Investing 200 million yuan, Jiuliang Co., Ltd. jointly established an investment enterprise

On January 11, Jiuliang Shares issued an announcement announcing that it plans to jointly invest in the establishment of Qihang Huiying Investment (Shenzhen) Co., Ltd. with Ouke Technology Co., Ltd. (hereinafter referred to as "Ouke Technology").

The total investment in the joint venture is RMB 400 million, of which the company will invest RMB 200 million with its own currency, accounting for 50% of the total investment; Ouke Technology plans to invest RMB 200 million with its own currency, accounting for 50% of the total investment.

Regarding the purpose of this external investment, Jiuliang shares stated that the LED lighting industry has matured in recent decades with the continuous updating and iteration of LED chip technology and process technology. The market competition is fierce, and the company must find new profit growth points and obtain the second growth curve.

The newly established investment company plans to carry out equity investment activities in industries such as mass consumption, biomedicine, auto parts, new energy, and high-end equipment manufacturing, and layout industry tracks with both economic and social benefits, with a view to enhancing the company's future comprehensive competitiveness and profitability.

Information shows that Jiuliang Co., Ltd. is mainly engaged in the design, research and development, production and sales of LED lighting products. It has now formed a product series focusing on LED mobile lighting and LED home lighting.

LED lighting performance declines, Jiuliang shares seek stable development through multiple channels

In recent years, the LED lighting market demand has been relatively sluggish, coupled with increasingly fierce competition in the industry, the performance of Jiuliang's LED lighting business has continued to be under pressure. In the first half of 2024, Jiuliang's LED mobile lighting and LED home lighting business revenue and gross profit margin both declined.

Therefore, Jiuliang Shares is actively stabilizing the future development of the company through various methods such as cost reduction, efficiency improvement, and business scope expansion.

In May 2024, Jiuliang Shares announced that the company’s controlling shareholders and actual controllers will change. According to the announcement, the company's controlling shareholder, actual controller and persons acting in concert signed a "Share Transfer Agreement" with Shiyan Zhongda Huixiang Enterprise Management Partnership (Limited Partnership) (hereinafter referred to as: Zhongda Huixiang).

It is worth noting that Shiyan City Operation Group Co., Ltd. holds 69% of the equity interest in Zhongda Huixiang, and Shiyan City Operation Group Co., Ltd. is a 100% wholly-owned subsidiary of Shiyan City’s State-owned Assets Supervision and Administration Commission. Therefore, after the share transfer is completed, Zhongda Huixiang will hold 18.2669 million shares of Jiuliang shares (accounting for 10% of the company’s total share capital). 11.42%), becoming the controlling shareholder of Jiuliang Shares; the State-owned Assets Supervision and Administration Commission of the Shiyan Municipal People’s Government will become the actual controller of Jiuliang Shares.

In November of the same year, Jiuliang Co., Ltd. issued three announcements. First, it planned to integrate its main business into its wholly-owned subsidiary Guangzhou Jiuliang Technology through internal asset transfers and transfers. Second, it planned to transfer the land use rights and above-ground buildings of the AB1006071 plot in Baiyun District to its wholly-owned subsidiary Guangzhou Jiuliang Small Appliances. Third, it planned to terminate the lease of houses from related parties and obtain decoration compensation.

The purpose of multiple actions is to reorganize the business structure, integrate the company's internal resources, improve overall operation and management efficiency, and reduce management costs.

The dynamics of Jiuliang Shares have become the epitome of the current LED lighting industry. More and more LED lighting companies are actively seeking new development through various methods.

According to TrendForce’s latest report "2024 Global LED Lighting Market Analysis-2H24", the LED lighting industry is experiencing a "consumer" Under the pressure of economic downturn, end consumers tend to reduce unnecessary expenses. As a relatively mature product category, LED general lighting has suppressed market demand. On the other hand, consumers are more inclined to choose LED lighting products with high cost performance, and manufacturers continue to seize the limited stock market with price concessions.

TrendForce previously estimated that the output value of lighting LEDs will drop slightly to US$3.518 billion in 2024 (-1.3% YoY) as the end-use LED general lighting market demand recovers poorly and the rising demand in emerging markets is conducive to the continued increase in shipments of mid- and low-end products.