Wang Donglei: The LED industry will go out of the cycle of increasing revenue without increasing profits.


The LED industry has come out of a cycle of increasing revenues without increasing profits, and it will not last long.
Wang Donglei, chairman of Dehao Runda, has been more determined in an exclusive interview with reporters recently. With his unique intuition about the LED industry, he cut into the market five years ago, and then entered the NVC lighting at the end of 2012, and at this stage is doing a strategic layout.
When Wu Changjiang, the founder of NVC Lighting, and investors were in dispute, Wang Donglei made a decisive attempt at the end of December 2012. By absorbing Wu Changjiang’s individual shares, he became the largest shareholder of NVC Lighting.
On the staff structure, on April 5 this year, he resigned as NVC Lighting, and the chairmanship was replaced by Wang Donglei. In early June, recommended by Wang Donglei, Wu Changjiang once again served as executive director of NVC Lighting. From the acquisition of NVC lighting by Dehao Runda, it took about half a year to return to Wu Changjiang.
The cooperation between Dehao Runda and NVC has just begun. Wang Donglei said that NVC Lighting is dominated by sales, and Dehao Runda has always focused on manufacturing, and definitely needs a certain break-in period between each other. However, due to the business cooperation between the two parties (one is to sell terminal lighting products, one is biased towards LED chips and packaging technology), the two companies have a lot of cooperation space.
Dehao Runda can use its vast sales channels to expand its business. Wang Donglei believes that the cooperation with NVC Lighting is based on several aspects: First, the LED chips of Dehao Runda can supply NVC lighting, which is the upstream and downstream cooperation relationship; Secondly, the LED application products have obtained the brand authorization of NVC Lighting. Licensing can also be promoted through the sales channels of NVC Lighting. Third, they can also become partners in the project. For example, in August this year, the two parties set up LED packaging enterprises in Huizhou, Guangdong with a registered capital of 80 million yuan.
However, in terms of upstream and downstream cooperation, the upstream suppliers of NVC in the short term will not be transformed into Dehao Runda all at once. After all, the former has many suppliers, at least 200. But for Dehao Runda, it may benefit even more, because its downstream channels will become wider, which is also within the plan of Wang Donglei's acquisition of NVC lighting.
Wang Donglei does not deny that in the past, Dehao Runda was indeed positioned in the low-end LED chip products. To gradually adapt to the mid-to-high-end positioning of NVC, it is necessary to further enhance its R&D strength. This is no problem for us. And we also started to make technical reserves a few years ago, and we invest almost no cost in research and development. It is unclear how many products will be sold through NVC Lighting next year and how much sales will be obtained, but Wang Donglei said with a smile: the numbers will definitely be surprising.
At the time when the LED industry as a whole fell into a trough, Wang Donglei turned out to be optimistic: the timing of profit may be next year.
He said that in the first three years of a large number of government subsidies, LED upstream competition and oversupply, the industry has been depressed for a long time. Moreover, large-scale LED chip manufacturers such as Dehao Runda can support it, and it is also related to government subsidies and government procurement.
If the government does not support and does not purchase high-priced LED street lamps from manufacturers, no one is willing to try this industry, nor can it develop so quickly. After three years, government subsidies should be coming to an end, but the cash flow of some LED chip companies is positive, indicating that the market is also recovering. Wang Donglei said that in the past, more than 50 yuan of an LED bulb has now been reduced to more than a dozen yuan, the same price as energy-saving lamps. The change of this price system has promoted the development of LED lighting and stimulated market demand.
He feels that the downstream development of LED will be faster than the upstream, but companies like Dehao Runda will control the cash cost and actively adjust the business model, and the profit will be faster.
For example, in the production of LED chips, Dehao Runda has nearly 100 MOCVD equipment and is fully loaded. He also said that after the cooperation with NVC Lighting, the strategic focus of Dehao Runda has been adjusted. For example, more energy will be placed on channels, brands and lighting. In the past, the LED chip industry was making money, but now, LED The downstream lighting industry's gross profit is significantly higher, and we will adjust it moderately.

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