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Q3 outlook is not optimistic about the performance of LED light bulbs prices continue to decline

2016-10-22

Ping An Securities News, LED manufacturers in Taiwan area in July revenue data released. Data show that in July Taiwan area 8 LED business revenue compared to the same period last year declined, which 6 companies revenue decline. From the cumulative revenue growth point of view, the 8 major LED companies in Taiwan, there are 4 enterprises in the cumulative revenue growth rate of negative.

LED market sentiment continued to decline, 15Q3 outlook is not optimistic

July, Taiwan LED package index fell from 3562 points to 3111 points, a decline of 12.66%, the same period in Taiwan electronic components index dropped from 81.04 points to 73.97 points, a decline of 8.72%. In addition, the 8 major LED enterprises in Taiwan in July revenue growth was negative, which 6 companies in July revenue growth rate of negative, 4 companies 1-7 month cumulative revenue was declining trend. July Taiwan LED factory overall revenue slowdown, the market boom degree inferior in June, coupled with the recent international lighting manufacturers of low-cost clearing inventory to bring the negative impact of LED lighting, 15Q3, Ping An Securities believes that the outlook is not optimistic.

LED light bulb prices continue to decline to stimulate the LED lighting penetration rate increase

According to the LEDinside survey, in July, the global replacement of LED 40W light bulb retail price of $11.1 (-5.6%MoM); to replace the LED 60W bulb global average price of $15.2 (-3.3%MoM). Of which: 1) the largest United States price drop, to replace 40W and 60W LED bulb prices fell 14.1% and 9.5%, mainly because of Philips, CREE and GE brands manufacturers have launched low-priced new products; 2) China area prices relatively stable, some products are still promotion years, replacing 40W and 60W LED the bulb prices were down 0.6% and 2.4%. Ping An Securities believes that the decline in the price of LED bulbs will be more obvious cost advantage, to further stimulate the release of LED lighting needs, and promote LED lighting penetration rate.

Relevant LED manufacturers cross licensing, market competition tends to be fierce

The recent major LED manufacturers to maintain the dominant position of the market, have to consolidate the patent advantages: 1) the day before Cree announced the signing of LED chip patent cross licensing agreement with Cree 2) crystal electric; to consolidate the market position, Sue donper and FeitElectric a total of 10 patent infringement. Following the production capacity, the patent will become the LED manufacturers to compete for the most critical weapons. We believe that the LED patent active layout of the mainland and Taiwan LED manufacturers are expected to stand out in a more intense market competition.