LED packaging products, fine-area lighting applications and Internet advertising media, seemingly less closely linked business lines in the layout of Wanrun Technology, is not the role of discrete components, but an organic whole complement each other. Based on LED, the future of Wanrun Technology is showing many possibilities.

Recently, the Shanghai Securities News reporter interviewed Hao Jun, president of Wanrun Technology. He believes that the primary task of Wanrun Technology at this stage is to digest the current industry chain, and on the basis of focusing on building a good LED sector, Wanrun Technology is steadily moving towards the goal of synergistic development of LED and Internet marketing.

Do a special LED plate to deepen the layout

Shanghai Securities News: What is the current domestic LED market? How is Wanrun Technology's position in the industry?

Hao Jun: Under the background of the continuous strong demand of the global LED industry, the competitive environment and structure of China's LED industry are continuously optimized. Taking the package in the middle reaches as an example, with the decline of the industry expansion rate, small-scale enterprises whose technology funds can't keep up with the pace are gradually falling behind, and the industry competition structure is optimized.

Wanrun's scale is not particularly large, but the idea in the LED field is very clear, that is, focusing on the middle and downstream, namely the packaging and lighting business, the industry chain is now gradually moving from LED light source device package to LED lighting and landscape lighting. Natural extension. We have set ourselves a medium-to-high-end strategy: do it exclusively. In the field of light source device packaging, our customers include TV sets such as Konka and other domestic first-line brands; in the field of lighting, we have large customers such as Op Lighting, Sanxiong Aurora, SF Express, Suning Appliance and Shenzhen Metro.

Shanghai Securities News: What kind of competitive advantage does Wanrun Technology have in the LED industry?

Hao Jun: After 2015, the company has entered the LED advertising logo lighting segment by acquiring the company, expanding the scale of the LED lighting business, and strengthening the synergistic effect of the LED mid- and downstream industry chain. LED lighting has become an important source of profit.

Specifically, I think the first is our brand. We didn't do 2C, but in the big customers of 2B, there are some TV factories that buy our packaged products, which are very recognized for Wanrun's brand. In addition, in terms of production capacity, we did not blindly replenish production capacity, but ensure the share and quality of our high-end market. Different from the high-end and low-end product lines of some enterprises, we will pursue excellence in quality and word of mouth.

Shanghai Securities News: What is the current development of Wanrun Technology in the LED sector?

Hao Jun: The company's LED packaging and lighting business is developing well. Taking lighting as an example, the company completed pre-acceptance for the newly installed subway lighting fixtures in Dongguan's first subway R2 line and Shenzhen Chegongmiao station. The company's subway lighting business should be no problem in the top three in the country. In the past two years, we have been deeply involved in the lighting construction of Shenzhen Metro, Xi'an Subway, Chengdu Metro and Dongguan Metro. It is precisely because we participated in the subway lighting earlier and have quality assurance, now the standardization construction of many products is based on us. In the field of subway lighting, our goal is to lead.

Shanghai Securities News: What new breakthroughs will the company's LED business have in the future? What are the corresponding measures?

Hao Jun: Driven by factors such as the current municipal landscape lighting and urbanization construction, we will firmly grasp the market opportunities in this area. Wanrun Technology is a product and has no design and construction qualifications. Our plan is to quickly bring the qualifications to our line and to match the products. First of all, the advantage of our products is that they can be quickly matched, and the quality and cost can be guaranteed. Secondly, we can supply ourselves and generate profits in every aspect of selling products, design and construction.

(Note: A few days after the end of the interview, Wanrun Technology announced that it plans to spend nearly 500 million yuan on the acquisition of 51% of Zhongzhu Tianyou and Langhui Optoelectronics. The data shows that both companies specialize in outdoor lighting, both It has the professional qualifications of “Class 1 of Urban and Road Lighting Engineering” and “Special Grade A of Lighting Engineering Design”. Through this acquisition, Wanrun Technology can form the upstream and downstream synergy effect of LED business.)

Diversified development of Internet media continues to exert strength

Shanghai Securities News: Can you talk about the reasons or opportunities for the company's transformation?

Hao Jun: In fact, the relationship between LED lighting products and advertising media is not shallow. LED advertising large screens and light boxes are the main applications of LED downstream industries. In fact, the company has expanded its offline advertising business along the original industrial chain and explored the business opportunities of online advertising business. Since 2015, the company has completed the acquisition of hundreds of millions of wireless standards through acquisitions and equity participation, and entered the Internet advertising media industry chain. In addition, the company completed the acquisition of Xinli Media in early 2018. These actions laid the foundation for the company's strategic transformation and sustainable development.

Shanghai Securities News: Please briefly introduce Xinli Media. What kind of strategic considerations did the company purchase from Xinli Media?

Hao Jun: Xinli Media's business mainly relies on traditional TV media and advertising, including content production. We have included it in the first place, in order to enrich the media group, and secondly, it has rich and high-quality media resources, such as Zhejiang Satellite TV, Hunan Satellite TV, Dragon TV, and Jiangsu Satellite TV. In addition, GAC, Mercedes-Benz and BYD all cooperate with Xinli Media. In general, like Xinli Media, which mainly deals with traffic agency, content marketing and first-line TV resources, as well as car advertising revenues from major customers, these are not available to us.

Shanghai Securities News: How will the company balance the business share of the two main businesses in the future? Will it be biased?

Hao Jun: In a short period of time, large-scale mergers and acquisitions in the Internet advertising industry will basically stop, and the industrial chain layout has been initially completed. We hope that in the next two or three years, the two businesses will each take up half of the business, but it is still dominated by LED business.

Shanghai Securities News: The company has formed more than 1.3 billion goodwill due to previous mergers and acquisitions. After the acquisition of Xinli Media will reach 2 billion, how can the company consider this issue?

Hao Jun: From a financial point of view, I think goodwill is not terrible. We focus on the performance of the target, and the performance is good. For example, if we buy a company, we will have our own investment team. It takes two to three weeks to enter the market and think that the quality is good. Then the intermediaries will go in again. It is not like some company mergers and acquisitions are the boss's talk, and the agreement is reached directly. One of the most important issues to focus on is the financial compliance of the underlying company. What we need to do now is to strengthen control, keep close attention, try to avoid black swan incidents, and try to prevent goodwill problems.

Shanghai Securities News: In the future, what measures does the company have to improve its competitiveness?

Hao Jun: Just in February of this year, we disclosed the equity incentive plan and used restricted stock to carry out equity incentives for the company's core backbone. Among them, in terms of company performance target assessment, from 2018 to 2020, the company's revenue growth rate is not less than 30%, 50%, 70% compared with 2017. At the same time, the incentive plan puts forward business objectives for the future performance of Rishang Optoelectronics, Hengrun Optoelectronics and Yiwan Wireless, demonstrating the company's confidence in future development.

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