Three LED Companies IPO to Face Temporary Decline in Stock Market and Segmentation in the Mid to Long Term

Around 50 companies are expected to be listed on the Chinese bourse by the end of January, according to a statement by the China Securities Regulatory Commission (CSRC) on November 30th in regards to further promoting the reform of the IPO system. Among these companies, three LED companies are in the electronics industry IPO. The LED industry will be affected by the reopening of the IPO, where prospects will remain bearish in the short term while differentiating in the mid and long term, according to industry insiders.

Among the 83 companies that had already received preliminary approval, nine are from the electronic industry, three  are LED companies. The three LED companies include Shenzhen Absen LED, MLS Lighting, and Kennede Electronics. Absen main operations are in LED display and LED lighting products. MLS Lighting mainly produces LED package and LED application products. Kennede mainly manufactures rechargeable backup lighting products and rechargeable fans.

The LED industry is anticipated to feel the effects of China’s reapprove of companies launching IPOs again. Many analysts believe that the stock market will temporarily decline but show differentiation in the mid and long-term. Package and LED application supply chains for example do not have high technology barriers, competition will therefore increase in intensity with vertically integrated companies emerging as winners. Top companies such as San’an Opto and Electech have production capacity and technology barriers and therefore will benefit in the LED industry.

Taiwanese large LED manufacturers had an average increase in revenue for October, mainly due to backlight market rebound and growth in lighting demand. Chinese chip manufacturers such as San’an Opto, maintained high utilization rates, according to related data.

Reopening of IPO will not have a large impact on the LED industry on a whole, said one industry insider. However, it will impact the LED panel market in second-tier cities. For companies hoping to offer  IPOs to become listed companies, the reopening is a good thing. Companies hope to speed up expansion, reduce costs and seize the LED market through IPO.

Until December 2nd at 11:24, among 54 A-share listed LED companies all experienced huge plunges, while Ledman and Everfine stocks slumped to the limited legal range. Orient Crystal Optics stocks however increased 2.82 percent.

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