Lower prices and government policies have stimulated the initiation of LED general lighting. From 2013 to 2015, the global lighting market will grow at 36 percent, 37 percent and 38 percent respectively. The residential LED lighting market demand will grow 157 percent, 90 percent and 62 percent respectively.

Electech currently has in possession 92 MOCVD equipments, just slightly behind San’an Opto. However, due to objective and subjective reasons, equipment utilization rate is only 50%. UBS projects as the LED industry rebounds, MOCVD utilization rates should gradually increase. Ideally, the company’s chip production capacity will be fully utilized in 2014, and potentially has significant flexibility.

Lighting Distribution and Brand Building To Become Company’s Major Focus

At the end of 2012, Electech strategically acquired 20.24 percent shares from NVC Lighting through private placement, and became the company’s largest shareholder. NVC Lighting has the strongest distribution channel and brand advantages in China. Electech and NVC Lighting business partnership includes the use of NVC Lighting brand names on Electech LED light source products, and access to NVC Lighting’s distribution channels. In oversea markets, Electech has also received brand licensing from AEG, Whirlpool Corp. and other brands. Through cooperating with competitive Chinese and foreign companies, UBS noted Electech has acquired a good position in distribution channels and brand building. The company’s related product sales volumes are expected to further increase.