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From Wood to forest, Linsen status quo and future trend analysis

Dec 14, 2017

From "Wood" to "forest" to "Sen"--Linsen by the initial few people small factory, developed into the world's top ten China led packaging manufacturers, become a global-class LED enterprises. Today, Linsen is best known for its "Low-cost strategy" and its "growth strategy", which is the largest and most powerful of mergers and acquisitions, such as the "Snake-Swallow" takeover giant ledwance. So, what is the current status of Wood Linsen? How much space is there in the future? What is the synergy effect after the merger and acquisition of Ledvance? From Linsen's recent record of investor-related activities and the organization's investigation of the one or two. 

Industry situation and Company position 

LED package Leading edge enhancement, ledwance integration momentum Good 

Leading enterprises from the global led packaging industry see, the chemical revenue of Japan and Asia more than 2 billion U.S. dollars, osram revenue of 2 billion euros, Samsung led department revenue of 1.4 billion U.S. dollars, after the Seoul Semiconductor, Cree, lumileds, billion light and so on around 1 billion U.S. dollars. Linsen headquarters this year around 1 billion U.S. dollars, has become the world leader in the field of LED packaging team. 

Lighting market overall space of about 160 billion U.S. dollars, ranked first Philips, second Osram, the third acuity brands and Panasonic, the ledvance, sixth GE Lighting, these enterprises plus total market share relative to the overall market size is still relatively small, Highlight the LED lighting market still has a very broad market space. According to the 2015 Osram Report data show that the LED penetration rate of more than 20% Chinese regions, Europe and the United States only single-digit. 

Linsen has the integration ability from the LED package to the terminal downstream lamp brand, the competitive advantage is obvious. From the regional market sales, the United States accounted for about 25% of the world market, China about $number, Europe about 20%, Japan 8%. Linsen through Ledvance access to important sea ports, the use of Osram brand in Europe, North America using Nian brand. Two brands are hundred years of well-known brands, in the customer enjoys high visibility, can give full play to the Linsen efficient manufacturing capacity, output company high price products. In particular, next year Europe will eliminate halogen tungsten lamps, 2020 onwards the United States will eliminate halogen tungsten lamp, while the United States from the second half of this year began to popular filament lamp, the company can take the opportunity to quickly enter the overseas market. 

On the other hand, in the world with lighting sales channels and brand awareness of enterprises, currently only Philips and Ledvance two, so the company has a very good position of superiority. The company will continue to strengthen the packaging strength, integration of midstream and downstream economies of scale, to create coverage of global marketing channels, extend more product lines. 

The 2018 Linsen +ledvance is expected to be $353.8 billion. Linsen into drove power from the troika, "components and semiconductor materials + world-Class foundry Services + global brand Business", the ultimate formation of LED industry-wide chain carrier-class enterprises, has the opportunity to become more than 100 billion yuan in annual revenue companies 

The progress of company filament lamp 

filament lamp to grow the strongest finished product 

The company's early layout Shaoxing new and rapid occupation of the filament lamp market, is expected to account for the overall market 30% share, which ledvance of the filament lamp products 70% from the procurement and purchase, 30% from the external procurement. In addition to Ledvance brand, but also to other European supermarket brand OEM, the current OEM +ledvance in the European filament lamp market share of about 40%. At present, the company's filament lamp production capacity of 10 million/month, next year will be achieved 20 million/month, 30 million goals/month. 

The distribution of industrial chain 

The company upstream chip layout situation 

The company upstream shares the development of crystal, and the development of the acquisition of the Crystal, Capri in the LED Chip has an international patent, so Linsen export products can solve the patent problem, in the Linsen system of customers can be directly exported to overseas. So in recent years the development of crystal also achieved double growth, while the Linson business from 2015 revenue 1 billion to last year to achieve 1.7 billion, this year is expected to exceed 3 billion yuan, the same realization of doubling growth. 

In addition, the company invested in the Australian Shunchang, the Australian management model is very advantageous in chip performance, brightness and cost-effective is the industry's higher, the company therefore get better supply protection. The basic 90% is to Linsen do foundry, can save more sales and other costs. In addition, has been strategic cooperation for more than 10 years of crystal photoelectric, and Osram signed a strategic cooperation agreement, in many ways to ensure the company's overall chip supply. 

