A sudden new coronavirus infection pneumonia (COVID-19) epidemic swept through the land of China, and major provinces and cities across the country have launched national-level responses. Since the World Health Organization (WHO) announced on January 31 that the new coronavirus epidemic has been listed as an “emergency public health event (PHEIC) of international concern”, there has been an increasing number of voices that have adversely affected the Chinese economy. As the epidemic spread to many countries in the world, the new coronary pneumonia has a global pandemic trend, which has caused widespread concern in the industry. The dust of the Sino-US trade war has not fallen, and the new crown pneumonia epidemic is on the rise again, and the LED display industry is once again facing the test. The impact of the epidemic on the industry is geometric, and how our company can survive this disaster smoothly has become a problem that many companies must face. The epidemic situation is a major inspection of the enterprise’s ability to resist risks, and it is also a major examination of its comprehensive strength.
Overview of the overall situation——Effects of the epidemic on China’s economy
To discuss the impact of the epidemic on the domestic LED display application industry, we must first understand the impact of the epidemic on the macroeconomics. Can the basic economy be stabilized? For this question, Wang Xiaoguang, Deputy Director of the Economics Department of the Central Party School (National School of Administration) Said, “The impact of the new coronavirus infection pneumonia on China’s economy is a short-term external shock and has little effect on the economic development trend in the medium and long term.”
Experts generally believe that the epidemic will have a greater impact on the service industry in the short term, with tourism, catering, hotel and aviation industries being the most affected; due to the decline in express delivery, commercial retail including online shopping will also be affected . For industry and construction, the first quarter has a slight impact, and will gradually restore the original growth trajectory in the future.
Although the epidemic has little impact on the Chinese economy in the medium and long term, the short-term impact cannot be ignored. It is understood that affected by the epidemic, the Spring Festival holiday is extended, the movement of people is restricted, and the delay in resumption of work in various places. The epidemic has a great short-term impact on China’s economy. Market entities that are seriously affected by the epidemic are facing greater survival pressure, especially small and medium Enterprises in manufacturing and service industries deserve special attention.
Due to the decline in consumer demand, some SMEs may have cash flow problems due to lack of orders. At the same time, the limited mobility of personnel also directly or indirectly leads to rising logistics costs across the country. While pushing up prices in the short term, it may also cause some enterprises’ supply chains and post-holiday rework to be affected by them, which will increase their production.Cost.
It is foreseeable that under the influence of the epidemic, some small and medium-sized enterprises may fail due to short-term shocks, which may lead to bankruptcy. Therefore, large enterprises seek stability and small and medium enterprises seek survival, which will become a normal situation during the epidemic.
Everyone is in the city——LED display application companies are in action!
The epidemic is merciless, and the world is affectionate.
The sudden outbreak completely disrupted people’s rhythm. Different people responded differently to the outbreak. “Home” has become the norm for most of us at home. However, the white angels who fought on the front line did not have a “house”; those who continuously delivered materials for the frontline of anti-epidemic did not have a “house”; LED showed that people did not have a “house”. At the critical moment, they all came forward, Contribute one’s own strength to the anti-epidemic work!
On January 28, Sanan Optoelectronics decided to donate 10 million yuan to Jingzhou City in the name of “Fujian Sanan Group Co., Ltd., Sanan Optoelectronics Co., Ltd.” to fully support the prevention and control of the new crown epidemic in Jingzhou City; on February 1, Under the instruction and arrangement of Chairman Yuan Yonggang, Dongshan Precision, together with its subsidiary Yancheng Weixin Electronics Co., Ltd. (representing Yancheng Dongshan Precision Industrial Park), passed through the Red Cross Society of Wuzhong District of Suzhou City and the Red Cross Society of Yandu District of Yancheng City Each donated RMB 5 million (a total of RMB 10 million) to the Hubei Provincial New Coronary Pneumonia Prevention and Control Headquarters, which was specifically used for the frontline epidemic prevention and prevention work in Wuhan, Hubei and other places; District Red Cross and other relevant groups donated 5 million yuan, including 3 million yuan in cash and 2 million yuan in global procurement of materials; since the closure of Wuhan on January 23, Liad Group and Fanxing Education Fund have never stopped supporting Wuhan. Donated 5 million yuan of materials for the prevention and control of the new coronary pneumonia epidemic; Alto Electronics donated a total of 1 million yuan to Wuhan City in two batches (February 18, Alto Electronics donated 500,000 yuan to Wuhan City. On February 20, Alto Electronics donated RMB 500,000 to Wuhan City through the Shenzhen Aoai Charity Foundation initiated by the company) … In addition, a number of enterprises such as Jingtai Optoelectronics and Jichuang North also generously contributed and contributed With his own strength, he will support the people in the disaster-stricken areas of Hubei and demonstrate the company’s sense of social responsibility and courage to take responsibility.
