1. General overview
In 2020, China's lighting industry exports reached 52.6 billion U.S. dollars, or 364 billion yuan, a year-on-year increase of 16.1%. Domestic sales were approximately RMB 238.5 billion, a year-on-year decrease of 16.8%. The industry-wide revenue was 602.5 billion yuan. On the whole, export sales were better than expected, while domestic sales were lower than expected. The sharp increase in foreign sales offset the decline in domestic sales, making the industry-wide revenue basically the same as in 2019 (600 billion yuan).
Judging from the changes in industry revenue from 2010 to 2020, the entire industry is still in a medium-to-high-speed growth period during the "Twelfth Five-Year Plan" period, and the growth rate tends to be flat during the "Thirteenth Five-Year Plan" period, entering a period of stable development In the future, more attention will be paid to high-quality development.
In 2020, in the face of the severe impact of the new crown pneumonia epidemic on the global market and the extremely complex international situation, with the country’s introduction of a series of extraordinary policies and measures to stabilize foreign trade to promote innovation and the joint efforts of the majority of lighting export companies to move forward, 2020 The export of China's lighting industry grew against the trend in 2009, with a total export value of US$52.6 billion, a year-on-year increase of 15.7%. Not only did it far exceed expectations, it also set a new record. The first quarter dropped sharply and reached the bottom; the offensive and defensive transformation in the second quarter was ready to go; the third and fourth quarters rebounded strongly, setting new highs repeatedly, and finally reached a "V"-shaped reversal. As the only major economy in the world that has comprehensively and systematically contained the epidemic, China has highlighted its position as a global manufacturing center and supply chain hub for the lighting industry.
The reason for the growth is that the rigid demand for lighting products has demonstrated its resilience; epidemic prevention and housing economy products have become a boost; the margin of external demand has gradually improved; and the "replacement transfer effect" is significant.
In terms of export products, the replacement of light sources is progressing steadily; the price of LED light sources continues to decline; the shipments of LED filament lamps are increasing; the export of scientific research, medical, ultraviolet and other anti-epidemic related products has soared; the rapid development of plant lighting; consumer products are better than engineering products, etc. Several characteristics.
In terms of export destination markets, the Asia-Pacific markets dominated by emerging economies performed significantly better than the European and American markets dominated by developed economies. In the Asia-Pacific market, East Asia, West Asia, Southeast Asia, and Oceania markets have performed well; in the European and American markets, the recovery degree of the North American market is better than that of the European and Latin American markets.
The practical difficulties faced by export companies are declining product prices, sharp fluctuations in exchange rates, rising prices of raw materials and components, shortages of stocks, bursting of tanks in the shipping industry, and power cuts in some places.
3. Domestic sales
From the perspective of supply and demand, the recovery of the supply side of the relatively centralized decision-making organization is better than the demand side of the decentralized decision-making response. From the demand side, under the background of the country's full investment in the "two new and one heavy" in 2020, the B-end market driven by investment performs much better than the C-end market driven by consumption. Roads/tunnels, rail transit, education and other fields performed more prominently, while the consumer C-end, which is dominated by home lighting, was dragged down by the structural decline in social employment and income caused by the epidemic, and it took a longer time to recuperate. Build confidence. According to statistics from the Bureau of Statistics, in 2020, my country's retail sales of consumer goods other than automobiles will be approximately 35 trillion yuan, a year-on-year decrease of 4.1%.
Opportunities and challenges faced by domestic sales in recent years:
01. Channel changes
The first is the significant diversion effect of new channels, squeezing the space of traditional channels. The traditional retail and wholesale channels or engineering channels are currently affected by the diversion of the above new channel models to varying degrees. The commonality of these new channel models is that they affect the brand of lighting suppliers, product quality, and service capabilities. higher requirement. In the past, it was a situation where the Eight Immortals crossed the sea and the fish and the dragon were mixed. However, as the industry is gradually entering the pattern of stock competition, it will develop in the direction of survival of the fittest and intensification.
