Following the development of a 1000-package production line plan in June 2017, Zhaochi Energy (838750) decided to increase its investment in 500-1000 LED packaging lines. On May 29, Zhaochi Energy announced that the company is expected to increase its business in the future according to the business needs of existing customers and market development. After signing an agreement with the People's Government of Qingshan Lake District of Nanchang City, the company signed an investment agreement. The Supplementary Agreement has amended and supplemented the original contents of the agreement as follows: The original agreement stipulated that Jiangxi Zhaochi newly invested in 1000 LED packaging production lines. Now Jiangxi Zhaochi intends to increase investment in 500-1000 LED packaging production lines based on the original agreement. Before the end of 2019, Jiangxi Zhaochi plans to invest 1500-2000. Strip LED packaging production line (excluding 200 existing production lines of Jiangxi Zhaochi). Zhaochi Energy said that after steady development in recent years, the production scale has grown rapidly and the business volume has been rising. It has strong market competitiveness in the industry. With the steady expansion of the business scale, the existing packaging capacity can no longer meet the needs of business scale. In particular, since 2017, with the deepening of the business cooperation between Zhaochi Energy Saving and Korean, Taiwanese and domestic first-line brand customers, its production capacity has continued to be tight. In 2018, with the increasing concentration of the industry, the vertical integration trend of the entire industry chain has gradually emerged. In this context, the expansion project of LED packaging production line has become one of the important measures for Zhaochi Energy to carry out strategic deployment around the business goal of “becoming a leading LED enterprise in Chinaâ€. The LED packaging expansion project, Zhaochi Energy has been strongly supported by the Nanchang Municipal People's Government, not only in the factory, industry support, collaborative support, talent awards, major industrialization projects, etc., but also the project's preferential policies. The operation has obtained the necessary financial support to help the project carry out quickly and smoothly. Gaogong LED was informed that as of the end of 2017, the single-chip capacity of Zhaochi energy-saving packaging production line reached 4000 KK/month. After the expansion project is put into production, its production capacity will increase significantly. Zhaochi Energy said, “This investment will help the company optimize resource allocation and improve its overall core competitiveness.†As we all know, with the advent of the LED era, the technology and product iteration cycle is accelerating, the integration trend of light source lamps, product form and diversification of demand have increased the technology, manufacturing and competition barriers of the lighting industry, and thus promoted the reshuffle of the industry pattern. The speed of industrial integration has accelerated and the concentration has gradually increased. As far as the packaging industry is concerned, the concentration of China's LED packaging industry is still low, so the expansion of large factories and industry reshuffle will continue in 2018. It is worth mentioning that both the top-level design of the government and the industry practitioners are optimistic about the rapid development of the LED packaging industry in the next two or three years. As a leading LED enterprise in China, Zhaochi Energy Conservation Co., Ltd. has seized the development opportunity of increasing industry concentration, further expanded its production scale and continuously improved its position in the LED packaging industry. In addition to expansion, Zhaochi Energy will adhere to the development concept of “Product Leading, Quality Control Leading, Service Leadingâ€, focusing on the middle and high-end LED market, and is committed to integrating independent research and development of advantageous resources.
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