Dajin Jingdian teamed up to seize the LED street light market

Dajin Jingdian recently formed a strategic alliance with Xiansi to develop LED technology. According to Wu Guangji, Chief Investment Officer of Dajin, the two parties cooperated to develop a new LED street light product, thereby capturing the LED street lights in the Mainland at a lower cost. market. Bai Xiquan, executive director and chief financial officer, expects that the LED-related business will start from scratch and expect to share 20% of sales and 30% of profit by the end of this year.

Annual production of 100,000 new street lamps

Wu Guangji pointed out that by forming a research and development center with Xiansixing, you can try to save the cost of 20% to 30% by using the Wave Square chip package of Xiansihang and the ceramic circuit board technology. According to this, Dajin obtained the intellectual property rights of the products, and guaranteed the supply of raw materials, and then used the distribution ability of Xiansixing to penetrate the market. In addition, because Wave Square costs half as much as external products, it provides maintenance services first, which further reduces overall production costs.

In the next two months, Dajin Jingdian's joint venture LED company will build 20,000 street lights, and will ship 10,000 by the end of the year. Bai Xiquan said that the joint venture company has an annual production capacity of 100,000 street lamps, each of which costs about 5,000 Hong Kong dollars, and even more than 10,000 yuan for engineering, electric poles and wires.

Gross profit margin 40% to 60%

With the capacity of Dajin, compared with the national demand for 3 million LED street lamps next year, its market share is still low, and the demand for expansion is relatively large. In the future, if the production capacity is to reach 200,000 baht, Wu Guangji believes that there will be a need for market fundraising by then. The group is also issuing Taiwan Depositary Receipt (TDR) financing, which is expected to take 3 to 5 months to complete. The required machine investment is 10 million to 15 million yuan per capital expenditure per 50,000 lamps. Dajin will pay attention to the acquisition opportunities related to orders and equity. Even at the customer level, the government is now mainly focusing on the business and seeking business opportunities for LED lighting renovation.

At present, the way to build street lamps is mainly based on construction and transfer (BT) and original design and production (ODM). The BT business accounts for 70% of the LED street light business, with a gross profit margin of 50%. If you are engaged in ODM, you can collect money in one go. However, with the maturity of the energy management contract financing conditions with the government in the Mainland, it will become the development trend of future orders.

Since the gross profit margin of LED street lamps is 40% to 60%, compared with the gross profit margin of general printed circuit boards, only 15%, if the proportion of LED street lighting business increases in the future, it will increase the overall gross profit margin of the group.

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