sharp decline in gross profit margin. In this process, Hongli Optoelectronics is also difficult to escape.
Just half a month ago, Hongli Optoelectronics disclosed the 2012 annual performance report, and the company's performance has declined. Data show that last year, Hongli Optoelectronics achieved operating income of 529 million yuan, down 3.65% over the same period of the previous year, while net profit attributable to shareholders of listed companies was 47.846 million yuan, down 34.49% from the same period of the previous year.
The management of Hongli Optoelectronics is outspoken about the decline in profits. Dongshou Deng Shoutie explained that there are four main reasons for the decline in profits. First, the LED industry continued to perform poorly due to the impact of the international financial crisis last year. Although the government has introduced relevant policies for semiconductor lighting promotion, it will take time to implement it. Second, the company's relocation and operating expenses of the new industrial park have increased; third, the company's domestic channel network has begun to take shape, and market development takes a certain period of time; the last reason is that the company has increased its R&D investment.
In fact, the global LED industry continues to shift to mainland China, and foreign industry leaders have begun to set up factories in China. Driven by industrial policies, in the context of expanding market demand, more capital may enter the LED industry in the future, and the company will face more intense market competition, which will undoubtedly accelerate the decline of LED industry profits.
Li Guoping revealed that Hongli Optoelectronics has taken corresponding measures for the decline in gross profit margin last year and plans to deal with it in three aspects. According to the plan, first of all, Hongli Optoelectronics has adjusted the internal personnel accordingly to reduce personnel expenses.
On the other hand, the company has increased its investment in research and development costs and is committed to reducing costs in the production process. Li Guoping explained that although the increase in research and development expenses has affected the profit rate last year, this part of the expenditure is not only indispensable, but also to increase investment, so as to ensure a virtuous circle of the company. "Important research and development is the tradition of Hongli Optoelectronics!" Li Guoping said.
In addition, Hongli Optoelectronics will reduce procurement and production costs in the future to mitigate the impact of the decline in gross profit margin. "Compared with the past, our biggest change this year is management standardization and production refinement." Li Guoping said.
"Our original production is a hodgepodge, "sautéed with stir-fry", there is no fine management, but now, what kind of "material" we use for "dish", every workshop is doing the same thing every day, so that one Aspects are an optimization of our yield, and on the other hand, we will reduce our production costs," Li Guoping said.
In fact, depending on the type of device, the package typically accounts for 40% to 60% of the total cost of the LED lighting unit. Therefore, packaging represents the single largest opportunity cost, which is a necessary condition that can be fully accepted by the general lighting market. Hongli Optoelectronics is making great efforts in fine production, and it must be Li Guoping’s “the right medicineâ€.
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
In 2012, in the face of declining demand, Hongli Optoelectronics had postponed the production date of the investment and packaging capacity, which in turn accelerated the development of downstream automotive lighting and lighting products, that is, to the downstream application areas. However, Li Guoping also revealed to reporters that just this year, Hongli Optoelectronics has begun to expand production.
Carefully layout the three major industries
“We moved to the new factory last year. Taking into account the traffic situation of the employees, the local bus has been adjusted from the past 2 hours to 20 minutes. Our arrival has also promoted the local urbanization process.†Hongli Optoelectronics Dong secret Deng Shoutie smiled.
In the middle of last year, Hongli Optoelectronics relocated its factory to Guangzhou Huadu Airport High-tech Industrial Park. The plant area has expanded to 100,000 square meters, which is no less than a medium-sized residential community. There are a large number of land to be developed near the new plant. The past factory area was left to the Foday signal of the subsidiary of Hongli Optoelectronics. The move of Hongli Power Plant District also opened a chapter in its industrial layout.
At present, Hongli Optoelectronics has three subsidiaries: Lattice Lighting, a wholly-owned subsidiary, Fouda Signal, which holds 62% of the shares, and the heavyweight yuan, which was invested and controlled last year. Among them, the main business of Ledia is used by light, while the Foda signal specializes in automotive LED signal lights. The 80% of the holdings of the company are cut into the contract energy management method (EMC) to provide solutions for large-scale engineering projects.
In terms of business, although the company gradually expands into downstream applications, the LED packaging business has always been the strength of Hongli Optoelectronics. "Hongli Photoelectric has always attached importance to research and development. The annual research and development expenses are more than 20 million yuan, accounting for 5% to 8% of sales revenue." Chairman Li Guoping said that the company's market share has increased in recent years.
In fact, in the first half of 2012, Hongli Optoelectronics invested 16.60 million yuan in research and development expenses, accounting for 6.25% of revenue. Up to now, Hongli Optoelectronics has obtained 189 national patents, including 14 invention patents. In addition, Hongli Optoelectronics also set up a project department to undertake the non-EMC model of LED engineering, and further refine the division of labor, which is different from the business of Zhongyinggongyuan.
Hongli Optoelectronics LED general lighting will also be ready to go this year. In terms of talent introduction in the general lighting business, Ledia introduced a channel-experienced general manager and established a special sales team. In addition, in terms of channel expansion, the company has laid a few in more than ten provinces and cities nationwide. Ten stores have developed about 100 dealers.
The automotive signal and lighting business is currently in a period of sustained high growth. Fo Da signal successfully entered the pre-installation market of some auto manufacturers such as Great Wall Motor. “It is expected that the car headlights will generate a certain sales revenue in 2013 and gradually mass production in 2014.†Deng Shoutie told reporters.