02, product change
Market demand tends to be segmented and specialized, and market segments are also developing towards sub-segmentation. Take commercial lighting as an example. As a branch of general lighting, in recent years, with the development of high-end, personalization and customization of customer needs in different commercial spaces, the market has also developed towards a trend of subdivision, including hotels and shops. , Offices, supermarkets, collections, catering, station rooms, classrooms and many other subdivided areas, and even further subdivided areas such as cold chain, jewelry, and baking. In this context, products and services must also be transformed and upgraded in line with market demand.
The other is the changes in consumption habits. For example, the current trend of unowned lighting in the industry is essentially caused by changes in consumption habits, and it is essentially just an evolution of lighting techniques. Whether to adopt it depends entirely on the fundamentals of light in the application place. demand.
In short, market demand is the decisive force for product change.
03. Supply chain reform
The businesses of large-scale enterprises continue to expand, penetrate into various market segments, and their product lines and distribution systems are becoming larger and more comprehensive. Large-scale enterprises, especially self-owned brand channel enterprises that have outstanding strength in some market sectors, have been under pressure from the competitive environment and performance in the development process in recent years, and their product lines have continued to expand, tending to be broad and complete, consolidating their strong market position At the same time, almost all of them are involved in market segments, which undoubtedly squeezes the living space of small and medium enterprises.
However, due to the diversified nature of LED lighting, a single company cannot be comprehensive and proficient in everything. Therefore, in the future, competition among large-scale enterprises will evolve to competition among high-quality supply chain systems based on innovative research and development. Under this competitive landscape, some small and medium-sized enterprises with comparative advantages in innovation and manufacturing will become an important part of the ecological chain of large-scale enterprises where channel brands are known, that is, the existence and development of a social division of labor.
04. Business model transformation
The emergence of new business models under the promotion of the epidemic has accelerated, reflecting the drastic changes in the relationship between the key business elements "people and goods". Under the traditional model, "people" actively search for "goods" by going to online or offline "locations"; the epidemic has played a role as a catalyst, greatly accelerating the process of contactless economy and home economy. Now, new retail It is the “goods” who actively seek out “people” through “scenarios” such as live broadcasts, short videos, and embedded advertisements.
It is foreseeable that the imprints of the epidemic will not disappear after the epidemic is over. The business model will be reshaped in the future. Multi-scenario shopping will make consumer decision-making more fragmented and personalized. Related manufacturers need to expand the sales margin in the online virtual space and break the ceiling of sales in the offline physical space.
4. Hot market segments
01. Landscape lighting
02, road lighting
03, off-grid lighting
Off-grid lighting (Off-grid lighting), that is, lighting products that can run on self-supplied power that leave the mains grid. Portable lighting, mobile lighting, rechargeable lighting, emergency lighting, solar lighting, flashlights, etc. fall into this category. After LED gradually enters general lighting applications, due to the small size and low-voltage drive characteristics of LED point light sources, coupled with the continuous improvement of its light efficiency, low power can meet most lighting needs, reflecting high efficiency, energy saving, simple portability and strong applicability It has its unique advantages in occasions where it is inconvenient to connect to the mains or need temporary emergency lighting, and it is currently developing towards diversified functions and extensive applications.
According to reports from relevant international organizations such as the World Bank, there are still up to 840 million people in the world without electricity supply, mainly in underdeveloped areas such as India and Africa. Such populations without electricity or without stable electricity supply are called "off-grid." Population, the lighting needs of a large number of "off-grid" populations have become considerable. In addition, temporary emergency scenarios such as rescue and disaster relief, fire emergency, field work, outdoor activities, etc. all have a rigid demand for off-grid lighting. In 2020, my country’s global exports of flashlights and their parts and self-powered portable electric lamps and their parts totaled US$2.35 billion, a year-on-year increase of 2%. In recent years, it has maintained a relatively stable growth.
At present, domestic manufacturers such as Kang Mingsheng, Kinglight, Ocean King, Jiawei, Jiuliang, Jinyuan, Langheng, Dongang, Shuangyu, etc. have made great achievements in the off-grid lighting segment. Product quality, homogeneous competition, and low-price competition are issues that need to be solved urgently in the development process.
