NVC's 1.25 billion sales target is difficult to achieve contradictions or ferment again

In the past four months, the incident of NVC Lighting's shareholder guilt has always been the focus of media attention. After various executives left the company and the masses went on strike, the dispute ended with Wu Changjiang returning to NVC. After the reunification, Wu Changjiang formulated the sales target of 1.25 billion yuan in September-December 2012. In this regard, Dr. Zhang Xiaofei, Dean of the Higher Industrial Research Institute, said that this goal is impossible to complete. After this dispute, NVC can no longer return to its previous position in the field of traditional lighting.

The lack of a short board in the opponent's industrial chain is obvious or it is difficult for the NVC to turn over.

Zhang Xiaofei believes that the current lighting industry is mainly divided into four main forces:

First of all, there are more than a dozen companies with more than one billion scales in the traditional lighting industry. They are doing very well in terms of packaging, lighting, and channels. These companies all want to be the industry leaders. These companies exist. It itself poses a great threat to NVC.

Secondly, Philips, the best international company to enter the Chinese lighting market in the early days, is about one billion yuan larger than NVC. It has absolute advantages in the upstream and downstream industrial chains such as chips and packaging. These advantages are guaranteed. The overall quality level of its products. However, NVC is lacking in the middle and upper reaches of the industrial chain. It can only rely on the purchase of chips produced by other manufacturers. The quality of the products will not be guaranteed, which will threaten its brand reputation.

Third, in addition to traditional lighting companies, LED lighting companies that have mastered more technologies such as heat dissipation and driving are more ambitious. With the rise of the revolutionary technology of LED lighting, a large amount of capital and enterprises flooding into the market, these will bring great impact and changes to the industry, and also put a lot of pressure on NVC.

Fourth, it is a state-owned enterprise that may change the industry development process and brand distribution. The state-owned enterprises that can survive today are all rectified and have certain strengths. These state-owned enterprises, with local advantages or policy advantages, occupy a large part of the lighting market, namely the government. The leading projects of all kinds have more advantages than ordinary private enterprises, Taiwan enterprises, and foreign enterprises.

Under the guise of the above four forces, it is basically impossible for NVC to restore its previous status. Coupled with the long-term lack of NVC's industrial chain in the middle and upper reaches, and the product crises that may be caused in the future, it will add a lot of difficulties and obstacles.

In addition to the growing strength of competitors will pose a threat to NVC, this year's overall market environment has also brought a lot of pressure on NVC. “Everyone agrees that this year’s industrial environment is not optimistic.” Dr. Zhang predicted that “the annual growth rate of the lighting industry will not exceed 30% this year.”

NVC Lighting achieved sales revenue of $589 million last year. According to its planning at the beginning of the year, this year's sales target will increase by 20% on the basis of last year, that is, to achieve sales income of 706.8 million US dollars. However, according to its 2012 interim results report, NVC's sales revenue in the first half of the year was 256 million US dollars (about 1.626 billion yuan), down 4.1% year-on-year, achieving a net profit of 6.468 million US dollars, down 83.7%. Even if the target of 1.25 billion is completed in the second half of the year, it will only be completed less than 80% of the sales revenue last year. 60% of the original target this year, not to mention that NVC is likely to fail to reach 1.25 billion in the second half of the year.

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