Epidemic disease is merciless, there is love on earth. Mr. Wu Hanqu, Chairman and President of Alto Electronics, said: “It is the wish of all Chinese people to overcome the epidemic. Only when the epidemic is eliminated will China be better and Chinese enterprises can develop better. As a listed company, Alto Electronics has always actively fulfilled its social responsibilities , And initiated the establishment of Shenzhen Aozhi Charity Foundation, the foundation ’s money all comes from donations from the company and shareholders, we have to contribute to the national anti-epidemic! There are many companies like Alto Electronics in the industry, And it’s our LED display people’s pride “
Since the outbreak, our industry associations have not been idle for a moment. At the beginning of the outbreak, they closely followed the developments, and some member companies spontaneously donated funds and materials and other deeds to the disaster-stricken areas. Enterprises take action and jointly contribute their own strength to the anti-epidemic work. At the same time, the leaders of the association more actively instructed the industry enterprises to do epidemic prevention and control work, conducted a comprehensive investigation on the industry’s resumption of production, the difficulties faced by the enterprise, etc., and learned in detail about the industry’s resumption of production and production. Diagnose the dilemma, give full play to the functions of the association, communicate with relevant government departments, and feedback the demands of enterprises, so that the country can introduce relevant policy support from the policy level.
Wind and rain without hindrance-LED display application industry resumes production
According to previous years, LED display application companies will kick off the New Year’s prelude from several major exhibitions overseas and domestically. Participating in international exhibitions is the highlight of LED display companies, and represents an important journey for display companies to embark on the New Year. However, affected by the epidemic, in addition to the Dutch ISE exhibition held successfully this year, several major international LED exhibitions in China have to be postponed. The organizers of the ISLE 2020 exhibition held in Shenzhen International Convention and Exhibition Center, Shenzhen International LED Exhibition, and Beijing InfoComm China 2020 exhibition Successively released information about the extension of the exhibition. In the past years, LED display companies around the exhibition began to work in the new year have been disrupted plans, the original schedule for resumption of production was also forced to adjust.
Enterprise resumption: the rework rate of enterprises was low in February
Since the outbreak of the Spring Festival, the General Office of the State Council has issued a notice to extend the Spring Festival holiday to February 2. Subsequently, governments in various regions of the country issued notices one after another in accordance with the grim situation, requiring all types of enterprises not to resume work as early as February 9, followed by national economy The provinces have successively introduced the earliest resumption period in different time periods. In extraordinary times, enterprises returning to work will face the test and pressure of quarantine inspection, control of potential epidemic risks and health protection for returning employees.
China’s LED manufacturing companies are mainly concentrated in the Yangtze River Delta, Pearl River Delta, Fujian Delta and other regions. The Pearl River Delta is the gathering place for the development of LED display applications. However, due to the strict travel regulations in various regions, road transportation is subject to different conditions. The degree of control not only affects the return of employees, but also affects logistics. A large amount of logistics capacity needs to support the transportation of medical supplies and civilian products in Hubei and other places. Materials and procurement supplies in all links of the industrial chain are restricted. The full-scale resumption of production by enterprises poses challenges.
In the early stage, in the absence of masks, medicines, disinfection, and related epidemic prevention and treatment materials, many companies and employees could not buy masks at all, and could not meet the requirements of the local governments for construction. Due to the restriction of measures, the return of employees to work is also a big problem. Based on this situation, many display screen companies have adopted the mode of online work, limited return to work, or home office before February 9.
In the early stage of the outbreak, through online video conferences, remote training, etc., actively carry out work layout, coordinate partners, maintain customers, and at the same time carry out education and advocacy work on employees in the prevention and control of outbreaks. Decided that all employees will work from home on February 3-9, and companies such as Abison, Lehman, and Lianjian Optoelectronics have also started an online office mode during this period.
As the epidemic is gradually being controlled, travel restrictions in some places have been relatively relaxed, and enterprises have carefully deployed the prevention and control of the epidemic. After making various preparations for resumption of production, many companies in the industry began to have Order to resume work.