04. Stage lighting
Stage lighting equipment is mainly used in theaters, cultural venues, concert venues, conference venues, etc. At the same time, with the development of the tourism market, there is an increasing demand for stage lighting equipment such as entertainment theme parks and cultural tourism light shows. In addition, the booming landscape lighting market in recent years has also prompted many stage lighting manufacturers to intervene in the R&D, manufacturing and sales of landscape lighting-related products. The manufacturers of stage lighting equipment in my country are mainly located in the Pearl River Delta, especially Guangzhou and Shenzhen. With the continuous development of the domestic social economy, the continuous deepening of the urbanization process and the general public's demand for quality cultural life is still booming, the domestic market potential remains unchanged.
In the export market, European and American international brands have relatively mature brand building and market channels. Therefore, similar to the entire lighting industry, domestic export manufacturers are still mainly based on OEM and ODM models. Some of them, such as Yajiang, Zhujiang, and Thang Long, are independent Good brand export operations. In 2019, the total export of stage lighting products exceeded 500 million U.S. dollars; in 2020, affected by the overseas epidemic, the market demand for performing arts equipment has declined greatly, and the export of stage lights has dropped by 40%-50%. In the future, with the promotion and coverage of vaccination in various countries, the epidemic will be effectively alleviated, and it is believed that the delayed demand will pick up.
05. Educational lighting
The hottest field in the lighting industry in 2020, the outdoor can be regarded as a multi-functional light pole, the non-visual is UV, and when it comes to indoors, education lighting will be my part.
There are currently 520,000 schools of various types in my country, among which there are 210,000 schools in the compulsory education stage, the number of classes reaches 3.75 million, the school building area exceeds 1.4 billion square meters, and there is a general lack of overall design and low illumination in primary and secondary school classrooms. , Severe stroboscopic, glare pollution, color distortion and many other problems, which have considerable potential for transformation. On the other hand, because it is related to protecting the eyesight of young people, the field of education lighting is not only a matter of the lighting industry, but also has attracted the attention of the whole society.
The "Implementation Plan for the Comprehensive Prevention and Control of Myopia in Children and Adolescents" issued by the eight ministries and commissions in 2019 is to implement the spirit of the important instructions of the General Secretary on the problem of myopia in students, and also to improve the relevant lighting products as important educational equipment in the visual environment. A strong heart needle. In the next 2020, national and local levels are successively introducing standards and regulations related to education lighting, which will play a positive role in guiding and regulating the development of the market. At the same time, a large number of lighting manufacturers who want to seize market opportunities and flood into this field need to note that educational lighting is only a subdivision of the indoor lighting domestic market. The market volume is limited. The current hot spots really need to be grasped, but overheating can easily lead to excess , The beginning of swarming may end up all over the place, the relevant manufacturers should still based on their own long-term, expect to return to rationality.
06. Plant lighting
Artificially intervened plant lighting stems from changes in agricultural models and has been widely used in the traditional lighting era. Under the raging epidemic in 2020, the field of plant lighting has developed rapidly against the trend and has become a bright spot in the lighting industry segment, which is reflected in the rapid growth of the export market, the continuous improvement of standards and specifications, the continuous improvement of enterprise investment, and the continuous expansion of application scenarios. Driven by multiple factors such as the legalization of marijuana commercialization in North America, the shortage of food and medicine supply caused by the global epidemic, and the increase in home isolation, the export of plant lighting products in 2020 will increase sharply. While many leading manufacturers have doubled their performance, there are also More new players poured in.
As a multi-disciplinary integrated system integration project, plant lighting needs to solve the problems of organic integration and development of plant photobiology, lighting technology, and light environment control at the same time. It has a high technical threshold. In the lighting industry, the idea of "emphasizing light and light plants" is widespread. In fact, cutting-edge systematic research on plants is the core element, and relevant manufacturers must not only solve the spectral distribution, photosynthetic intensity, light cycle, uniform illuminance, etc. required for plant growth. The first problem is to solve the problem of the product itself. For example, in many high-power applications, traditional high-pressure sodium lamps and metal halide lamps are still the main products due to efficiency, cost and reliability issues. In addition, mainly due to cost factors, LED plant lighting is currently used in high value-added crops.
