Total amount approximately 143 million! Tospo Lighting subsidiary receives project nomination letter from NIO
Tospo Lighting (603303.SH) announced that its wholly-owned subsidiary, Zhejiang Hengdian Tospo Import & Export Co., Ltd. (hereinafter referred to as "Tospo Import & Export"), received a project nomination letter from Shanghai NIO Automobile Co., Ltd. (hereinafter referred to as "NIO"). Tospo Import & Export will supply headlight controllers to NIO.The project is expected to start mass supply in 2025, with a total amount of approximately 143 million yuan and a project cycle of 4 years, which is expected to have a positive impact on the company's future performance.
Tospo Import & Export's award of the above-mentioned project reflects the customer's recognition of the company's R&D capabilities, quality control, and manufacturing capabilities, which is conducive to deepening the business relationship with well-known domestic new energy vehicle enterprises and is of great significance for the company's layout in automotive business and its continuous and rapid development. Subsequently, the company will complete the development and production of the above-mentioned project products within the specified time according to customer requirements. It is expected that the impact of the above-mentioned project on the company's performance this year will be small, but it will help increase the company's business revenue in future years and have a positive impact on the company's future operating performance.
Image source: official website
Hengdian Group Tospo Lighting Co., Ltd. was founded in 1996. It has always focused on the general lighting industry and actively expanded into the automotive components industry. It is a comprehensive high-tech enterprise integrating R&D, production, sales, and service. Its products cover residential lighting products, commercial lighting products, and automotive series products. The company is a leading enterprise in China's lighting industry and is committed to becoming a first-class enterprise in China's automotive components industry.
In the field of automotive components, the company follows the trends of electrification and intelligence in the automotive industry, focusing on "automotive controllers" and "automotive lighting". It has professional R&D, supply chain, manufacturing, and marketing teams, as well as three major production bases in Hengdian, Shanghai, and Wuhan. Related products have been widely used in many terminal automotive brands such as Nissan, Toyota, Volkswagen, Audi, Porsche, and Chrysler.
In recent years, with intensified competition in the LED industry and compressed overall profit margins, the automotive lighting track has become a breakthrough point sought by LED enterprises. Hongli Zhihui, which mainly engages in LED business, recently released its "One Body, Two Wings" industrial development strategy, namely taking as the main body for basic support, and automotive lighting & electronics and Mini/ new displays as the two wings for growth engines.
Hongli Zhihui's 2023 annual report shows that the company achieved revenue of 3.759 billion yuan, an increase of 3.38% year-on-year. Among them, the revenue from LED semiconductor packaging business accounted for 78.39% of the total operating revenue, and the revenue from LED automotive lighting accounted for 17.57% of the total operating revenue.
"Automotive lighting products have higher requirements than residential lighting products, and their selling prices are relatively higher. Coupled with the huge demand in the automotive consumer market, Hongli Zhihui will increase its investment in the automotive sector," said Chairman Li Jundong.
Behind Hongli Zhihui's release of its "One Body, Two Wings" industry development strategy lies the outlook of domestic LED packaging enterprises for new tracks, as well as the acceleration of the localization process for automotive lighting.
Public data shows that in 2023, the penetration rate of LED headlights in new energy vehicles was approximately 95%. With the improvement of R&D capabilities among upstream, midstream, and downstream enterprises in the domestic LED automotive lighting supply chain, along with perfected device specifications, modular supply, and enhanced flexible response capabilities, the pace of domestic substitution continues to accelerate. The supply volume to the original equipment market by several domestic component manufacturers has increased by more than 50%.
According to Yole Développement forecasts, the automotive lighting market is expected to reach $42.2 billion by 2027, with a compound annual growth rate (CAGR) of 4.9% between 2021 and 2027. Many companies primarily engaged in LED lighting, including , Tubao Lighting, and NationStar Optoelectronics, have also listed automotive lighting as a key focus for their corporate development.
In the field of automotive luminaires, more than 20 well-known automakers, including Geely Auto, Great Wall Motor, Chery Automobile, BAIC Motor, and Hozon, have established cooperation with Hongli Zhihui, and multiple new projects will gradually enter mass production.
According to the strategic plan, Hongli Zhihui aims to accelerate its entry into the second tier of the automotive lighting market. Currently, among domestic automotive lighting suppliers, Huayu Vision, , and other companies hold leading positions.
However, as the automotive lighting market continues to expand, diverse lighting demands—including headlights, taillights, ambient lighting, grille lights, and wheel arch lights—are emerging alongside personalization trends, creating opportunities for performance growth among companies in other tiers.
Source: Zhitong Finance, Yicai