The relationship between Opto-electronics and optoelectronics at present 

Three photoelectric in the industry is upstream, Linsen mainly in the middle and lower reaches, the main business is also different, will be a kind of industrial cooperation relations, Linsen and chip manufacturers have maintained good relations of cooperation. 

Company main body Package business situation 

From the lamp bead business to see Linsen lamp bead market share has been higher, to 2121 light bead For example, monthly shipments of more than 10,000 KK, accounting for 2121 of the total market volume of 70%.

 Product structure and capacity distribution of the company

 Linsen The current product structure is mainly divided into two main categories from the manufacturing side--the parts and components are packaged and PCB-oriented. 

First: Home appliances and decorative business plate, this plate Christmas light market share of the relatively high, accounting for 70% of the world, in addition there are home appliances led, plus a total of about 1 billion yuan per year, sustained stable growth, and higher margin. 

Second: The display business sector, the total growth last year, but the price fell, so the output value of basic small growth, revenue of about more than 2 billion. 

Third: The general lighting business sector, the growth momentum is very rapid, last year 161.7 billion, this year is expected to have more than 3 billion opportunities. 

Four: Lighting products, lighting products faster growth, the fastest growth of the filament lamp this year shipments are estimated to be about 100 million, plus bulb lamp, is expected to reach about 1 billion revenue. 

Five: The other classification of the circuit board revenue less than 500 million, factory construction and investment, environmental approval process has been basically completed, is about to usher in high-speed growth. 

Overall, the Full-year revenue is expected to be in line with expectations, estimated to be slightly exceeded. Profitability is expected to be better than at the start of the year. Prospects for future business growth hope to exceed $number growth, next year the expansion of products mainly in lighting and mini Led. 

Ledvance Current Business Development 

Ledvance currently has 50% in traditional lighting, since last October, the official do LED lighting, the first year has done nearly 200 million euros, gross margin 40%, the future development of a comprehensive intelligent lighting products. In brand recognition, Osram's brand identification degree 97%, Nian brand identification 86%, in Business-to-business brand identification both reached 100%. Landevince total revenue of about 1.9 billion euros, of which about 70% Wholesale, 30% retail. 

The situation of the future ledvance closing plant 

Guan Factory is in the Osram era to do a good job of the shutdown plan, Ledvance has already made a certain communication with the trade union. Basically in accordance with the early announcement plan to implement the factory progress, the company nearly 1 months to lay off some employees, mainly by the German company's supervisory board supervision and management planning. 

Ledvance Integration Required funding situation 

Mainly by the Ledvance own cash flow to solve, is expected to next year 3-4 quarters will have the reorganization capital expenditure, is currently discussing the shutdown situation. Germans are more rigorous and methodical. 

Ledvance Related Financial indicators 

Ledvance management costs accounted for about 20% of sales revenue, lower than Philips, although ledvance led revenue growth is faster, but the traditional business will have slipped, Linsen to ledvance output cost-effective lamps and other products, Therefore, the company's target ledvance net profit margin will be better than the peer. 

From the management, the company in the future through the Ledvance Board of Supervisors to help recruit new management staff, maintain a certain independent operation, but will gradually adjust to the management and transformation. 

Nearly two months led revenue is expected to increase significantly, the average gross margin continues to rise, led business in the next fiscal year is expected to exceed 60% of the revenue ratio (Philips at this level EBITA rate of about 8.5%), the next 2-3 years led to more than 90%, while the target to achieve the Philips net interest rate level ( The current Philips lighting sector is expected to be about $number net interest after taxes. Ledvance estimated net profit next year could be roughly in line with expectations, but only about 1.5% of net interest rates are relatively conservative.

 The incentive of corporate executive stock 

The current management is very stable, the future with the introduction of new talent at home and abroad, equity incentive will be in the future consideration of planning. 


Linsen as a package leader, LED industry chain layout has been from "wood" into "forest", mergers and acquisitions ledvance play synergy effect, the advantage is obvious, the future to build a global led integrated aircraft carrier. As the company's packaging business advantages continue to strengthen, the company's products continue to high-end, brand and internationalization of development, while the ledwance integration effect is better than expected, is expected to 2018 Ledvance and net profit of about 1.5 billion. 

And we believe that the future of Linsen is much more than that, and the pattern is much more than that.