Generally speaking, domestic plant lighting, especially the field of LED plant lighting, is still in the initial stage of development. On the one hand, it has considerable development potential. On the other hand, the existing market in the industry has low acceptance, lack of core technology in the upper and middle reaches, and insufficient patent layout. , High cost input, low output efficiency of enterprises, lack of comprehensive talents, imperfect related standard system and other issues have room for learning and progress from leading countries such as the United States, the Netherlands, and Japan.
07. UV disinfection
First of all, it must be clear that ultraviolet germicidal and disinfection lamps are not a new thing, and have been widely used in the traditional lighting era. In fact, traditional low-pressure gas discharge lamps are still playing the main role in the battlefield of epidemic prevention and anti-epidemic. In 2020, my country will export 75 million ultraviolet lamps to the world, totaling 480 million U.S. dollars, a year-on-year increase of 460%. The front line can be described as a great contribution.
In addition, it is important to note that the "Minamata Convention on Mercury" aims to eliminate fluorescent lamps for general lighting and all high-pressure mercury lamps that contain excessive mercury, while ultraviolet lamps for special lighting purposes are not restricted.
Driven by the epidemic, UVC-LED is also in full swing. UVC-LED devices/modules with low production capacity were once hard to find, which has attracted manufacturers at all ends of the industry chain to increase investment. As an environmentally friendly physical means of sterilization, deep ultraviolet LED has also been confirmed by research institutions to effectively kill the new coronavirus. In addition, it also has a wide range of application prospects in many situations where sterilization and disinfection is required, and has a huge market potential. .
But at present, it is mainly trapped by the problems of low photoelectric conversion efficiency and high cost. It is still in the initial stage of development. If it is to be fully promoted in the future, it will be in light efficiency, life, cost, standards, testing, patents, and reliability. Many aspects such as performance and application security still need to be improved.
The above market segments did not discuss healthy lighting and intelligent lighting. The author believes that the two are no longer market segments and are the development direction of the entire industry. The concept of universality and the basic requirements for the future are that lighting products need to pursue health and intelligence. Lighting products such as light sources or lamps, light poles or accessories should exist as terminals in smart homes extending to smart buildings and even smart cities and serve human activities, playing an important carrier role, and ultimately forming an adaptive, healthy and comfortable Intelligent system of light environment.
Five, all ends of the industry chain
01. Epitaxial chips: the imbalance between supply and demand continues, and the short-term rebound is cautious
The market environment continues to be sluggish, and the sudden epidemic has undoubtedly worsened the situation, further suppressing the already low downstream demand. In addition, the Sino-US trade friction continues, the production capacity of new players such as Zhaochi has been released, government subsidies have been significantly reduced, and the combined effect of multiple factors such as the inventory backlog of major manufacturers has caused downward pressure on chip prices, high inventories, and continued low capacity utilization. The cycle continues in 2020. The situation of stock competition will continue to promote the increase in the degree of industrial convergence. The domestic upstream sector, which is already a combination of capital and production capacity and winning on scale, will increasingly show a highly intensive pattern.
Combining the short and medium-term economic situation and industry fundamentals, the imbalance between supply and demand of LED chips has not changed substantially. In my opinion, the upstream chip prices driven by the recent increase in raw material prices are cyclical bottoming and rebound, rather than a trend recovery.
02. Encapsulation: Two-way pressure squeezes the space, laying out a blue ocean to find a way out
Affected by the previous supply-demand relationship such as the expansion of upstream epitaxial chip production capacity and the weak demand for downstream lighting applications, midstream packaged devices are under two-way pressure, price downward pressure is greater, and shipment growth is weak. The homogeneity competition among major top manufacturers has become increasingly fierce, and more concentrated on manufacturing scale advantages and cost competitiveness. The arrival of the epidemic has further intensified the competitive environment.
In the context of the performance pressure brought by fierce competition in the general lighting field and the development of lighting applications in the direction of light quality, health, and intelligence, many packaging manufacturers have focused on light quality and automotive, agricultural, infrared, ultraviolet, and Niche areas such as Mini/Micro are trying to develop the blue ocean market through innovative research and development.
03. Various supporting facilities: Innovative R&D to reduce costs and increase efficiency, and intensify competition followed by applications
As a deep supply chain industry, lighting includes supply chain manufacturers such as driving power supplies, mechanical parts, optical parts, production and testing equipment, and raw material components. The recent round of price increases and shortages of raw materials and components have different impacts on companies in the industry chain.