Company recovery rate: LED chip / LED package recovery rate is high, LED display is less than 50%
On February 17th, the second batch of resumption of labor ushered in nationwide, and more enterprises began to resume offline production. From the perspective of resumption rate, the resumption rate of major economic provinces such as Guangdong, Jiangsu and Shanghai has exceeded 50%, of which large enterprises Compared with the rapid recovery of small and medium-sized enterprises, the resumption of production related to epidemic prevention and control related materials has achieved remarkable results. In the LED display application industry, the vast majority of enterprises are small and micro enterprises, and the relatively large resumption rate is slightly insufficient. Although there are many rework companies, the resumption rate is relatively low, among which upstream chip companies and midstream measurement companies have resumption rates as high as 70% -80%, but for downstream applications, the average resumption rate is less than half. According to our research, the recovery rate of enterprises in the upper and middle reaches is higher, such as Huacan Optoelectronics, Guoxing Optoelectronics, Zhaochi Co., Ltd. and other companies. The recovery rate is as high as 70%. It is expected that full production will be restored from March to April, but Downstream display application companies, the resumption of production and production is low, generally less than 50%, and the general resumption rate in February is between 30% and 40%.
Huacan Optoelectronics is one of the few LED manufacturers that can mass-produce three kinds of red, green and blue light-emitting chips. It has a very important position in the industry. Its registered place is exactly in Wuhan, Hubei. Since the outbreak, as an upstream LED company, its production and operation are closely related. The LED display supply chain is stable, but according to the announcement issued by Huacan Optoelectronics on February 6, its main production operations are in Huacan Optoelectronics (Zhejiang) Co., Ltd., Huacan Optoelectronics (Suzhou) Co., Ltd. and Yunnan Lanjing Technology Co., Ltd. At present, the company has no production in Wuhan, and only retains a small number of management and sales personnel. According to our understanding, Huacan Optoelectronics has started the online office mode before February 10th. By the end of February, Huacan Optoelectronics’ recovery rate has reached more than 80%. Guoxing Optoelectronics, as a domestic packaging leader, has resumed its work. Production is also related to the safety of the midstream of the display industry, and according to public information, the National Star Optoelectronics RGB business unit has started online office as early as February and officially resumed production on the 10th. It is expected that full production will be achieved in the middle and late March .
The LED chip and packaging links have been reworked and produced well. What is really worrying is our downstream application. LED display companies belong to the “ordering system”, and customized products are closely related to the order quantity. After the previous year’s exhibition, companies were able to harvest a lot of orders, and then drove full horsepower to start the new year of production. However, under the epidemic, the exhibition was postponed and all projects related to LED display screens were basically at a standstill. The output is also the existing order before the completion of the year, and no new order is added.
In this case, most LED displays will face tight cash flow problems. As the industry generally adopts the prepayment production mode, and there is no order, the enterprise will appear only out of the situation. For some OEM enterprises, the pressure will be even greater. After all, the landlords have no surplus grain.
According to our assessment, if the epidemic situation is controlled, the LED display industry can basically recover the full production state before the outbreak from May to June.
Joining together — Opportunities and challenges for LED display companies
There is an old saying in China that the blessings are the basis of the disaster, and the blessings are the basis of the fortune, and everything has advantages and disadvantages. In the more popular Western saying, God closes a door and opens a window for you. This epidemic is certainly a crisis, but the so-called crisis has always been an organic crisis. Danger and opportunity coexist, depending on how we respond and grasp it.
One thing is basically certain, China is the world’s largest LED display R & D and production country, China’s LED display industry has an irreplaceable position in the world. The epidemic will not change the overall pattern of the LED display industry. Its impact on the LED display application industry will be short-term, but its impact may also be profound. However, regardless of the length of the impact, how to survive, to overcome the current difficulties smoothly, is the most urgent task of most of our enterprises. Then, under the circumstances that the current epidemic poses challenges to the company’s production, sales, and even after-sales links, how LED display companies respond to challenges and seize opportunities has become a problem for many entrepreneurs to think about.
