The hottest subsidy policy turns to the outsourcin

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The subsidy policy has shifted to the outsourcing production of large international manufacturers in the middle and lower reaches

after the LED industry has undergone a reshuffle, the competition has become more rational, and the profitability of manufacturers is gradually recovering. From all aspects, we believe that the concentration of the chip industry is already high, the industry pattern is obvious, and the market also has full understanding and expectations; The application sector benefits from the growth in demand for applications such as lighting and small spacing, and the channel capabilities of various manufacturers determine their profitability; However, the benefit process of the midstream packaging sector is relatively lagging behind, and there is still much room to improve the industry concentration. In addition, due to factors such as the shift of subsidy policies, packaging enterprises that are not generally recognized by the market at present are expected to usher in new development opportunities

for the chip price trend in the second half of the year, we believe that it is generally stable and the probability of continuing to rise is not high. The reason for this round of chip price increase is that the price was too low before, but now it is only a supplementary increase to return to a reasonable price, while the homogenization of chip products is serious, and there is little probability of further price increase in the future

industry concentration has increased, leading enterprises have benefited

mainland led upstream chip companies are basically moving towards oligopoly, and the market share of the top ten chip manufacturers reached 77% by the end of 2016. We believe that the stability of the chip industry pattern is the cornerstone of the stability of the entire LED industry. The concentration of the chip industry will eliminate small and medium-sized packaging manufacturers with weak bargaining power, and then improve the concentration of packaging links, which is conducive to the sustainable and healthy development of the entire industry

in 2014, the market share of the top ten manufacturers in China's LED packaging market totaled 45.6%. The industry reshuffle continued, and the industrial concentration gradually increased. The data shows that the number of packaging enterprises is expected to be only about 1000 by the end of 2016, and there will be only 500 by 2020. The revenue share of the three major manufacturers, Mu Linsen, Guoxing and Hongli, has increased from 6.4% in 2008 to 13.6% in 2016. The industry concentration has increased significantly, but the moderate increase of packaged set 2 and sports and leisure products is significantly slower than that of chips, and the industry reshuffle continues. After the increase of chip concentration, the ability of small and medium-sized packaging manufacturers to obtain chips is weakened, and there is no bargaining power at the same time, while the cost side is higher, and the product competitiveness continues to decline. Eventually, small and medium-sized packaging manufacturers will be phased out, and industry leaders will benefit from it

the subsidy policy has shifted, and the integration of the middle and lower reaches has accelerated.

the subsidy for upstream chips is gradually narrowing, which has restrained the disorderly expansion of LED chip production capacity from the source of the industrial chain, and is expected to transfer the subsidy to the middle and lower reaches, which is conducive to pulling the LED industrial chain from the demand side. At present, only leading enterprises are subsidized, and some small and medium-sized enterprises are less likely to receive subsidies

Mu Linsen had almost no government subsidies in 2009 and 2010, accounting for 0%, while the subsidies of San'an in the same period accounted for 31% and 59%; In 2011, Mu Linsen received a small amount of subsidies, accounting for only 6.2% of the net profit. In the same period, the proportion of San'an subsidies reached 75.9%, which is the highest in the history of fatigue testing machines, but the opposite is true; After that, Mu Linsen received relatively stable subsidies in, about 30 million, with fluctuating proportions. Screw the six square screws larger, and the subsidy proportion of San'an optoelectronics gradually decreased. The transfer of government subsidies to the middle and lower reaches has fundamentally improved the overall LED industry supply and demand pattern, and the LED industry chain is expected to benefit as a whole and further warm up

large international manufacturers subcontract production, and Chinese manufacturers welcome opportunities

due to the fierce competition in the LED industry, manufacturers in Chinese Mainland have obvious cost advantages. Some large international manufacturers gradually subcontract production, and manufacturers in Chinese Mainland usher in new opportunities, In the future, there will be electric motors, internal combustion engines or other high-speed power through the gear with less teeth on the input shaft of the reducer to mesh with the big gear on the output shaft to achieve the purpose of deceleration, hoping to get more say. The competitiveness of overseas packaging giants in general lighting devices is gradually weakening. Large international manufacturers, including Nichia, OSRAM, Lumileds and Samsung, continue to seek differentiated markets, avoid the disadvantage of production capacity, and transfer some orders to domestic packaging plants for OEM

with the stability of chip prices, small and medium-sized packaging manufacturers with weak bargaining power will be eliminated, so as to improve the concentration of packaging links; The transfer of government subsidies to the middle and lower reaches has fundamentally improved the supply and demand pattern of the overall LED industry; Manufacturers in Chinese Mainland have obvious cost advantages, and undertaking commissioned orders from large overseas manufacturers is conducive to increasing the voice of the industry. We suggest investors to actively pay attention to the investment opportunities in the LED industry, and the industry logic of "the big is Evergrande" will benefit relevant enterprises

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