In today's LED display industry, mergers and acquisitions are nothing new. However, after Leyard announced the acquisition of PLANAR on August 17, he was still alarmed "Wow". In the announcement, Leyard stated that the total purchase price is expected to be about 156.8 million U.S. dollars, or about 1 billion yuan.
What is the concept of 1 billion yuan?
You know, the 2014 annual performance report released by Leyard shows that the company's operating income was only 1.190 billion yuan in the whole year of 2014.
Regarding such a large investment, Leyard said frankly that the transaction will help the company expand overseas markets, accelerate its globalization strategy, and accelerate the penetration of LED small-pitch TVs in overseas markets.
In addition to overseas market expansion, the subtext is overseas market expansion. In the LED display market, how attractive is the overseas market? According to the latest statistics of the customs in 2015, in the first five months alone, China’s exports of LED displays reached 260 million U.S. dollars, and the number of exports reached 440,000 units.
The vast market has stimulated the enthusiasm of enterprises in the industry to spare no effort, and Leyard is not alone. Taking Unilumin Technology as an example, in its latest performance report for the first half of 2015, it clearly pointed out that China’s LED display application industry has basically developed simultaneously with the international market, and has been fully internationalized, with direct and international traditional display With the strength of giants competing on the same platform, the global LED display industry has shifted to China, and frankly said that an important reason for the growth in the first half of the year is the acceleration of overseas business expansion; as a new company listed on the A-share GEM in 2014, Absen After the successful IPO, a series of overseas layouts were quickly carried out, and consolidable subsidiaries were established in Japan, Mexico, the UAE, Russia, Brazil and other places to deepen overseas business expansion.
The world is all for profit. The LED display companies’ persistence in overseas market expansion is not to satisfy their hunger, but the overseas business is indeed growing rapidly, and has become an important driving force for the overall growth of the company’s performance: Leyard is in The 2015 first quarter performance report pointed out that as of the announcement date, the company’s overseas orders had reached 100 million yuan, and the full-year overseas order target was locked at 550 million yuan; Unilumin Technology’s overseas orders in the first half of 2015 The market realized revenue of RMB 448.601 million, accounting for more than half of the overall application revenue (the overall revenue during the reporting period was RMB 624,119,900), an increase of 57.50% over the same period last year.
For LED display companies, overseas markets have broad growth prospects, which is in sharp contrast with the development status quo of "more monks and less meat" in the domestic market. In the domestic LED display market, due to the large number of companies in the industry and the serious homogeneity of products, price competition has become the main means of market competition, and corporate profit margins have been continuously compressed until the rise of small-pitch LED displays, allowing the LED display market There is hope for change, which is one of the reasons why small-pitch LEDs are valued by companies in the industry. However, as related companies continue to invest in small-pitch LEDs, homogenization has also begun in this market. Be reflected. In the international market, the atmosphere has eased a lot. Absen has made it clear that there are not many foreign manufacturers in the LED display field, and foreign manufacturers have also launched small-pitch products, but domestic manufacturers have entered this field earlier, developed faster, and have more abundant products. Has a clear competitive advantage.
In terms of overseas market expansion, domestic LED display companies already have Tianshi (strong overseas demand and the benefit of RMB depreciation) and Renhe (industry companies are actively investing), and in order to make up for the shortcomings of "location", they are actively localizing For development, overseas investment has become the first choice. However, even if the "time, place, people and harmony" are gathered, not every company can make a difference. First of all, the expansion of overseas markets requires continuous investment of large sums of capital, which will affect some of the enterprises with limited financial strength. Excluded, secondly, in overseas markets, if relevant companies do not want to repeat the mistakes of the domestic market price war, they must make breakthroughs in the provision of comprehensive solutions, thereby raising the company’s comprehensive service capabilities and localization adaptability. Requirements. Therefore, although overseas markets provide rare opportunities for domestic LED display companies, relevant companies have to do what they can, after all, it will not be a popular dish.