LED display application industry chain pressure
China has the most complete industrial chain and supply chain in the LED display application industry. LED display involves the upstream chip industry, midstream packaging and terminal application links. Each link involves a wide range. Each link involves almost raw materials and other materials. Before the level response was lifted, transportation was restricted, and logistics was more or less affected by it. Collaboration between midstream and downstream companies on the LED display was inevitably affected. Due to the impact of the epidemic, it has become obvious that the purchase demand for terminal applications has been suppressed. In the short term, the pressure to reduce the end application demand for LED display screens will gradually be transmitted upwards, and the industry’s overall supply chain is under pressure.
The most worrying thing is that with the outbreak of Japan and South Korea, the development of the semiconductor industry is worrying. In the semiconductor industry, Japan and South Korea occupy a very important position. If Japanese and South Korean companies are affected by this, the production capacity of wafers, capacitors, and resistors will be limited. At that time, the price increase of semiconductor raw materials will be transmitted to the country, which may lead to The price rises. The pressure of the industrial supply chain will be a fatal blow to small and micro enterprises. After all, small and micro enterprises generally do not have inventory, and suppliers will surely give priority to those manufacturers with excellent capital and technical strength under the shortage of resources. Enterprises may face the situation of “cooking without rice”.
In addition, the resulting chain reaction may cause the price of the LED display to rise. This year, there may be a short-term “price increase tide” in the LED display market.
Missing order, cash flow problem
In the current LED display application industry, the upper and midstream companies have high resumption of production and recovery rate. One of the root causes of the low downstream application companies is the lack of orders. No order is the biggest challenge for LED display companies!
Since the outbreak, catering and entertainment gathering places across the country have been closed, but all group activities involving crowd gathering are at a standstill. As a typical engineering application attribute product, LED display is very heavy. Since the beginning, most of the display companies have faced the next situation, and they have all seemed to have no worries. They have scale and comprehensive development companies. Whether they are cash flow or various resources, they are relatively sufficient. At present, large enterprises are mainly seeking stability. , And some small and micro enterprises are more tight.
In the production of LED display screens, the industry generally adopts the production mode of project advance payment. The enterprise receives a certain percentage of the customer’s deposit and then begins to prepare for production matters. After the delivery of the goods, it also faces the problem of a long payment cycle. This will be a huge challenge for some small and micro enterprises, especially small and micro enterprises.
Development of LED conference system
During this period, we can also see that many enterprises initially adopted online office and remote office mode. Through online video conferencing and other methods, not only can they reduce aggregation during this epidemic period, but also ensure the safety of employees and save money. Many manpower and material costs. Some enterprises even make full use of “remote charging” for distributors during online outbreaks through online remote training and other means to prepare for the outbreak.
Video conferencing is therefore generally regarded as the “new outlet” of the future industry. It is understood that telecommuting has a higher penetration rate in European and American countries. It is estimated that about 50% of technology companies in the United States will have about 29% of employees working in telecommuting in 2020, while China has a low penetration rate and huge room for growth in the future. In fact, the development of LED display conference systems in the past two years has become a trend, and companies such as Absen, Liad, Alto Electronics, etc. have all launched display systems for conferences. Some display companies have launched products such as conference all-in-ones.
Under the epidemic environment, video conferences highlight the characteristics of high efficiency and security. In the future, with the development of 4K / 8k HD and 5G, the development process of video conferences will be accelerated, and the development of LED display screens in conference systems will also receive more and more. The attention of display companies.
Company perfects itself
This epidemic is a test of the LED display company’s research and development, production, management and sales, and after-sales service. It is a test of the company’s ability to resist risks, and it is also a verification of our company’s comprehensive strength. The sudden epidemic situation tests the rapid response capability of our display company and the response mechanism to the crisis. It can reflect the coordination ability of various departments of the enterprise, from the production to the control of the sales link.
In a sense, the epidemic is a “miraculous mirror”, which will allow our business to show its original shape and let us see our true body. Through the epidemic, we can discover our own strengths and weaknesses, especially the decision-making ability of an enterprise leader. We can even say that the epidemic is a big test for the head of the enterprise. There is no shortage of business leaders in the industry who are forced to isolate because of close contact. This situation further tests a company’s ability to respond to risks.
Since the epidemic occurred, we can see that all display companies in the industry have taken the lead and actively organized anti-epidemic work to plan for the resumption of production and production. At the same time, the leaders of our display companies also used the various methods and channels to help the disaster areas.
The epidemic situation allows us to see the responsibilities and responsibilities of the enterprise, but also allows us to discover the deficiencies that exist, and this is an excellent opportunity to improve ourselves. For the advantages, we must continue to carry forward, for the deficiencies, we must work hard to change.
