MLS Co., Ltd.: Suppliers confirmed in the photovoltaic energy storage sector

On October 17, it was reported that Zhongshan MLS Lighting Technology Co., Ltd. (hereinafter referred to as "MLS Lighting"), along with individual shareholders He Xiaobing and Zhu Sanlong, recently exited their combined 100% equity stake in Guangdong MLS Smart Light Energy Co., Ltd. (hereinafter referred to as "MLS Smart Light Energy"). The stakes were acquired by MLS Co., Ltd. (hereinafter referred to as "MLS") and Zhongshan Zhongxingsenyao Enterprise Management Center (Limited Partnership).

Prior to the equity change, MLS Smart Lighting was held 55% by MLS Lighting, 35% by He Xiaobing, and 10% by Zhu Sanlong; after the equity change, MLS Smart Lighting is held 55% by MLS Co., Ltd. and 45% by Zhongshan Zhongxing Senyao Enterprise Management Center (Limited Partnership).

According to Qichacha, MLS Smart Light Energy was established in February 2020. The legal representative is He Xiaobing, with a registered capital of 110 million yuan. Its business scope includes the manufacturing and sales of lighting fixtures, sales of building decoration materials, and hardware product manufacturing. MLS Lighting was established in October 2011. The legal representative is Zhou Lihong, with a registered capital of 150 million yuan. The company is 66.7% owned by MLS Co., Ltd. MLS was founded in 1997 with a registered capital of 1.48 billion yuan. The legal representative is Sun Qinghuan, and its business scope includes professional contracting and construction for urban and road lighting projects. Sun Qinghuan holds a 44% stake in the company.

Zhongshan Zhongxing Senyao Enterprise Management Center (Limited Partnership) has a business scope that includes enterprise management and investment activities using its own funds. The company is held 60% by Leng Mian and 35.5% by He Xiaobing.

MLS Co., Ltd. recently participated in an investor survey, with investors focusing on its plans and progress in the photovoltaic energy storage sector. Selected questions are shared below.

1. What are the company's development plans in the field of photovoltaic energy storage?

Answer: The company established the subsidiary LEDVANCE New Energy, primarily targeting the European residential energy storage sector. The designed products cover application scenarios in the 5-20 kWh range for home use. The company is expanding into the energy storage business, firstly due to optimism about the future prospects of the energy storage industry, and secondly because the customer base in the residential storage sector highly overlaps with LEDVANCE's previous customers in residential lighting, facilitating the reuse of existing (Sales) channels.

Approximately 70% of LEDVANCE's overseas lighting sales are to channel customers, and about 30% are to supermarket retail. These two major channels can help the company expand into household energy storage and related products. Currently, the company has identified several suppliers and is already sending sample products to Europe.

2. It has been nearly half a year since your company's LEDVANCE New Energy was established. How is the photovoltaic business progressing in Europe? Have you started producing or selling photovoltaic energy storage-related products?

Answer: Dear investor, hello. Currently, LEDVANCE New Energy's business model is to seek high-quality domestic partners for OEM and private labeling, and to achieve product sales through LEDVANCE's overseas channels. The company has already sent sample products to Europe.

3. What is the expected demand for the European photovoltaic market next year? What competitive advantages does the company have?

Answer: According to the company's market research, the current adoption rate of residential energy storage in Europe is generally low. The company's main advantage lies in its established overseas lighting sales channels, and there is a certain overlap between the residential energy storage customer base and the existing general lighting customer base.

In the future, the company will continue to leverage its existing advantages in outlets, warehouses, and logistics, while investing significant resources to enhance market channels, supply chain development, and after-sales operations, such as training and expanding the installation workforce. Meanwhile, it will strengthen product development, aiming to achieve independent inverter development capabilities, improve product conversion efficiency, and enhance cost-effectiveness. Overall, the company has a clear plan for future development, focusing on leveraging strengths and addressing weaknesses. It also takes a long-term view, actively expanding upstream and downstream partnerships to avoid risks associated with single suppliers. From a market development perspective, brand building will provide greater competitive advantage.

4. How do the selling prices of domestic peers' overseas household energy storage manufacturers compare with the company?

Answer: Selling prices vary across different regions in Europe, and the residential energy storage products of some manufacturers may be priced higher than the company's. Compared with specialized lighting and energy storage manufacturers, the company's main advantages lie in differentiated management in terms of (Sales) channel and scale. Currently, the company's development strategy focuses more on quality and customer service, making multi-dimensional efforts in product quality, warehouse (Sales) channel construction, and installation and after-sales service to enhance user experience and brand recognition. LEDVANCE Lighting overseas has its own APP with wide regional coverage, allowing the company to build a whole-home appliance ecosystem based on the LEDVANCE APP.

5. As a leader in the lighting industry, does the company have plans to develop solar lighting businesses, such as municipal solar street lights and home solar lamps?

Answer: Dear investors, the company's lighting products cover outdoor and industrial lighting fields, and it is also actively laying out businesses such as green smart lighting and photovoltaic energy storage. Thank you for your attention.

6. What was the price decrease of the company's LED beads in the first half of the year?

Answer: In the first half of the year, some of the company's LED products experienced fluctuations due to industry and pandemic impacts. The company's cost and scale advantages will help maintain its competitive edge in the market. Management closely monitors market supply and demand conditions and dynamically adjusts sales prices for relevant products in a timely manner.

7. How has the shipment volume of the horticultural lighting segment grown this year?

Answer: Last year, the company's related business was mainly concentrated in the Xinjiang region. Since the beginning of this year, the company has actively expanded its market, with business personnel in provinces such as Inner Mongolia, Qinghai, Sichuan, and Hunan liaising on local projects.

8. The trend toward intelligence in the lighting industry is evident. Does your company have any related strategic plans?

Answer: Dear investor, hello. The company has subsidiaries specializing in the production and sales of home consumer devices. LEDVANCE operates the LEDVANCE APP overseas, enabling remote smart control of luminaires and other household devices.

9. What is the company's positioning and business model? What are the plans for production capacity?

Answer: In terms of positioning, the company places greater emphasis on brand and (Sales) channel development, focusing on product design and after-sales installation and maintenance support, while production is entrusted to upstream manufacturers. In the future, the company will secure orders based on its existing channels, arrange contract manufacturing domestically, and then Export to overseas markets. For promotion, the company will primarily target Western Europe (Germany) and Eastern Europe (Poland), mainly adopting a business model of design plus OEM/ODM private labeling.