Songsheng's revenue exceeded 1.1 billion yuan in 2021, with horticultural lighting business growing more than fourfold

In 2021, Songsheng continued to deepen its presence in the medium and high-power LED driver market, leveraging its business focus advantage to drive rapid company growth, with revenue surpassing 1.1 billion yuan.

According to the company's latest 2021 annual report released on March 26, during the reporting period, the company achieved revenue of RMB 1.101 billion, a year-on-year increase of 62.74%; net profit attributable to shareholders of the listed company was RMB 129 million, a year-on-year increase of 29.77%; basic earnings per share were RMB 1.56, a year-on-year increase of 11.43%.

In 2021, Songsheng's performance benefited from the overall rapid growth in market demand in the LED lighting industry and the strong drive from the emerging horticultural lighting market. Coupled with its business advantages in this field, the company's business scale continued to maintain rapid growth.

LED horticultural lighting becomes a new business growth point

China Light Network noted that in 2021, the company actively expanded into the emerging horticultural lighting market, with LED applications in horticultural lighting becoming a significant new growth driver for its business development.

The annual report shows that in 2021, Songsheng Shares' revenue from horticultural lighting LED driver products reached RMB 446 million, a year-on-year (YoY) increase of 435.69%. Its share of total revenue rose from 12.30% in 2020 to 40.48% in 2021, driving the company's rapid revenue growth during the period.

During the reporting period, the Company continued to leverage its prominent first-mover advantage in the field of horticultural lighting applications and further expanded its LED driver business for horticultural lighting. Centered on the rapidly growing market for LED horticultural lighting applications, the Company has established several star product series of dedicated power supplies for grow lights, including the VP series, M series, VA series, and LV series. Continuously responding to customer demands, it has launched ultra-high-power models such as 800W and 1000W. Currently, its main products cover an ultra-high-power range of 100W–1000W, achieving relatively comprehensive coverage of application needs in niche market segments.

Songsheng stated that, targeting the LED driver / power supply sector for horticultural lighting, the company strategically laid out its R&D for LED driver / power supply products for horticultural lighting in 2018 and launched a series of products specifically dedicated to LED horticultural lighting in 2019. This enabled it to seize market development opportunities early during the rapid start and growth of LED horticultural lighting since 2020, establishing a prominent first-mover advantage. During the reporting period, the company further positioned LED drivers for horticultural lighting as one of the key strategic directions for its product business.

On August 4, 2021, the company signed a strategic cooperation agreement with Fujian Zhongke Biology Co., Ltd., an advanced enterprise in the domestic horticultural lighting field, to fully leverage the advantages of both parties in the upstream and downstream of the LED horticultural lighting and supporting LED driver / power supply industry, and jointly promote the expansion of their product markets in the field of LED horticultural lighting.

Driven by the rapid overall growth in market demand for LED horticultural lighting in 2021, downstream luminaire manufacturers both domestically and internationally have actively expanded into LED horticultural lighting, thereby creating strong market conditions for the high-power LED driver industry applied in this sector.

Songsheng Co., Ltd. recently stated during an institutional survey that the company remains very optimistic about and values the horticultural lighting sector . Although there were short-term demand fluctuations last year, the underlying logic of this industry's development has not undergone any fundamental adverse changes: first, it continues to hold significant importance for the development of agricultural technology; second, no disruptive alternative technologies to LED and its supporting LED driver / power supply have emerged in the present or foreseeable future; and third, the growth ceiling of the LED lighting and LED driver / power supply industry is still primarily driven by the continuous expansion of specialized emerging markets, with horticultural lighting remaining one of the key areas within these specialized emerging markets.

In addition, some positive and favorable factors reflected last year and currently can be observed:

(1) Among the more than 500 national standard (mandatory / recommended) plans released at the end of 2021, technical standards related to horticultural lighting were included, filling the gap in domestic industry standards;

(2) Some major domestic manufacturers and institutions such as the Academy of Agricultural Sciences are accelerating their deployment of cutting-edge horticultural lighting technologies. Songsheng Co., Ltd. will closely follow these technological advancements, with future R&D focusing on next-generation horticultural lighting technologies and power supply applications. The R&D center recently funded through convertible bonds is also dedicated to reserving this technology.

(3) Recent news reports indicate that the use and cultivation of industrial hemp in the United States will be legalized at the federal level, marking another step toward legalization. This may promote the adoption of horticultural lighting in the short term.

