Which Company Has the Strongest Investor in the Chinese LED Industry?

In a generation where people compare looks and family backgrounds, the business sector is also engaged in similar competitions. The LED industry is a field that is not short of manufacturers showing off their renowned backers. LEDinside lists below classical examples in the field.

China’s National Semiconductor Industry Investment Fundis San’an Opto’s “Second Largest Shareholder”

Company: San’an Opto

Investor: China’s National Semiconductor Industry Investment Fund

Backer’s strength: ★★★★★

San’an Opto actions in 2015 proved it is the “big brother” in China’s LED industry. For example, the company raised RMB 3.9 billion to expand production capacity, and its subsidy Luminus Devices acquired 125 LED related patents from Sharp in April this year. The company is also entering the semiconductor industry through a joint investment with Hua Capital Management and China Development Bank. More recently, San’an Opto signed a 10-year partnership agreement with Shanghai Institute of Aerospace and Electronics to develop Li-Fi related applications in July 2015.

Among these numerous developments, the most impressive development has been its new “second largest shareholder.” San’an Opto announced its second largest shareholder Fujian San’an Opto signed a shares transfer agreement with China’s National Semiconductor Industry Investment Fund on June 16, 2015. Under the agreement, San’an group will be transferring 217 million shares, or its 9.07% stake in the company to the investment fund. The transaction is expected to total RMB 4.84 billion, hence the national fund will officially become San’an Opto’s second largest shareholder.

The fund is comprised of China’s Ministry of Finance, China Development Bank, China Tobacco and other government owned or affiliated organizations. Backing from the fund represents government backing. San’an Opto is already a leading manufacturer in the industry, with the addition of government endorsements, San’an Opto surely has a bright future ahead.

Nationstar clings on to Guangdong Rising Assets Management

Company: Nationstar

Investor: Guangdong Rising Assets Management

Backer’s strength: ★★★★★

Many industry insiders will probably still remember the huge changes in Nationstar’s management that followed Guangdong Rising Assets Management (GRAM) investment in the LED company in late 2014. However, after every storm there comes a rainbow. Despite the small setbacks, GRAM is a wealthy investor that many manufacturers can only hope for.

The state-owned company became Nationstar’s largest shareholder in July 2015. GRAM and its wholly owned subsidiary China’s Electronic Cooperation (CEC) combined hold 95.91 million Nationstar shares, which approximately is a 20.16% stake.

GRAM is a subsidiary of Guangdong Province's State-owned Assets Supervision and Administration Commission. Subsidiaries of GRAM listed on China’s A Shares market include Zhongjin Lingnan Nonfemet Company, Rising Nonferrous Metals Share, Fenghua Advanced Technology and Nationstar. With GRAM’s backing, Nationstar’s businesses began to pick up and expand. The company is no longer just concentrating on its LED component business, but plans to expand its chip business. In June, the company announced it will acquire Zhongda Group’s stake in Invenlux Technology for RMB 16.50 million. The company’s stake in Invenlux Technology amounted to 25% of its registered assets, and at the same time the company will increase its financing in Invenlux Technology to RMB 60 million. Once the transaction is completed, the company’s financing in Invenlux Technology will amount to 62.5%.

BYD Lighting leans on parent company

Company: BYD Lighting

Investor: BYD Group

Backer’s strength: ★★★★

Some manufacturers have to seek “godfathers” or angel investors for financial backing, but others naturally have a wealthy parent company. BYD Lighting is an enterprise “born with a silver spoon in its mouth.” The BYD group founded its optoelectronics business in 2003, and kicked off its official lighting brand in 2010. The company established its eco-friendly business in 2013. Prior to launching its LED products in 2014, the company released its lighting and smart lighting solutions. BYD Lighting has developed smoothly and its revenue exceeded RMB 400 million in 2014.

Based on the group’s advantage, BYD Lighting is supported by the parent company’s large demands, especially interior automotive lighting component applications. The company has also firmly established its sales channels and brand recognition in China, where BYD and company chairman Chuanfu Wang are household names. The industry hopes BYD Lighting can bring more surprises to the market.

Lumileds sold to Go Scale Capital

Company: Lumileds

Investor: Go Scale Capital

Backer’s strength: ★★★★

The acquisition of Lumileds headed by Go Scale Capital is still a much discussed event in the industry. In late March, Philips announced it signed an agreement with an investment consortium headed by Go scale Capital, Asia Pacific Resource Development and Nanchang Industrial Group to transfer 80.1% shares in Lumileds for US $3.3 billion. Philips stake in the company after the transaction is 19.9%.

It is difficult to say whether Philips decision to sell its stake in the company to Go Scale Capital will be a positive development for Lumileds. It will be difficult to judge whether Go Scale Capital will become a “good father”, but for the time being it is definitely a “wealthy dad.”   

Foshan Lighting teams up with Osram

Company: Foshan Lighting

Investor: Osram

Backer’s strength: ★★★

Conventional lighting manufacturer Foshan Lighting and German lighting manufacturer Osram history and relationship goes way back. In August 2005, State-owned Assets Supervision and Administration Commission of the State Council’s (SASAC) Foshan branch sold its 23.97% stake in Foshan Lighting to Osram Prosperity and Prosperity Lamps and Components. After the transaction, the two companies’ stake in Foshan Lighting will be 13.47% and 10.50% respectively. Additionally, there has been some disputes between Osram Prosperity and Foshan Lighting’s during their 10-year partnership, due to differences in their business strategies. Nonetheless, Osram is still a top 10 shareholder of Foshan Lighting.

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