In recent years, the development of China's LED industry has been rapid. With the support of national policies and the impetus of downstream application demands, a relatively complete LED industrial chain system has been formed. Last year, amidst continuous fluctuations in international macroeconomic conditions and severe domestic industrial investment situations, despite incessant discussions about overheated investments and overcapacity, these concerns failed to reduce the enthusiasm of capital markets for pursuing LEDs. Various segments of China’s LED industry maintained a certain growth rate. According to data from the National Semiconductor Lighting Project Research and Development and Industry Alliance, the total scale of China’s LED industry reached 156 billion yuan in 2011, representing a 30% increase compared to the previous year.
The LED application market is divided into several fields such as general lighting, landscape lighting, backlighting sources, LED displays, and automotive lighting. In 2011, the overall scale of China’s LED application areas reached 121 billion yuan, growing by 34.44%, making it the fastest-growing segment in the entire LED industrial chain. Among these, general lighting showed the most significant growth, with its overall share reaching 25%, becoming the largest application area in terms of market share.
Analyst Li Ling from ChinaVenture CV Analyst Group analyzed that the substitution of LED lighting products will first occur in commercial and industrial lighting sectors, followed by gradual popularization in home lighting after successful demonstrations.
The rapid development of the LED industry has also caught the attention of venture capital (VC) and private equity (PE) funds regarding related enterprises, making LED projects still a focal point for capital pursuit. According to incomplete statistics on advertising LED displays, since 2010, 14 LED-related companies have received VC/PE investments, accumulating nearly 10 billion yuan in financing, with investment directions spanning the entire industrial chain. Additionally, GSR Ventures established an LED industry fund worth 4 billion yuan in March 2009, focusing on investing in enterprises settled in the Nanchang GSR LED Industrial Park, promoting the development of Nanchang's LED industry.
In the capital market, in 2011, seven LED industry companies achieved IPOs in the A-share market, accumulating a total financing amount of 3.625 billion yuan, averaging 518 million yuan per company. From a market distribution perspective, five companies were listed on the Growth Enterprise Market (GEM), while the other two were listed on the Small and Medium Enterprises (SME) board. Looking at the distribution along the industrial chain, all seven listed companies focused on midstream packaging and downstream application segments.
In 2012, China’s LED industry will continue to experience a wave of IPOs, with proposed listed companies gradually extending from the main links of the industrial chain—such as epitaxy, chips, packaging, and applications—to auxiliary materials and equipment directions. The latest research report from ChinaVenture CV Analyst Group shows that 2012 will witness a major wave of LED IPOs. On February 1st, the China Securities Regulatory Commission (CSRC) disclosed a list of 515 companies awaiting IPO approval, among which at least nine relevant companies are queuing up for listing.
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