Focus on corebusiness development strategy, explore emerging market opportunities

Songsheng has established a product business system covering three major application areas: Horticultural lighting + Industrial lighting + Outdoor lighting, continuously exploring incremental opportunities in emerging market applications to drive rapid business growth, and has become one of the most competitive supplier brands in the medium and high-power LED driver / power supply sector in China.

The company's products are mainly supplied to downstream LED lighting manufacturers for the production of medium and high-power LED lighting products. The end products are primarily used in large-scale outdoor LED lighting facilities such as urban bridges, highways, tunnels, and airports, as well as industrial LED lighting facilities like factory buildings and warehouses. In recent years, leveraging its first-mover advantage in business layout, the company has established a prominent market position in the field of horticultural lighting, successfully creating a new growth point for its business, and continues to expand into emerging application areas such as smart lighting and UV lighting, thereby realizing value extension in product applications.

Focusing on the two major application areas of road lighting and industrial/mining lighting, the company has now formed over 30 series and more than 500 best-selling product models. Its main medium-to-high power products cover a power range of 25W-600W. There are 15 series available specifically for industrial/mining lighting, making it one of the brands with the most complete product specifications in the field of LED drivers for industrial/mining lighting. The company's product layout covers most applications in outdoor road lighting and industrial/mining lighting, laying a solid foundation for its relatively comprehensive market coverage.

The company is also actively laying out future business development in the field of smart lighting for smart cities. It has obtained the qualification accreditation for the "Guangdong Provincial Engineering Technology Research Center for Outdoor High-Power LED Smart Drivers for Smart Cities", and its "Songsheng High-Power LED Smart Driver Industrial Design Center" has been accredited as a "Guangdong Provincial Industrial Design Center". The company's "Key Technologies for Integrated Power Supply Systems for 5G Smart Street Poles" was included in the "2021 General Technical Breakthrough Projects of the Shenzhen Science and Technology Innovation Commission", creating conditions for the company's business development in the smart lighting field.

Songsheng Shares continues to deepen its presence in the medium and high-power LED driver market. In 2021, revenue from high-power LED drivers reached RMB 1.01 billion, a year-on-year increase of 69.20%, accounting for 91.71% of total revenue, up from 88.21% in 2020.

In addition, in 2021, the Company accelerated the construction of projects funded by its initial public offering, and completed the topping-out of the main structure of the production base in November 2021.

Songsheng Co., Ltd. was officially listed on the ChiNext board of the Shenzhen Stock Exchange in June 2021, achieving its strategic goal of entering the capital market. 2022 marked the company's first full fiscal year after its IPO. Looking ahead, Songsheng stated that it will achieve sustainable business development while supporting epidemic prevention and control measures, strengthen operational management, and continue to reward shareholders with strong performance.

（1）研发端：聚焦公司“植物照明+工业照明+户外照明”的三大产品应用领域业务体系，将对应细化形成细分领域专业化的研发项目组，全面提升研发端的聚焦度和精细度。

(2) Client side: Establish the market brand image of the company's professional services, focusing on strategic target customers, and optimize to form a professional customer service team integrating R&D, sales, and supply chain.

(3) Management side: Continue to implement the refined management model of "digitalization" for all employees, continuously improving the efficiency and effectiveness of operational management.

(4) Production side: Actively advance the construction of projects funded by the initial public offering, complete the completion of our own production base and put it into operation as soon as possible, and further upgrade production capacity manufacturing towards intelligence, automation, and scale.

(5) Talent: Recruit industry elites and cultivate internal potential talent to form a high-quality, professional talent pipeline.

Songsheng Power will appear at the China (Shenzhen) Lighting Industry Chain Technology Innovation Exhibition (CLITI), using a 54-square-meter booth as a platform to showcase its years of expertise and technical solutions in LED driver / power supply.

The exhibition will make a grand appearance at the Shenzhen World Exhibition & Convention Center from September 14 to 16, focusing on the entire lighting industry supply chain. With the theme "Integration of Technological Innovation, Enhancing Quality through Intelligence and Green Practices," it integrates industry resources to build a new integrated "conference + exhibition" platform for global lighting industry business matchmaking, information release, and display of technological innovation achievements.

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Email: qiuchun@cali-light.com

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