The company plans to publicly issue 23.63 million shares; its LED horticultural lighting power supply business is performing strongly.

Driven by the rapid growth of the LED lighting application market, the concentration of the medium and high-power LED driver industry is continuously increasing. On the evening of May 16, 2021, Songsheng Shares (full name "Shenzhen Songsheng Electronics Co., Ltd.") officially disclosed the "Prospectus for Initial Public Offering and Listing on the ChiNext Board," adding another high-power LED driver enterprise to the capital market.

Songsheng not only has formed outstanding advantages with highly complete specifications and comprehensive market coverage in the two major application areas of Road lighting and industrial lighting, but also possesses striking first-mover advantages in emerging growth markets such as Horticultural lighting and smart lighting.

Another strong player joins the ranks of listed LED driver companies

Songsheng Co., Ltd. plans to conduct an initial public offering of no more than 23.63 million A-shares on the ChiNext Board of the Shenzhen Stock Exchange, accounting for 25.00% of the total share capital after issuance. After deducting issuance expenses, the raised funds are planned to be invested in the following projects: RMB 399 million for the high-power LED smart driver production base project and the smart power supply R&D center project; RMB 60 million for supplementing working capital.

Since its establishment, the company has focused on the R&D, production, and sales of medium- and high-power LED driver products, and is currently one of the major suppliers of medium- and high-power LED driver products in China.

The prospectus shows that Songsheng Co., Ltd. has maintained rapid business growth in recent years. From 2018 to 2020, the company achieved Revenue of RMB 438.8241 million, RMB 567.7085 million, and RMB 676.4205 million respectively; and Net profit of RMB 50.063 million, RMB 83.8895 million, and RMB 99.4905 million respectively. From 2018 to 2020, Revenue and Net profit after deducting non-recurring gains and losses achieved high compound annual growth rates of 24.15% and 41.82% respectively. From January to March 2021, the company achieved Revenue of RMB 241 million, a Year-on-year (YoY) increase of approximately 160.86%; Net profit was RMB 26.7404 million, a Year-on-year (YoY) increase of approximately 156.49%.

With ten years of deep cultivation, Songsheng has grown into one of the most competitive high-power LED driver brands in China. Focusing on the two major application areas of outdoor road lighting and industrial & mining lighting, the company has formed 29 series with over 300 best-selling product models, holding more than 250 multi-country product certification certificates. Its products are widely used in large-scale outdoor LED lighting fields such as urban bridges, expressways, tunnels, and airports, as well as in industrial LED lighting fields like factory buildings and warehouses. The company independently masters multiple core technologies of LED drivers, holds 117 authorized patents (including 17 invention patents), and is recognized as a National High-Tech Enterprise, Shenzhen Enterprise Technology Center, and Guangdong Engineering Research Technology Center, while also participating in the formulation of multiple domestic industry standards.

此外，公司积极顺应新兴照明市场的发展趋势，将主营业务不断向智能照明、植物照明等新兴照明应用领域拓展，充分把握以智慧灯杆为代表的智能照明、以植物照明为代表的工业照明新兴市场的行业机会。

The company was listed on the National Equities Exchange and Quotations (NEEQ) system in July 2017, with the stock abbreviation "Songsheng Shares" and stock code "871785". In June 2019, with the approval of National Equities Exchange and Quotations Co., Ltd., the company delisted from the NEEQ system.

Today, Songsheng is continuously strengthening its efforts in the emerging incremental market with vast potential, securing a prominent first-mover advantage in LED horticultural lighting. Meanwhile, the company has recently partnered with the international lighting giant OSRAM to jointly research smart city smart lighting and actively expand its presence in this sector.

Shengshi Holdings holds a first-mover advantage in the horticultural lighting sector

According to the prospectus, among Shengsong Shares' new business segments, the LED driver / power supply for horticultural lighting has performed prominently in recent years.