Promote standardization system construction
LED display is a product with engineering attributes, and its customized production mode has always been the main format of the LED display industry. However, we also see that in recent years, the standardization process of LED displays under customization has been steadily advancing, and various standards have been introduced one after another. From technology to products, the industry’s standard system is becoming more and more perfect.
In terms of products, such as the standardization of rental products, from the box to the installation, some “conventional” standards have been produced. Whether it is the ratio of the module of the product, or the practicality and simplicity of product installation and use, leasing Product standardization is gradually taking shape.
In this LED display application industry, the reason why the upstream and middle-stream companies have high recovery rates and the downstream application companies have low recovery rates. The fundamental reason is that under the “customization”, companies do not have orders. Dare to turn on the production machine. If the standardization of LED displays is realized, then this problem may not exist.
In recent years, industry associations have been actively promoting the construction of standardization systems, and have adopted a number of standards related to LED display screens. After this incident, companies must strengthen their contact with the association and accelerate our standardization process as soon as possible. , Establish a complete standardization system, so as to better serve the industry and develop and grow the industry.
Speed up the process of automation and intelligence
Under the new crown epidemic, LED display application companies will have to face the problem of employee return rate to finally realize the resumption of production and production. As we all know, the customized process of LED display, even if it is the usual daily operation, is also clearly distinguished between the off-season and the peak season. There are many orders in the peak season, the factory is busy, overtime works, and there are often shortages of soldiers and horses. The land is decreasing, and many employees of the company are beginning to face the situation of “nothing to do”. Therefore, promoting standardized production and increasing the degree of automation and intelligence will undoubtedly be the solution to save enterprise costs and improve production efficiency. This epidemic may accelerate the process of enterprise automation and intelligence.
Strong confidence——The LED display industry has good development prospects
Bao blade comes out from sharpening, plum fragrance comes from bitter cold.
Most LED display companies are actually in the fierce market competition, the environment has come all the way, experienced ups and downs. Although the impact of the epidemic is great, it has indeed brought many challenges to our company. However, for most display companies, this is just an unexpected storm, and after the storm, we will see a gorgeous rainbow.
As of 20 March 1st, Beijing time, a total of more than 7,600 newly diagnosed cases of new coronary pneumonia have been reported in 61 countries and regions outside China. All six continents except Antarctica have been covered. The World Health Organization did not say that the pandemic hopes not to cause panic, but as it now appears, the epidemic has actually spread throughout the world. China’s LED display screens are sold globally. From last year, about one-third of products were exported. Faced with this situation, many business people are more pessimistic about this year’s development. For many companies, the aftermath of the Sino-US trade war is unabated, and the sudden epidemic is nothing more than worse. However, the more this time, the stronger our confidence.
Although under the influence of the epidemic, most of the engineering projects related to LED displays are also in the same state of stagnation, we are actually aware that once the epidemic passes, these suppressed demand will be released, and the market may be Ushering in a wave of retaliatory growth.
For most LED display companies, China is still the most important market. Despite the emergence of a new coronary pneumonia epidemic, 2020 is a crucial year for China to build a well-off society in an all-round way. National policies will not change. In the face of the short-term blow of the epidemic, the country must have relevant policies to stimulate economic growth. According to a daily economic news report, as of March, China, Henan, Yunnan, Fujian, Sichuan, Chongqing, Shaanxi, Hebei and other 15 provinces have launched key project investment plans, and the investment scale in 2020 will exceed 6 trillion yuan, which will be announced simultaneously. Nine provinces with a total investment scale of over 24 trillion yuan. 9 provinces plan a total investment of 24 trillion!
In fact, since the outbreak of the epidemic, LED display companies have not been fighting alone. Recently, governments around the world have issued relevant policy support. Local governments such as Beijing, Shanghai, Suzhou, and Shenzhen have issued bailout policies, such as reducing corporate water and electricity fees and reducing levies. Many social benefit measures such as social security expenses and lower corporate income tax rates. As an enterprise, we should always pay attention to the changes of relevant national policies in order to obtain greater subsidies.
In the face of the epidemic, no company can be alone, and no company can deal with it alone. We can only keep our hands together to overcome the difficulties, but in the final analysis, the most important thing for our company is to have confidence.
I believe that the cold winter will pass and the spring will come!
Post time: May-11-2020