Shiyida horticultural lighting products shipped in bulk | Inventronics reveals latest updates on horticultural lighting and more

Shiyida: Horticultural lighting products have been shipped in bulk, with sales maintaining an upward trend.

Recently, Shiyida stated on the Hudongyi platform in response to investor inquiries that its horticultural lighting products are mainly applied to plants such as cannabis, tomatoes, potatoes, and flowers. The company has already begun batch deliveries and continues to maintain an annual growth trend.

According to Liu Jiyong, head of Seeyoung's LED lighting business, Seeyoung began R&D of horticultural lighting products in 2019, introduced and cultivated a high-level R&D team, and accumulated strong technical capabilities. Based on its understanding of the spectrum of various plants and strategic cooperation with professional LED bead supply partners, the company can quickly customize development for customers, ensuring rapid delivery capability.

Liu Jiyong stated that Shiyida's current main products in the horticultural lighting sector include professional-grade top lights and tissue culture seedling lamps, with inter-canopy lights and other products under development. Currently, Shiyida's horticultural lighting products have begun mass delivery and are being sold to the US market. In the future, Shiyida will continue to increase R&D and market investment in the horticultural lighting sector, based on its professional-grade cannabis lighting products and markets in the US and globally, to develop more professional-grade products and customers.

Guosheng Securities believes that horticultural lighting reduces the constraints of natural light environments on agricultural production activities. Efficient plant light control methods can promote plant growth and development, achieving goals such as increased yield, high efficiency, superior quality, disease resistance, and pollution-free production, thereby enhancing agricultural output capacity. It can be widely applied in greenhouse supplemental lighting, fully artificial light plant factories, plant tissue culture, field supplemental lighting, and home vegetable and flower cultivation, offering huge market prospects.

According to a survey by the Optoelectronics Research Division under TrendForce, LED accounted for about 60% of horticultural lighting in 2020, becoming one of the fastest-growing lighting application sectors. The main drivers are the gradual legalization of cannabis cultivation in North America and the surge in the medical and recreational cannabis market size due to the COVID-19 pandemic.

According to a Technavio research report, the global market size for plant luminaires exceeded USD 3 billion in 2020, with LED luminaires reaching USD 1.9 billion (assuming the LED driver / power supply accounts for 30% of the cost, the corresponding scale is approximately RMB 365 million). China's export value of LED plant luminaires exceeded USD 500 million (accounting for 26.3% of the global share, equivalent to approximately RMB 960 million), representing a year-on-year (YoY) increase of more than fourfold.

It is also reported that Seastar's overseas orders have seen significant growth.

Liu Jiyong, head of Shiyida's LED lighting business, stated that the company has indeed seen a significant increase in overseas orders since the second half of last year, mainly due to three reasons:

First, the manufacturing bases of the company's major overseas customers in other regions around the world have been severely affected by the COVID-19 pandemic, forcing customers to transfer a larger share of their orders to Shiyida.

Second, Shiyida independently developed and designed many new products that are popular with consumers. Relying on these self-developed new products, the company has acquired many new overseas customers. Currently, most of the top ten luminaire distributors in the United States have become its clients.

Third, the company established a production base in Malaysia, which not only diversifies pandemic-related risks but also mitigates the impact of U.S. tariff increases on the company's production and operations.

Benefiting from the continuous growth of overseas orders, Shiyida's overseas sales revenue in 2020 reached RMB 407 million, a year-on-year (YoY) increase of 34.38%, hitting an eight-year high for the company. In addition, according to Xue Guixiang, head of Shiyida's smart hardware business segment, besides smart lighting, the company's chip equipment components business also experienced a highlight moment in 2021, with order volume to date exceeding previous expectations.

Inventronics releases latest research report, revealing insights on horticultural lighting and more

Recently, Inventronics participated in institutional research activities and shared updates on horticultural lighting with investors. The key information is summarized as follows:

According to Inventronics, the competitive barriers in horticultural lighting are mainly reflected at the technical level and in terms of standard access for horticultural lighting. Programmable intelligent control technology and dimming technology are relatively critical in the field of horticultural lighting, and the company has accumulated certain technical expertise in both areas.

New entrants to the horticultural lighting sector face barriers related to safety certification and must align power supply programming with customer data interfaces. Moreover, downstream customers of LED power supplies exhibit high stickiness, giving early movers in these application areas a first-mover advantage. New brands and manufacturers need to be more competitive in service, quality, and brand promotion to replace incumbent vendors, which takes time.

Domestic horticultural lighting application scenarios are mainly in areas with harsh climates, such as border defense troop stations and desert regions, as well as places requiring the creation of plant landscapes and home planting scenarios. The plants grown are mainly high-value-added Chinese herbal medicines, fruits, and vegetables.

For Inventronics, there are records of customers purchasing its products for horticultural lighting as early as 2013. The company serves horticultural lighting customers through both direct sales and distribution. Currently, Inventronics holds a relatively high share of the overseas horticultural lighting market, primarily concentrated in North America, Europe, and other regions. Many products purchased by domestic customers are ultimately exported overseas, as many domestic customers are contract manufacturers for overseas horticultural lighting clients.

Regarding the gross margin of horticultural lighting products, Inventronics' products are mainly standardized and can be used in both general lighting and horticultural lighting scenarios. They vary according to different customer project requirements and product power ranges.

Inventronics believes that horticultural lighting will not crowd out traditional lighting production capacity. The company continuously improves the comprehensive utilization rate of production capacity through measures such as ongoing product portfolio adjustment and optimization, product lifecycle management, and enhancing the informatization and intelligence level of factories. Furthermore, based on order patterns from horticultural lighting customers, Inventronics considers that the horticultural lighting industry does not exhibit significant seasonality.

Inventronics also stated that its LED drivers can be fully integrated into Agrify's hardware device, the Vertical Farming Unit (VFU), and that Agrify has been and will continue to purchase power supply products from the company.

In addition, regarding the company's overall LED driver / power supply business, Inventronics also answered related questions.

The company stated that order production planning is currently mainly affected by the semiconductor supply market, with the industry showing a trend where any product that can be delivered will receive orders. Inventronics currently adopts a flexible production model, determining which product models can accept orders based on material availability.

Regarding chip inventory, different Inventronics product models use different chips, so it depends on the specific chip model. The company previously had a standard lead time of about 3-4 weeks; now, lead times are determined backward based on customer requirements and material availability.

Regarding the rise in raw material prices, Inventronics mainly used inventory raw materials in the first quarter, so the impact of material price increases on costs was relatively small. In the second quarter, the company may face industry-wide shortages of certain components. Currently, the company is mainly adopting measures such as advance stocking, material substitution, and sourcing from the spot market to cope with the situation. The currently scarce materials mainly include chips, MOS tubes, etc.

In terms of production capacity, over 1 million power supply units were delivered in April this year. Inventronics has continuously improved the comprehensive utilization rate of production capacity through measures such as continuous adjustment and optimization of product structure, product lifecycle management, and enhancement of factory informatization and intelligence levels.

Inventronics expects the LED driver industry to maintain steady growth in the coming years, although the growth rate will slow down relatively as the industry matures. A key characteristic of the LED driver industry is the continuous emergence of new application fields, constantly raising the industry's ceiling.