[Source: "High-tech LED - Research and Review" July issue Tang Guirong]
Recently, the high-tech LED reporter received a number of insiders broke the news: a certain LED company has closed down; a company has experienced operational difficulties, arrears of employees for several months; a problem with a company's capital chain, arrears with suppliers Ten thousand arrears, and so on.
The reporter found that most of these companies are from the LED display industry. According to the monitoring data of the High-tech LED Industry Research Institute (GLII), there are as many as 200 LED display companies in the first half of this year. Following the closure of Shenzhen Vision Optoelectronics this month, a number of old-fashioned LED display companies with annual sales scales including Lian Teng Optoelectronics and Liangcai Optoelectronics have frequently heard news and experienced different levels of management difficulties.
"The collapse of the tide is the only way for the development of the LED display industry. Large enterprises will live better." Rui Tuo show chairman Shi Yaozhong said that with the intensification of the financial crisis, the domestic LED display industry will usher in this round. A cruel shuffle, a relatively large company will live better.
According to GLII statistics, there are more than 100 LED display companies with a domestic scale of more than 100 million yuan. Many SMEs struggling on the edge of life and death have finally fallen, and the rest are either transforming LED lighting or continuing to struggle.
Capital chain "difficulties"
At present, domestic LED display companies are all in the form of installment payment: that is, the customer pays a 30% deposit first, and after the display is finished, pay a part of the payment, and finally accept the inspection. If there is no problem, then pay the final payment.
It is understood that even if the acceptance is correct, the situation of the customer's arrears is still very common and serious. “For some large-scale projects, the entire payment process takes at least 3 months.†Hu Chuping, deputy director of the Hida Electronics Shanghai R&D Center.
If the product has quality problems or the acceptance is unqualified, it is another situation. “Enterprises not only have to re-repair, but the final payment is to be settled in stages, and this means that the display companies are making money at the loss.†Shi Yaozhong said that if the company does not establish a credit system and evaluates customers, it will be difficult to get The balance.
On the one hand, customers are dragging, and on the other hand, LED display companies have to face the duplication of upstream suppliers.
According to the reporter's understanding, at present, the payment method of the display company to the supplier is basically paid by the 60-day monthly payment. This undoubtedly poses a great challenge to the financial strength of enterprises.
“If you have a better relationship with suppliers and can gain their trust, the supplier’s payment can be extended when the company encounters difficulties in capital turnover.†Shi Yaozhong emphasized that in fact, suppliers are more important than customers, if Brent and Vision Optoelectronics At a time of crisis, suppliers, especially major raw material suppliers, can help, and they can still survive.
To this end, Shi Yaozhong suggested that enterprises should strengthen the establishment of internal management, especially the credit system, and do not be too eager to expand.
Hu Chuping said that the LED display industry has a low barrier to entry, and it is very easy to set up a company because some sales personnel take away some customers from the original company and become familiar with the channels. Hu Chuping analyzed that relatively speaking, these enterprises also have some problems, including insufficient funds, insufficient control over technology, quality, patents, and extremely low risk resistance. "And these problems are precisely one of the main reasons for the current "triangular debt" cycle in the LED display industry."
The trip of the triangular debt has its inevitable factors, and the increasingly fierce price war is the trigger for the deterioration of the "triangular debt". Chen Tiewen, the sales director of Gewei Optoelectronics, believes that “as long as large companies initiate price wars, the development of SMEs is bound to be challenged by a new round. Because the price war is behind the rapid decline in profit margins.â€
Slight profit
In fact, the price war of domestic large-scale LED display companies has already been staged.
Since the beginning of this year, a number of listed companies, including Chau Ming Technology and Lian Jian Optoelectronics, have launched a new round of price wars. The original full-color LED display of more than 7,000 yuan per square meter, the price has now dropped to 2,999 yuan.
Coincidentally, the results of the first half of this year announced by the two listed companies revealed a clue. Among them, Zhou Ming Technology expects net profit attributable to shareholders of listed companies in the first half of this year to decrease by 10.16%-31.76% compared with the same period of the previous year. Lianjian Optoelectronics expects net profit attributable to shareholders of listed companies in the first half of this year to fall by 0%-25% compared with the same period of the previous year.
Although the price war can quickly increase sales, it means a decline in profits. Especially for SMEs, it means the market space that is constantly being squeezed, and the risk of the capital chain that comes with it.
According to the reporter, although the sales of many companies are close to 300 million, the net profit is less than 20 million yuan, and many of them have a net profit margin of less than 5%.
At the same time, the market growth rate is very tired. According to GLII data, the output value of China's LED display in 2011 reached 21.9 billion yuan, an increase of 18% year-on-year. Compared with the growth rate of 54% in 2010, it has fallen sharply. GLII expects that by 2015, the global LED display market will maintain an annual growth rate of 10%-20%.
"In order to continue to survive, companies still have to bite their teeth to cut prices." Chen Tengwen said that many display companies this year began to reduce operating costs from within the company in order to save costs.
Recently, many employees of small and medium-sized LED display companies complained to reporters that the company has defaulted on employees for several months. The reporter learned that at present, some enterprises with a scale of 100 million in China do have different levels of operational difficulties. Some enterprises have reduced their employees from within the company in order to solve the economic crisis. According to further investigations by the reporter, these operational difficulties are largely due to the high receivables, and some accounts receivable amounted to several tens of millions of yuan. “Triangular debts put companies in a difficult position.â€
Hu Chuping said that LED display companies compete for scale and use scale to make profits. Small and medium-sized display manufacturers without sales will be very difficult to live.