Want to hold hands with international companies
After completing the industrial layout of the three aspects, Hongli Optoelectronics has stood on the new starting line. However, the company's most important move is still on its main profit source LED package.
Li Guoping revealed to reporters that just this year, Hongli Optoelectronics began to expand production. It is reported that the company has purchased equipment worth about 40 million yuan after the start of the year, and the equipment will be in place from the end of this month to the beginning of next month. "This year's packaging capacity will be around 1000kk / month, if better, it will reach the level of 1200kk / month to 1300kk / month." He said with confidence.
"Actually, we plan to expand production in 2012, but since the overall situation of the LED industry last year was not very good, this plan has not been implemented." Li Guo said.
Li Guoping’s remarks are that the overcapacity has been a topic of LED packaging in the past two years. LED chips are the core material of LED packaging. In the past two years, many LED companies in China have started to manufacture chips, which has brought serious problems in product homogenization.
Since faced with overcapacity, how can Hongli Optoelectronics invest heavily in expanding production capacity?
Li Guoping has another idea about overcapacity. In his view, the so-called overcapacity is a structural excess. For example, he said that three years ago, domestic consortiums got into the chip field, but due to the threshold problem, some companies must only be able to make small power chips in the initial stage, and it is impossible to make high-power chips. "Then, the low-end and low-power chips began to show excess conditions, and the final unit price even fell to 2 or 3 cents. But at that time, the high-power, medium-power chips were still tight, and the supply was tight."
Li Guoping said: "As a listed company, if there is a real overcapacity, we will definitely not spend so much money to purchase equipment at the beginning of the year. After all, the equipment for buying 40 million yuan is worth 100 million yuan two or three years ago. â€
According to the reporter's observation, at present, Hongli Optoelectronics has 4 factories, but only 2 are actually put into operation. In this regard, Li Guoping said that the company's plant has already prepared a capacity of 2000kk / month. At the time of design, it was considered to cooperate with large international LED companies. "Of course, we need to be wary of following the trend. For example, at some exhibitions, the products that everyone makes are very similar. Then, we can only rely on price to compete, which is not conducive to the development of the industry." Li Guoping said.
Three measures to deal with the decline in gross profit margin
After experiencing a large-scale investment rebalance in the entire LED industry chain in 2010, the situation in the second half of 2011 turned sharply. The entire LED industry chain was transmitted from the upstream to the whole industry, which eventually led to a sharp drop in prices and a sharp decline in gross profit margin. In this process, Hongli Optoelectronics is also difficult to escape.
Just half a month ago, Hongli Optoelectronics disclosed the 2012 annual performance report, and the company's performance has declined. Data show that last year, Hongli Optoelectronics achieved operating income of 529 million yuan, down 3.65% over the same period of the previous year, while net profit attributable to shareholders of listed companies was 47.846 million yuan, down 34.49% from the same period of the previous year.
The management of Hongli Optoelectronics is outspoken about the decline in profits. Dongshou Deng Shoutie explained that there are four main reasons for the decline in profits. First, the LED industry continued to perform poorly due to the impact of the international financial crisis last year. Although the government has introduced relevant policies for semiconductor lighting promotion, it will take time to implement it. Second, the company's relocation and operating expenses of the new industrial park have increased; third, the company's domestic channel network has begun to take shape, and market development takes a certain period of time; the last reason is that the company has increased its R&D investment.
In fact, the global LED industry continues to shift to mainland China, and foreign industry leaders have begun to set up factories in China. Driven by industrial policies, in the context of expanding market demand, more capital may enter the LED industry in the future, and the company will face more intense market competition, which will undoubtedly accelerate the decline of LED industry profits.
Li Guoping revealed that Hongli Optoelectronics has taken corresponding measures for the decline in gross profit margin last year and plans to deal with it in three aspects. According to the plan, first of all, Hongli Optoelectronics has adjusted the internal personnel accordingly to reduce personnel expenses.
On the other hand, the company has increased its investment in research and development costs and is committed to reducing costs in the production process. Li Guoping explained that although the increase in research and development expenses has affected the profit rate last year, this part of the expenditure is not only indispensable, but also to increase investment, so as to ensure a virtuous circle of the company. "Important research and development is the tradition of Hongli Optoelectronics!" Li Guoping said.
In addition, Hongli Optoelectronics will reduce procurement and production costs in the future to mitigate the impact of the decline in gross profit margin. "Compared with the past, our biggest change this year is management standardization and production refinement." Li Guoping said.
"Our original production is a hodgepodge, "sautéed with stir-fry", there is no fine management, but now, what kind of "material" we use for "dish", every workshop is doing the same thing every day, so that one Aspects are an optimization of our yield, and on the other hand, we will reduce our production costs," Li Guoping said.
In fact, depending on the type of device, the package typically accounts for 40% to 60% of the total cost of the LED lighting unit. Therefore, packaging represents the single largest opportunity cost, which is a necessary condition that can be fully accepted by the general lighting market. Hongli Optoelectronics is making great efforts in fine production, and it must be Li Guoping’s “the right medicineâ€.
(This article is reproduced on the Internet. The texts and opinions expressed in this article have not been confirmed by this site, nor do they represent the position of Gaogong LED. Readers need to verify the relevant content by themselves.)
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