In recent years, benefiting from the construction of characteristic towns, night tour economic policies, large-scale "home diplomacy" activities, etc., the market scale of my country's landscape lighting industry has continued to grow, but the overall industry competition is fierce and the market concentration is low. However, in recent years, industry mergers and acquisitions have intensified. At the end of 2019, the state proposed to rectify the "excessive landscape lighting". In the future, the industry will develop in a rational direction. The landscape lighting industry will usher in a new round of differentiation and reorganization, and industry concentration is expected Further improve.
Industry competition is fierce and concentration is low
The boom in the construction of characteristic towns, the booming night tourism economy, and the continuous large-scale "home diplomacy" activities have boosted the development of my country's landscape lighting industry. In 2019, the market size of my country's landscape lighting industry has exceeded 100 billion yuan. However, in this 100 billion yuan market, competition is fierce, leading companies have not yet emerged, and the market concentration is low, with CR5 being only 3.9% and CR10 being less than 5%.
Chart 1: China's landscape lighting industry CR5 and CR10 in 2019 (unit: %)
There are many participants, but few "Double A" certified companies
Although there are a large number of enterprises involved in landscape lighting, there are only a small number of enterprises that have both the "City and Road Lighting Engineering Professional Contracting Level 1" and "Engineering Design Lighting Engineering Special Level A" certification. As of November 2020, there are only 144 companies engaged in landscape lighting business in my country that also have the "Double A" certification. Large-scale landscape lighting projects require a large amount of investment and high technical requirements. The owner will require the contractor to have the "Double A" certification at the same time, which increases the barriers to entry of the industry to a certain extent.
Chart 2: The number of landscape lighting companies with "Double A" qualifications in China from 2018 to 2020 (unit: household)
"Product + Engineering" companies entered the game through mergers and acquisitions
At present, the participants in the landscape lighting industry are mainly divided into two categories. One is "product + engineering" enterprises. Most of these enterprises are large in scale and rich in funds, but the management of enterprises is more difficult; the other is "pure engineering". "" type of enterprise, has been deeply involved in landscape lighting projects for many years, with high professionalism and brand awareness, but a single business structure, which is greatly affected by market fluctuations.
Chart 3: Comparative analysis of the advantages and disadvantages of the main players in the Chinese landscape lighting industry
Generally, "product + engineering" companies mostly enter the landscape lighting market through mergers and acquisitions. For example, Leyard, a leader in LED smart display products, has acquired a series of landscape lighting engineering companies such as Jinda Lighting, Zhongtian Lighting, and Preh Lighting. Rapidly expand the landscape lighting business; Alto Electronics relies on the original LED display product business and successfully entered the engineering market through the acquisition of Qian Baihui, a well-known enterprise in the landscape lighting industry.
The layout of "pure engineering" companies is more reflected in the expansion of market areas. Mingjiahui and Luoman Stock have both consolidated their market positions in East China and quickly extended their markets to the periphery. However, in the past two years, Mingjiahui has also consolidated its position in the landscape lighting market through the acquisition of Yongqi Lighting.
Chart 4: Summary of key events of mergers and acquisitions in China's landscape lighting industry from 2015 to November 2019
Chart 5: Layout of leading enterprises in China's landscape lighting industry
On the other hand, industry leaders attach importance to the "Double A" certification, and most leading companies have the "Double A" certification. Among them, Alto Electronics and Leyard also have "Electronics and Intelligent Engineering Professional Contracting Level One", Mingjiahui It has the certification qualification of "Electronics and Intelligent Engineering Professional Contracting Level 2"; at the same time, Alto Electronics has the "Building Mechanical and Electrical Installation Engineering Professional Contracting Level 3" certification, and Leyard has the "Building Mechanical and Electrical Installation Engineering Professional Contracting Level 2" certification; Ming Technology has two other certification qualifications: "Class A Qualification for Landscape Lighting Engineering Design" and "Class 1 for R&D and Production of Special Products for Landscape Lighting Engineering".
Chart 6: Comparative analysis of qualifications of leading enterprises in China's landscape lighting industry
Leyard and Mingjiahui are in the first echelon in revenue
The successful layout allows Leyard and Mingjiahui to quickly enter the first echelon of the industry, with revenues of 1 billion yuan and above; the second echelon is enterprises with landscape lighting revenues between 100 million and 1 billion yuan, such as Zhou Ming Technology, Roman shares, Alto Electronics, etc.; the third-tier companies are companies with revenues of less than 100 million yuan in landscape lighting, including China MMS, Zhida Optoelectronics, and China Sports Technology.
Figure 7: Analysis of the competition echelon of China's landscape lighting industry
Chart 8: 2019 A-share listing and NEEQ listed companies' landscape lighting revenue TOP11 (unit: 100 million yuan)
Zhida Optoelectronics has the highest gross profit margin
However, the gross profit margin of Zhida Optoelectronics, a company in the third echelon, is much higher than that of Leyard in the first echelon. The gross profit margins of Dart Lighting and Chuangyijia in the second echelon are also above 45%.
Figure 9: Ranking of gross profit margin of leading enterprises in China's landscape lighting industry
Fierce competition in East China
In the competitive area, the higher the level of regional economic development, financial strength and people’s income, the greater the demand for landscape lighting. Therefore, East China has become a gathering place for many enterprises, while the number of enterprises in the central and western regions is relatively small. Among them, Huati Technology The business is mainly concentrated in Sichuan Province.
However, with the steady progress of the "13th Five-Year" plan, the "One Belt One Road" strategy, and the development of the western region, the state's investment in infrastructure in the central and western regions is increasing, and the central and western regions will become a market for major companies to compete for. .
Figure 10: Competitive market distribution of leading enterprises in China's landscape lighting industry
In the future, with the transformation and upgrading of my country's landscape lighting industry, the trend of industry mergers and acquisitions will become more obvious. Leading companies will further carry out industrial integration through mergers and acquisitions, or expand their market share through mergers and acquisitions. In the central and western regions, the number of landscape lighting engineering companies is relatively small. Compared with the continuously expanding market in the entire central and western regions, there is a lack of large-scale lighting engineering companies. Leading companies in the industry may acquire companies with competitive advantages in the central and western regions in the future and further expand Market share in the country. In the future, the market concentration of my country's landscape lighting industry is expected to further increase, and the industry is expected to give birth to leading enterprises.