LED horticultural lighting is a comprehensive system integration project involving multiple disciplines. The accompanying LED driver / power supply must meet extremely stringent requirements for the LED horticultural lighting spectrum and plant growth environment across various technical performance indicators, such as conversion efficiency, precise light control, and lifespan, presenting a very high technical barrier.

Leveraging its technical advantages, Songsheng strategically entered the horticultural lighting sector as early as 2018. After one year of R&D, it launched LED driver products specifically for horticultural lighting in 2019, continuously intensifying its focus on this market. In 2020, the breakout year for horticultural lighting, the company successfully seized significant market opportunities.

In 2020, Songsheng Co., Ltd. achieved RMB 83.1888 million in sales revenue from related products in the LED horticultural lighting application field, accounting for 12.30% of Revenue; in the first quarter of 2021, Songsheng Co., Ltd. generated RMB 112.2224 million in revenue from LED driver / power supply products for horticultural lighting, with the proportion of Revenue rising to 46.51%, driving rapid growth in the company's overall business revenue.

It is evident that Songsheng, with its forward-looking business layout, has secured a prominent first-mover advantage in the field of LED horticultural lighting drivers.

Facing the promising field of LED horticultural lighting, Tian Nianbin, Chairman of Songsheng Shares, stated, "The company will continue to focus on the horticultural lighting sector, continuously increasing R&D investment and business proportion. In the future, LED drivers for horticultural lighting will also become a new growth point for the company's performance."

Horticultural lighting becomes a golden niche track

Since the COVID-19 pandemic in 2020, ensuring adequate grain reserves has become a top priority for public welfare. Plant factories, assisted by LED lighting, operate continuously 365 days a year, making a significant contribution to the ample supply of the "vegetable basket".

Plant factories adopt a three-dimensional production method. By using high-precision environmental control technology to intelligently regulate factors related to plant growth, such as temperature, humidity, carbon dioxide, and lighting, they simulate the plant growth environment. This approach saves production land while enabling year-round continuous crop production.

According to CCTV film and television materials, in modern plant factories, LED horticultural lighting equipment greatly shortens the growth cycle of crops. Crops that originally required a 70-day cycle for open-field cultivation have their growth cycle reduced to 20 days under the effect of horticultural lighting. At the same time, the yield per unit area is also significantly increased. Originally, crops harvested about 5 times a year can reach around 18 harvests per year in vertical plant factories with horticultural lighting, thanks to uniform illumination.

Agricultural analysts point out that horticultural lighting is currently applied to various high-value cash crops, especially providing indoor growing solutions for cannabis plants in North America. AI and big data-driven growing solutions help customers maximize yield, produce high-quality crops, and improve profitability. Industry insiders also predict that with the widespread adoption of technology and policy support, LED horticultural lighting will be widely used in indoor agriculture.

In 2020, many industries entered a downturn due to the pandemic, but horticultural lighting bucked the trend to become a fast-growing niche within the LED lighting sector. According to the export report released by the China Association of Lighting Industry (CALI), driven by multiple factors such as the legalization of commercial cannabis in North America, global shortages of food and medical supplies caused by the pandemic, and increased home confinement, exports of horticultural lighting products saw a significant year-on-year (YoY) increase in 2020. While many leading horticultural lighting companies doubled their performance, more new players also entered the market.

By comparison, LED horticultural lighting, as a new type of light source, offers many advantages such as higher wall-plug efficiency, tunable spectrum, and high photosynthetic efficiency. Compared with traditional horticultural lighting, LED horticultural lighting also provides benefits including energy saving, environmental protection, long lifespan, monochromatic light, and cold light source characteristics. Currently, LED lighting has been applied in fields such as plant tissue culture, leafy vegetable cultivation, plant factories, seedling factories, edible mushroom factories, algae cultivation, plant protection, and flower cultivation.

At this year's "Two Sessions," representatives raised the "seed issue," and the core issues of "seeds and land" were also mentioned in the Central Government's 14th Five-Year Plan for 2021. Therefore, industry insiders generally predict that the LED horticultural lighting market will continue to explode in the fields of agricultural planting and home gardening. (Source: Securities Times Network)