Tens of millions of products are sold a year, and suppliers are also rushing for IPO!

As the global LED lighting market grows steadily, more and more Chinese companies are extending their business tentacles overseas. As the largest manufacturer of LED lighting products, China's exports reached US$21.43 billion in the first half of 2022, and sellers who have deeply cultivated this category have made a lot of money.

Annual revenue exceeds 1 billion, Minbao Optoelectronics is aiming for IPO

As an enterprise focusing on the green lighting business, Shenzhen Minbao Optoelectronics Co., Ltd. (hereinafter referred to as "Minbao Optoelectronics") is mainly engaged in the research and development, design, manufacturing, sales and service of LED lighting products. The LED lighting fixtures produced by the company are mainly used in commercial and industrial fields.

It has established a subsidiary focusing on overseas markets, iGest, and a domestic self-owned brand, Upshine . Through the ODM and OBM models, it sells its products to developed countries including Europe, Oceania, North America, etc. At present, Minbao Optoelectronics is striving to be listed on the Growth Enterprise Market and is in the inquiry stage.

Its products are mainly divided into two categories ↓

Commercial lighting : downlights, ceiling lights, panel lights, ceiling lights and bracket lights, mainly used for lighting in shops, shopping malls, offices and other places.

Industrial lighting : mining lamps are mainly used for lighting in warehouses, factories, workshops and other places; floodlights are mainly used in squares, parks, ports, etc.; street lamps are mainly used in main roads and highways.

The company maintains close cooperation with overseas listed companies such as Endo Lighting, Iwasaki Electric, Cree, Rexel and Gavis, as well as well-known local brands and engineering companies in the importing countries. In terms of revenue from new and old customers during the reporting period, its revenue is relatively stable. From 2019 to 2021, the revenue from old customers has remained stable at more than 90%, and the revenue has been growing year by year.

During the period from 2019 to 2021, the three-year revenue was RMB 1.082 billion, RMB 1.059 billion and RMB 1.497 billion respectively; the net profit attributable to the parent company was RMB 202 million, RMB 177 million and RMB 170 million respectively.

In terms of the company's main business revenue, commercial lighting accounts for the largest revenue, with revenue of 862 million yuan in 2021, accounting for 57.65% of the main business revenue; industrial lighting revenue accounted for 42.35% of the main business revenue, reaching 634 million yuan.

In the financial report, we can see that although commercial lighting accounts for a large proportion of revenue, in terms of sales unit price, the unit price of street lights, floodlights and mining lamps in the industrial lighting category is basically between 420 yuan and 550 yuan per set, while the unit price of commercial lighting lamps ranges from 23 yuan to 130 yuan. The unit price of industrial lighting products is much higher than that of commercial lighting products.

In terms of sales, the demand for commercial lighting products is much higher than that for industrial lighting. According to data from 2021, more than 90% of the 13.51 million lamps sold by Minbao Optoelectronics were commercial lighting products.

As a high-tech enterprise in China, Minbao Optoelectronics was once named one of the top 50 companies in China's LED industry in terms of revenue in 2020. Its subsidiary, Aegist, is also a leading company in the export of industrial lighting, and its main products such as mining lamps, floodlights and street lamps are among the best in the industry.

While the world is eliminating high-energy-consuming lighting methods, governments around the world are vigorously supporting energy-saving and environmentally friendly LED lighting products. In the three years before 2019, the global LED lighting market grew at an average annual compound growth rate of 6.30%, and the market size also increased from US$56.377 billion to US$67.715 billion. It is expected to grow to US$82.042 billion in 2026.

At present, the global lighting industry has formed a pattern centered on North America, Europe and Asia. Among them, countries in Europe, North America, Oceania and other regions pay more attention to the creation of light environment, and their special light culture is also an important reason for the widespread export of LED lighting products.

In addition to the traditional European and American markets, the LED industry in Southeast Asia and Africa is immature and has high demand. Domestic lighting companies are also bucking the trend in exports due to insufficient external demand for lighting products.

The North American market has always been a gold mine for Chinese LED companies , with nearly two-thirds of LED lamps in the United States coming from China.

Demand for LED lighting products in Europe, America and emerging markets surges

The growing demand for LED lighting products in Europe, America and emerging markets has brought market dividends to companies such as Minbao Optoelectronics, which will last for a long time. As the largest export market for LED lighting products, the US market is naturally favored by relevant sellers.

In 2020 and 2021 alone , domestic exports of LED lighting products to the United States increased by 30% and 35% respectively, and the amount of domestic lighting products exported to the country in 2021 was close to US$14 billion. Markets such as Europe, Japan, and South Korea followed closely behind, and consumer demand remains strong.

On several major e-commerce platforms such as Amazon and Walmart, the sales of lighting products have increased rapidly. During the traditional European and American holidays "Christmas" and "Black Friday" in the second half of each year, the sales of such products have increased most significantly.

In terms of subdivisions, LED lighting products are mainly divided into LED light sources, LED lamps, LED lamp electrical accessories and other lighting devices. LED lamps are further divided into general and special lighting according to their application fields. Depending on the application fields, consumers have different diversified and personalized demands for related products.

In the fields of home, commercial, office lighting, etc., overseas consumers have different focus on product demands . In the field of home lighting, consumers have few application function requirements for lighting products and are sensitive to prices, which has led to a prominent problem of product homogeneity in the field of home lighting.

The commercial lighting sector is currently the largest market for LED lighting products in the world. Most of the clients that companies connect with are commercial enterprises, so they pay more attention to the visual experience of the products. The industrial lighting sector, due to the complexity of usage scenarios, pays more attention to the quality, function and service life of the products.

In response to this, Minbao Optoelectronics has strengthened its response speed to the market, is able to provide customized needs for customers, and has improved its supply speed and capabilities in overseas markets, shortening the product development cycle. At present, Minbao Optoelectronics has developed more than 40,000 LED lighting products, which has a great advantage in the industry.

However, the huge size of the European and American markets has led to a large number of competitors in the field of LED lighting products. Well-known domestic and foreign brands include Lidaxin, Guangpu Co., Ltd., Signify, and Osram, etc. Several brands have been deeply involved in this field for many years, with annual sales ranging from tens of billions to tens of billions of yuan.

In addition, the lighting manufacturing industry in the European and American markets is also well developed, and the supporting facilities are relatively complete. Among the top ten lighting companies in the world in terms of revenue, the United States accounts for a large proportion. Facing a group of strong competitors, Minbao Optoelectronics said that while consolidating its own advantages, it will also work hard to expand its business scale and increase production capacity in the future.

The expansion of the LED lighting market has provided development opportunities for more sellers interested in entering this field. However, in the context of serious product homogeneity problems, sellers still need to conduct market research, product selection and R&D based on their own strengths, selected markets and consumer habits.