UBS Gives Outlook for Everlight and Epistar 2014 Market Performance

The LED market for 2014 will see continued growth for the general lighting market and supply shortage of LED chips due to increasing demands from the LED lighting market, according to a recent report from UBS. In the report, the financial service company provides their outlook for Everlight and Epistar 2014 operation performance.


General lighting is anticipated to stimulate growth for Everlight in 2014. The growth of the LED lighting market over the next few years acts as support for the company’s operation performance. UBS ratings for Everlight’s have turned from sell-out to neutral.


Everlight’s operation revenue in 2014 is estimated to grow 16 percent from 2013, with help from injections from German subsidiary WOFI, growth of general lighting market, and government street light projects. For development of the lighting industry over the next few years, Everlight plans to increase their brand name in Taiwan as well as strategize Chinese market channels. UBS predicts that the company’s lighting industry revenue will increase 75 percent YoY, with operation revenue increasing to 25 percent.


In the long run, UBS estimates that Everlight 2013-2017 compound annual growth for operation revenue will reach 11 percent. However, the establishment of a better known brand has resulted in higher marketing expenses, and high business cost and expense for WOFI. Hence, Everlight’s estimated profit compound annual growth rate is only 6 percent.


Increasing demands from the LED lighting market is causing a shortage in supply for LED chips in 2014. Balance in product price is hoped to stabilize, which is conducive towards Taiwan LED chip manufacturer Epistar’s 2014 operation revenue and profit growth.


In regard to high luminosity LEDs, 2011 and 2012 supply volume surpassed demand 30 percent and 31 percent respectively. It is estimated to drop to 15 percent in 2013, and slide down about 4 percent in the first half of 2014which can ease LED die’s price fall . Prices in 2011 and 2012 plunged 40 to 50 percent and 30 to 50 percent respectively. The price fall is estimated to shrink to 15 to 20 percent in 2013 and anticipated to reach 10-15 percent in 2014.


UBS believes that Epistar will be a benefactor from expanding business opportunity in the global LED market, mainly due to the company having the highest luminosity rating in the Asian LED chip market, patent guarantee, mass production capacity for red LED, and main supply chain for HV LED.


Epistar has established several joint ventures in the Chinese market. The joint ventures include the establishment of Epistar Lighting Corp (Xiamen) with China Electronics Corp., Epistar Photoelectricity (Changzhou) with LiteOn, as well as United LED Corp. (Shandong) with UMC.
 

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