LED replaces the post-tidal capital game

Observing the LED industry from the perspective of investment institutions, the first thing to note is that the market size of the LED industry has entered a new stage of rapid growth since 2013. Industry data show that the average annual growth rate of the LED industry reaches 30% to 50%. Listed companies are the most typical representatives in the industry. From the statistical data of listed companies, revenue and profits in the first half of 2014 are double-growth. Xu Wei, president of Glorious Asset Management (Beijing) Co., Ltd., frankly stated that such a rapidly growing industry is rare in today's economic environment.

China is a big country for LED production and also a big LED consumer. . According to Zang Bo, Deputy Secretary General of the National Semiconductor Lighting Engineering R&D and Industry Alliance, in this large market and production area, the leading enterprise of global leadership must be bred. From now on, it can be helped by financial means. This effect.

In the recent 3-5 years, LED production capacity has gradually shifted from the United States, Japan, and the European Union to mainland China. In this process, the level of industry integration is also increasing. If the analysis is based on the midstream and downstream, the integration and strength in the middle and lower reaches will be higher.

However, various confusions have also arisen in the process of mergers and acquisitions using financial instruments.

LED M & A tide

From the point of view of mergers and acquisitions, from 2013 to now, there are many cases of integration among listed companies, and listed companies have initiated nearly 30 industry integration cases. From the situation seen here, it is still a large company to integrate small companies. From 2015 onwards, M&A integration cases will be more intensive.

But there may be two main situations. The first one is the large and small one that was originally defined. The strong and weak model is not the only one, but there will be strong mergers and acquisitions or strong integration; secondly, the LED itself is more of an indoor lighting. , outdoor lighting products and product lines, or the integration of the industry line, but the next trend is the emergence of cross-border integration. People's lives can not be separated from light, whether it is day or night, it is not just the eyes to see the lighting of the environment, now more and more widely used, beginning in 2015, the proportion of cases of cross-border integration will further increase.

From a financial point of view, there is a theoretical basis. Although the LED market is growing, in fact, in terms of the growth of gross profit margin and net profit rate, many companies have to decline, and the pressure on fund occupation will become more apparent. Enterprises that have acquired mergers and acquisitions in the industry will adopt two most direct methods. One is to use the mobilization platform of the listed company's capital market, and the other is to integrate the industrial power and financial power. This is a frequently used method of industry consolidation.

From the perspective of China's current maturity of the A-share market and the maturity of the financial investment market, industry consolidation is imperative and there is ample market space. However, the current industry is relatively decentralized, and there are not enough large companies, and each company is likely to have Through a one-year or three-year market advantage or a strategic advantage, a new leap will be achieved because everyone is sprinting at a similar market value scale or the scale of the business scale, and integration is justified for the next step. .

M&A risk

From the perspective of the domestic industry, the case of mergers and acquisitions by listed companies is a surge. In the first three quarters, listed companies carried out 13 important mergers and acquisitions, the total transaction volume reached 4.7 billion yuan, the total amount is relatively small, M & A events are mainly reflected in SMEs intermediate. Coverage of the industries involved in the upper and lower reaches, the two sides of the strait, the company hopes to quickly break through technology, patent barriers through acquisitions, shareholding, highlighting the advantages of scale.

However, there are certain risks in the integration of mergers and acquisitions, industry mergers and acquisitions may not be able to achieve 1 +1 greater than 2 results, mergers and acquisitions by listed companies still have risks, the need for more resources, the involvement of financial services institutions can be achieved after mergers and acquisitions, report results Promote.

The same is true of the LED industry. M & A is nothing more than the pursuit of bigger and stronger. M & A seekers are mainly seeking large trees to help companies get through some "junction." However, after mergers and acquisitions, the integration between companies becomes the biggest obstacle. If it takes at least one year and a half to run in, it will take several years or even empty the original team. In the end, there is only one “empty shelf”, which is called “internal conflict.”

Judging from the current cases of investment and mergers and acquisitions, many companies married to the past did not "live" very moist, and the "wife" business did not grow rapidly. "For M&A cases, M&A's primary solution is not development, but decision-making rights." Insiders stressed that if this internal conflict is not resolved properly, it will affect the company's development process, and it will affect the enthusiasm of the entire company. Lead to the merger of two companies to achieve less than 1 +1 effect.

In addition, judging from the current overall trend in the capital chain, the alternative capital game presents a major situation, with the Matthew effect, and the stronger and the stronger are stronger. The sustainable development of enterprises needs to face and the industry tends to be mature, that is, from technological competition, product competition, channel competition to current capital competition.

Judging from the current situation of the entire market, especially this year, there has been a very interesting phenomenon, large companies may be in foreign countries, including OSRAM, Philips, etc. On the contrary, domestic companies are integrating. Liang Jun, general manager of the M&A Financing Headquarters of Southwest Securities Co., Ltd., said that the main purpose of splitting and combining is to optimize the allocation of resources and promote the adjustment and transformation of the industrial structure, not to say that the points are good or good.