Comparing the mutual penetration of downstream application vendors, there is a similar situation in supporting fields. For example, vendors that are mainly engaged in small and medium-power power supplies are currently expanding high-power products. Related companies are increasing R&D and innovation efforts to reduce costs and increase efficiency to respond to the competitive environment. Follow the high-quality development of downstream applications that are healthy and intelligent and focus on design.
04. Lighting project: dual impact of policy epidemic, complex transformation of cultural and tourism in the smart city
At the end of 2019, the Central Education Leading Group on the theme of "not forgetting the original heart and keeping in mind the mission" issued the "Notice on Renovating "Landscape Lighting Projects" and other "Achievement Projects" and "Face Projects". The core is to prevent excessive lighting. As with the political achievement/face project, the level of urban lighting should be adapted to the city’s own economic and social development and cultural characteristics, prompting the entire landscape lighting market to enter a new stage of rational construction. The impact of the domestic epidemic at the beginning of 2020 is mainly reflected in the stagnation of project construction and business development. It also has an adverse impact on project acceptance and payment collection, resulting in a sharp increase in the provision for bad debts made by relevant companies. In general, the policy of regulating the lighting market has a greater impact on the industry than the impact of the epidemic. The impact of the epidemic is temporary, but the impact of the documents is profound in the industry structure.
At the same time, it can also be seen that related companies in the field of lighting engineering have entered the transformation stage, some are transforming cultural tourism night tour projects, the other part is transitioning to the construction of smart cities, and there is a combination of both, the entire lighting project The sector has entered the new normal of development.
6. Capital market
2020 is also the 30th anniversary of China's capital market, and the entire capital market has also experienced an extraordinary year of innovation. Since the eighteenth session of the China Securities Regulatory Commission’s issuance review committee took office in 2019, both IPO review and issuance have been accelerated, and the number of meetings and the rate of meetings have increased significantly. At the same time, the implementation of the registration system has greatly accelerated the speed of A-share IPOs. In 2020, there will be 7 companies registered and listed in the lighting industry, which is only less than 12 at the peak of 2017. The total amount of funds raised exceeds 9 billion yuan, mostly used to expand production capacity, invest in research and development and supplement working capital; another 6 companies have passed the meeting , 9 companies are queuing; in addition, a lot of companies have completed the share reform, completed the guidance, and are preparing to go public.
In addition to A shares, the NEEQ has implemented a series of deepening reform policies in 2020, in particular, it has clarified the specific implementation path for the NEEQ companies to transfer to the market. For the majority of lighting companies, with this new path for IPO, some small and medium-sized enterprises with good performance, certain core competitiveness and standardized operations have good opportunities.
After 30 years of growth, the Chinese capital market has continued to mature on the path of improving the multi-level capital market system with Chinese characteristics. At this stage, the core is the reform of the comprehensive registration system combined with the perfect delisting system. In the future, equity investment in the capital market will return to its essence, and enterprises with core competitiveness that have advantages in technology research and development and innovation in value models will be more acceptable to the market. In view of this, the powerful companies in the lighting industry that have been or are about to enter the capital market should all seize opportunities and embrace change while focusing on their main businesses.
7. Dynamics of large international companies
In 2020, Signify acquired Eaton’s North American lighting manufacturer Cooper Lighting for a record amount of US$1.4 billion, and successively announced the closure of North America’s Salina, Kansas and Tupelo, Mississippi plants. At the end of the year, it successively increased its investment and expansion in China. First, its subsidiary Kay Lighting invested to build a new LED lighting production base in Ruichang, Jiangxi, and then announced that it will invest 13 million euros in Jiangsu Yizheng to build 3 UHP projection lamp production lines and 2 large High-power ultraviolet germicidal lamp production line and 5 metal halide lamp production lines. Its business has strengthened its layout in hot markets such as interconnectable lighting, ultraviolet disinfection, and plant lighting.
It can be seen that the Dutch giants still stick to the lighting industry and continue to strengthen their brand, market, manufacturing, R&D and other advantages; in addition, the layout will gradually withdraw manufacturing and supply chains from Europe and the United States, and focus on China.