Policy trap fattening LED Li Xuliang started the LED elimination tournament

Before and after the 2013 New Year, Li Xuliang, who founded Li Xuliang, had caused a lot of turmoil in the industry. This listed company has become the leader of LED street lights. At the end of November last year, the price was not lifted, causing the stock price to plummet. The decline was once second in the Shenzhen and Shanghai markets, second only to the protagonist of the “plasticizer event”; one month later, The company once again issued an announcement to issue no less than 400 million yuan of corporate bonds; in the second week of 2013, Qinshang Optoelectronics announced the cancellation of the 1.5 billion yuan order agreement.

Quick “fat”


Li Xuliang was born in technology. After graduating in 1988, he was assigned to a Sino-foreign joint venture and became an ordinary technician. In less than two years, he was promoted to an engineer. In 1993, he founded Qinshang Optoelectronics in Dongguan, which later became the world's manufacturing base, but the company produced hardware accessories in the early days.

In 1998, five years before the official launch of the semiconductor lighting industrialization plan at the national level, Li Xuliang began experimenting with the research and development of low-power and medium-power LEDs, and gradually applied LED light sources to Christmas gifts, such as Christmas trees, lamp painting, electric deer, decorative lights, etc. .

Prior to 2007, Qinshang Optoelectronics' LED products still dominated the international market relying on hardware channels. At the time, the domestic market was not interested in high-priced LEDs, so almost all companies are keeping an eye on overseas markets. Unexpectedly, the global financial crisis of 2008 brought shocks to the global economy, and the demand in the international market was weak. At this time, at a time when the growth of traditional manufacturing industry slowed down, the Chinese government began to introduce various policies to promote green energy-saving industries. Li Xuliang is ready to seize this opportunity, and the high-power LED lighting products that were mass-produced in the previous year will be fully introduced to the domestic market.

The years before and after 2008 were the most busy times for Li Xuliang. He found Tsinghua University, Tongji University and other university research institutions to seek joint research and development, and at the same time began a home and dealer negotiations. Today, he still remembers the dilemma of the time. "I want my grandfather to tell my grandmother that people are not willing to help us sell LED lights."

Behind the rapid development of the LED industry is the undercurrent of capital and the government's push. Li Xuliang led Qinshang Optoelectronics in 2008 to try to rush to the market, but eventually stranded. But this does not affect the primary market. Xiao Guowei, president of Jingke Electronics, an upstream company that produces LED chips, told reporters that “in those two years, investment institutions often came to the door to talk about investment.” In 2010, he finally accepted the tripod led by Wang Gongquan. Hui investment funds. At that time, LED and photovoltaic were called the two most popular industries.

At the same time, the government is also sparing no effort to promote the development of the LED industry. Especially in Guangdong, the “Ten Cities and Ten Thousand Cities” program was launched in 2009. For a time, thousands of LED companies emerged in this manufacturing province. In the same year, Jingke Electronics received an invitation from the Guangzhou Municipal Government to open a production base, which increased from 3,000 square meters to 35,000 square meters.

Li Xuliang is in it, but he has a clear understanding. He said, "No country will be like China, and there are thousands of enterprises in an industry."

Overcapacity caused by rapid “fertilization” will inevitably lay the groundwork for adverse reactions in the industry.

Policy city trap
At the end of 2011, Li Xuliang led Qinshang Optoelectronics to once again hit the capital market and successfully landed in the small and medium-sized board. Today he admits that "this model is tailor-made for the market."

The model in his mouth is the contract energy management model (EMC), an energy-saving investment method that uses the reduced energy costs to pay for the full cost of energy-saving projects. This is also the mode adopted by most LED companies.

This is a project that costs a lot of money. Li Xuliang said that the recent lifting of the ban of hundreds of millions of yuan plus 400 million yuan of corporate bonds, if it goes well, it will run out in one year. This is only a company. Obviously, the government's finances can't quickly pay such a huge amount of construction money in a short period of time. The company can only advance the corresponding costs, which will cause excessive capital pressure. The promotion of EMC slightly reduces the risk of payment, generally in a five-year cycle, with a 60% savings on electricity bills. In recent years, this model has also been copied to the commercial lighting field.

There is no doubt that such a market composition and development model, without strong financing and bargaining power, companies will be struggling. It is not difficult to understand why Li Xuliang has taken turns to launch a charge to the capital market.

The bigger dilemma lies in the fact that the government has strongly promoted the expansion of enterprises, and the orders given by them have been stretched. This is exactly the same as when the photovoltaic industry was launched, so there is a gradual emergence of more and more porridge. “Demand continues to gather at the brand, and SMEs cannot grab orders and cannot support normal operations.” Li Xuliang said that this is the most direct result.

The market is also changing with the help of the government. In the chaos of the ups and downs, the decline in the cost and price of products has also been reversed. Xiong Yingxiang calculated an account. In 2006, when Destar was in mass production, the cost per watt of a lamp was 20, and now it is only about 12, and the ex-factory price of a 150-watt lamp is 5,000 yuan six years ago. Just about 2,200 blocks. For downstream companies, this is undoubtedly worse. The price of the upstream chip jumped in 2011, and the low-end chip dropped by 60%.

Expansion collapse

"In 2013, the elimination of the LED industry will accelerate." Li Xuliang believes that a large number of enterprises will fall in the industry, but he firmly denied that LED will repeat the mistakes of the photovoltaic industry, "LED and photovoltaic are different."

Within the company, Li Xuliang often mentioned Apple's process design, which is one of its focuses on comparing photovoltaics and LEDs. He believes that photovoltaic solar products "can generate electricity, no need to be beautiful", but LED applications can increase the added value through the "technology + art" approach. In addition to the enterprise-oriented market for LED products, the general consumer market is a vast blue ocean, entering thousands of households and gradually escaping from the government's single demand market, but PV will remain attached to government procurement for a long time to come.

In addition to his experience, his enthusiasm is largely due to an ambitious plan that he is currently implementing—the factory “incubation” program. In 2012, when some enterprises were difficult to survive, he saw the opportunity and launched the game of “big fish to eat small fish”. However, this factory "incubation" plan is not a general acquisition or shareholding, but through strategic cooperation, not directly investing funds, only looking for potential enterprises in the country, and then providing a complete set of solutions for technology, accessories, standards, etc. .

He is negotiating with more than 200 domestic companies and has reached an agreement with 20 companies in 2012. Li Xuliang's ultimate goal is to be the “MediaTek” in the LED field – from a pure LED application product manufacturer to a complete solution provider to create a “turnkey” project.

Interestingly, behind such a choice, the shadow of local government reappears. Based on the GOP considerations, the support for the energy-saving and emission-reduction industries is biased towards local enterprises, thus forming certain geographical barriers. The factory "incubation" plan skillfully solves this problem. Cooperative companies do not even use the brand of Qinshang Optoelectronics, but create their own independent brands.

Li Xuliang said that he is a businessman, and every penny is spent on the blade. Will not go to the big money to expand the factory, nor will it take out real money to buy the same industry. I just want to improve the market bargaining power by improving the actual market share of Qinshang Optoelectronics in the lightest way.

“In 2013, it was a challenge for some SMEs, but it meant opportunities for brand companies.” In the turmoil in the LED industry, Li Xuliang was domineering.

(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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