China LED Industry Speeding Up Development

From investigation and some industry seminars that recently held in several areas

by senior engineer LED, the reporter knew the phenomenon that the VC institutions rush to invest LED items are very many, and even appears the situation that you still can't enter into it even if you have plenty money. A financing case happened in Wuhan AquaLite Photoelectric Technology Co., Ltd. this year was a classic portrayal of LED industry financing stories. As the domestic largest professional manufacturer of producing high-brightness and high-power white LED power chip, Wuhan AquaLite carried out the third round, a total of 150 million yuan financing plan, which quickly attracted a number of institutional investors. Many institutions who want to become shareholders were turned down outside such as Hunan New Energy and Industrial Venture Capital Fund.

At present the valuation of lighting industry is not low when calculate according to static valuation. Mr. Zhang Xiaofei, the senior engineer LED CEO, said there are different valuation methods for different companies. Take a large and mature company with annual output from 50 million to 100 million yuan as an example, it can be valuated usually according to the next 3 to 5 years' net assets, net assets income ratio and price-earnings ratio. It is usually as 5 to 8 times as the net assets, also it may be more than 10 times. Part valuation of Wuhan AquaLite is based on price-earning ratio. Although it has turned losses into gains formally in the end of this year, but the additional price of Wuhan AquaLite is 5 yuan per share. The basis is that in 2012 the profit is expected as about 1 yuan per share and it plans to be listed in the next 3 years, so the additional price will be about 5 yuan per share, which is programmed as 20 times as price-earnings ratio after listing.

For this, Mr. WU Zhihong, the chairman of Wuhan AquaLite is obviously regret than joy, said that was sold cheaply, the price will not be this if we can have the financing half a year later. When formulating the financing project we have not made profit yet, now the market situation is well and Wuhan AquaLite also has went out of the break-even point. Mr. Zhang Xiaofei said this is not an individual phenomenon, with the support policy implementation and market heating since the second quarter of this year, the profit of LED industry has increased a lot or turned losses generally. Therefore, now when enterprises have the financing, they should considering not only the historical compound annual growth rate, but also several factors that influence industry and enterprises speeding up their development and growth, the premium rate is usually much higher than six months or even a quarter ago.

In this regard, Mr. Wei Zhansheng, the senior manager of Hunan New Energy and Industrial Venture Capital Fund, he understood this and said, compared with the simplex financial shares, LED companies pay more attention on the resources that the investors owned. For example, Jiuzhou Group that is introduced by Wuhan AquaLite has resources of LED packaging industry development, so it has quickly become Wuhan AquaLite downstream products partner. After they join together, it will help Wuhan AquaLite become bigger and stronger.

Several enterprises think that financing is used to expand production capacity. When reporter asked whether China LED lighting industry will follow the footsteps of solar cells substantial excess production capacity with the expansion pace accelerating, the industry seems not worried. Wei Zhansheng said, China is already the world largest solar cell manufacturing base, and LED lighting is still far from this stage. In addition, the demand for solar cell industry is mainly from overseas, so it will has great impact by financial crisis; and the domestic demand for LED lighting is huge, so it is not easy to be impacted seriously by outside.

Above provided by SelectChina.com, and find more China lighting Manufacturers / China lighting Products.

China LED Industry Speeding Up Development

By: Deland Selectchina

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