Recently, the high-tech LED reporter received a number of insiders broke the news: a certain LED company has closed down; a company has experienced operational difficulties, arrears of employees for several months; a problem with a company's capital chain, arrears with suppliers Ten thousand arrears, and so on.
The reporter found that most of these companies are from the LED display industry. According to the monitoring data of the High-tech LED Industry Research Institute (GLII), there are as many as 200 LED display companies in the first half of this year. Following the closure of Shenzhen Vision Optoelectronics this month, a number of old-fashioned LED display companies with annual sales scales including Lian Teng Optoelectronics and Liangcai Optoelectronics have frequently heard news and experienced different levels of management difficulties.
"The collapse of the tide is the only way for the development of the LED display industry. Large enterprises will live better." Rui Tuo show chairman Shi Yaozhong said that with the intensification of the financial crisis, the domestic LED display industry will usher in this round. A cruel shuffle, a relatively large company will live better.
According to GLII statistics, there are more than 100 LED display companies with a domestic scale of more than 100 million yuan. Many SMEs struggling on the edge of life and death have finally fallen, and the rest are either transforming LED lighting or continuing to struggle.
Capital chain "difficulties"
At present, domestic LED display companies are all in the form of installment payment: that is, the customer pays a 30% deposit first, and after the display is finished, pay a part of the payment, and finally accept the inspection. If there is no problem, then pay the final payment.
It is understood that even if the acceptance is correct, the situation of the customer's arrears is still very common and serious. “For some large-scale projects, the entire payment process takes at least 3 months.†Hu Chuping, deputy director of the Hida Electronics Shanghai R&D Center.
If the product has quality problems or the acceptance is unqualified, it is another situation. “Enterprises not only have to re-repair, but the final payment is to be settled in stages, and this means that the display companies are making money at the loss.†Shi Yaozhong said that if the company does not establish a credit system and evaluates customers, it will be difficult to get The balance.
On the one hand, customers are dragging, and on the other hand, LED display companies have to face the duplication of upstream suppliers.
According to the reporter's understanding, at present, the payment method of the display company to the supplier is basically paid by the 60-day monthly payment. This undoubtedly poses a great challenge to the financial strength of enterprises.
“If you have a better relationship with suppliers and can gain their trust, the supplier’s payment can be extended when the company encounters difficulties in capital turnover.†Shi Yaozhong emphasized that in fact, suppliers are more important than customers, if Brent and Vision Optoelectronics At a time of crisis, suppliers, especially major raw material suppliers, can help, and they can still survive.
To this end, Shi Yaozhong suggested that enterprises should strengthen the establishment of internal management, especially the credit system, and do not be too eager to expand.
Hu Chuping said that the LED display industry has a low barrier to entry, and it is very easy to set up a company because some sales personnel take away some customers from the original company and become familiar with the channels. Hu Chuping analyzed that relatively speaking, these enterprises also have some problems, including insufficient funds, insufficient control over technology, quality, patents, and extremely low risk resistance. "And these problems are precisely one of the main reasons for the current "triangular debt" cycle in the LED display industry."
The trip of the triangular debt has its inevitable factors, and the increasingly fierce price war is the trigger for the deterioration of the "triangular debt". Chen Tiewen, the sales director of Gewei Optoelectronics, believes that “as long as large companies initiate price wars, the development of SMEs is bound to be challenged by a new round. Because the price war is behind the rapid decline in profit margins.â€
Slight profit
In fact, the price war of domestic large-scale LED display companies has already been staged.
Since the beginning of this year, a number of listed companies, including Chau Ming Technology and Lian Jian Optoelectronics, have launched a new round of price wars. The original full-color LED display of more than 7,000 yuan per square meter, the price has now dropped to 2,999 yuan.
Coincidentally, the results of the first half of this year announced by the two listed companies revealed a clue. Among them, Zhou Ming Technology expects net profit attributable to shareholders of listed companies in the first half of this year to decrease by 10.16%-31.76% compared with the same period of the previous year. Lianjian Optoelectronics expects net profit attributable to shareholders of listed companies in the first half of this year to fall by 0%-25% compared with the same period of the previous year.
Although the price war can quickly increase sales, it means a decline in profits. Especially for SMEs, it means the market space that is constantly being squeezed, and the risk of the capital chain that comes with it.
According to the reporter, although the sales of many companies are close to 300 million, the net profit is less than 20 million yuan, and many of them have a net profit margin of less than 5%.
At the same time, the market growth rate is very tired. According to GLII data, the output value of China's LED display in 2011 reached 21.9 billion yuan, an increase of 18% year-on-year. Compared with the growth rate of 54% in 2010, it has fallen sharply. GLII expects that by 2015, the global LED display market will maintain an annual growth rate of 10%-20%.
"In order to continue to survive, companies still have to bite their teeth to cut prices." Chen Tengwen said that many display companies this year began to reduce operating costs from within the company in order to save costs.
Recently, many employees of small and medium-sized LED display companies complained to reporters that the company has defaulted on employees for several months. The reporter learned that at present, some enterprises with a scale of 100 million in China do have different levels of operational difficulties. Some enterprises have reduced their employees from within the company in order to solve the economic crisis. According to further investigations by the reporter, these operational difficulties are largely due to the high receivables, and some accounts receivable amounted to several tens of millions of yuan. “Triangular debts put companies in a difficult position.â€
Hu Chuping said that LED display companies compete for scale and use scale to make profits. Small and medium-sized display manufacturers without sales will be very difficult to live.
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