Tough times! One lighting company declares bankruptcy, while an optoelectronics firm announces a strategic pivot!

Recently, Guangdong Juli Lighting declared bankruptcy, like a huge stone thrown into a lake, creating ripples and attracting widespread attention from inside and outside the industry. At the same time, Jiangxi Qiantaiheng Technology Co., Ltd. also announced major changes, planning to exit the optoelectronics industry it has cultivated for many years and transform to focus on plastic products business. These heavy-hitting news items continue to shock practitioners.

"Debt Black Hole"! Juli Lighting Declares Bankruptcy

Recently, another bad news came from Zhongshan, Guangdong, the "Capital of Decorative Lighting" – Juli Lighting declared bankruptcy.

On January 24, 2025, the Second People's Court of Zhongshan City, in accordance with the application of the asset administrator, legally ruled to declare Juli Lighting Company bankrupt and terminate its bankruptcy proceedings. The relevant announcement has been published on the National Enterprise Bankruptcy Restructuring Case Information Network.

As of that date, following strict review by the asset administrator, the total amount of confirmed ordinary claims against Juli Lighting Company reached 29,948,231.24 yuan, employee claims amounted to 741,791.67 yuan, and subordinated claims totaled 2,015,452 yuan, with cumulative claims of all types exceeding 30 million yuan. However, the company's total assets amounted to only 2,328.67 yuan, indicating an extremely severe situation of insolvency. The company's condition is typical of expenditures exceeding income and liabilities exceeding assets.

The asset administrator stated that Juli Lighting Company has completely lost the ability to repay debts due to production halt, and its assets are far insufficient to cover all debts. Given the current absence of any possibility for settlement or restructuring, the company fully meets the conditions for corporate bankruptcy.

According to available information, Juli Lighting Company operates in the electrical machinery and equipment manufacturing industry. Its main business includes the production, processing, and sales of various luminaires, with products covering lighting luminaires, LED products, and electrical accessories for lamps.

Industry experts analyze that the bankruptcy of luminaire manufacturers such as Juli Lighting mainly stems from a sharp contraction in market demand. In recent years, the real estate market has remained sluggish (with commercial housing sales area decreasing by 14.3% Year-on-year (YoY) in 2024), putting continuous pressure on downstream home furnishing enterprises. As one of the main market sources for the luminaire manufacturing industry, the shrinkage in real estate construction has directly led to a decline in luminaire demand. Particularly in the high-end residential and commercial real estate sectors, work stoppages on projects by some large real estate developers have caused a sharp drop in luminaire demand.

Of course, in addition to this, small and medium-sized enterprises also face rising raw material costs, supply chain issues, and pressure from leading companies. Accelerated market exit due to broken capital chains and difficulties in transformation has become inevitable.

Since 2024, many companies in China's LED lighting industry have fallen into bankruptcy liquidation. According to incomplete statistics, more than 70 decorative lighting companies disclosed relevant bankruptcy liquidation announcements in 2024, a number basically flat compared to 2023.

Among them, small and medium-sized enterprises have become the "hardest-hit areas" of bankruptcy. These enterprises are often small in scale, with limited financial strength and weak risk resistance. Coupled with fierce market competition and soaring raw material costs, the break of the capital chain is only a matter of time.

"Abandoning optoelectronics for plastics"! Qiantaiheng plans to exit the optoelectronics industry

On March 4, Jiangxi Qiantaiheng Technology Co., Ltd. (stock abbreviation: Qiantaiheng) announced that, in view of the company's consecutive years of losses, to restore normal operations and improve profitability, the company plans to change its main business and scope of operation, adjusting its main business from the production and sales of optoelectronic product R&D, electronic products, plastic products, etc., to businesses related to plastic product manufacturing and sales.

The announcement shows that this change in main business will cause a change in the industry to which the company belongs. The main business will not change to private equity business, nor to other businesses with financial attributes. The changed main business does not require relevant qualifications and complies with current regulatory requirements; given that the company has been in a loss-making state for many consecutive years, the company has changed its business scope and has made full preparations for the change of main business.

It is reported that, as of December 31, 2024, Qiantaiheng's main revenue came from the sales of plastic products by its subsidiary Jiangxi Xinhangxing New Materials Co., Ltd., and the change in revenue structure led to a change in its main business. Regarding this change in main business, Qiantaiheng stated that this change in the company's main business is a strategic adjustment made from the perspective of long-term development, which has positive significance for the company's development.

According to information, Qiantaiheng was established in 2007 and was listed on the National Equities Exchange and Quotations (NEEQ) in 2015. Before changing its main business, Qiantaiheng was a high-tech optical materials enterprise specializing in the R&D, production, and sales of optical-grade diffusion plates, reflective films, LED panel frames, Panel light, etc. The company has a research and development team focused on LCD module optical materials, and possesses relatively advanced production equipment and manufacturing processes.

In fact, Qiantaiheng has suffered from losses for many years. Until recent years, Qiantaiheng still had significant losses. In 2022, the Net profit attributable to shareholders of the listed company was approximately -21.1977 million yuan; in 2023, the Net profit attributable to shareholders of the listed company was approximately -15.5316 million yuan. In this year, Qiantaiheng also moved from Dongguan to Jiangxi, and the company's full name changed from the original "Dongguan Xinju Optoelectronics Technology Co., Ltd." to the current "Jiangxi Qiantaiheng Technology Co., Ltd." In the first half of 2024, Qiantaiheng achieved Revenue of approximately 6.9034 million yuan, a Year-on-year (YoY) decrease of 63.02%; the Net profit attributable to shareholders of the listed company was approximately -4.9688 million yuan.

Data from the 2023 Annual Report

In August 2024, Qiantaiheng also issued the "Announcement on Uncovered Losses Reaching One-Third of Total Paid-in Share Capital". The announcement showed that as of June 30, 2024, the accumulated amount of undistributed profits in Qiantaiheng's consolidated financial statements was approximately -102 million yuan, while the company's paid-in share capital was 35 million yuan, meaning the uncovered losses exceeded one-third of the total paid-in share capital.

In response, Qiantaiheng analyzed that its 2024 operating performance indicators showed a downward trend, mainly because the traditional optical materials Industry in which the company operates is a low-gross-margin Industry, with overcapacity in the TV Industry market, low external market prices, and declining unit prices for some products.

Qiantaiheng also stated that the company has taken measures to actively address the issues: regarding the problems existing in operation and management in the first half of 2024, the company will improve through specific measures such as strengthening internal management, controlling costs, increasing external communication, and incentivizing employees; in the future, the company will continue to increase investment in product research and development, achieve the upgrading and transformation of traditional optical material processes, while increasing investment in independent innovation, boosting sales revenue, and expanding product coverage.

However, although it once vowed to achieve the upgrading and transformation of traditional optical materials, it is now helplessly undergoing transformation.

From Juli Lighting's "2,328 yuan in assets" to Qiantaiheng's "abandoning optics for plastics", the LED and related industries are undergoing a "major reshuffle". The turning point in the fate of these two companies is a microcosm of the current predicament in the lighting industry. Many practitioners are groping for answers in the dark about where the industry is heading in the future. While some companies are busy laying out new tracks such as smart lighting and Horticultural lighting, companies that are still "competing on cost" will eventually be abandoned by the times.