Shanghai Sansi: Going high-end is not eager to go public

Business file

Shanghai Sansi was established in 1993. At that time, the securities business department has sprung up, Shanghai Sansi aimed at this market, launched a securities market display screen, and monopolized 90% of the brokerage business department market display screen in a year.

In 1995, a number of securities market display companies joined the competition, and Shanghai Sansi decided to expand its business and enter the outdoor advertising display with higher product quality requirements. I thought about the second bucket of gold.

In 1996, Shanghai Sansi relied on the nationwide large-scale construction of high-speed companies to find the third barrel of gold - LED highway display.

In 2008, with the increase in manufacturing costs in Shanghai and the expansion of the company's scale, Shanghai Sansi decided to build a second production base in Jiashan, Zhejiang. The R&D center remained in Shanghai and its research and development direction expanded to LED lighting.

In 2010, Shanghai Sansi won the bid for the display and lighting projects of several venues at the Shanghai World Expo.

Shanghai Sansi Technology Development Co., Ltd. (hereinafter referred to as Shanghai Sansi) is located beside a remote road near Xinzhuang, Minhang District, Shanghai. The factory and the office area are connected together. There is no special care at the door, but the customers who come to negotiate business are in constant stream. .

It is such a company that looks bad on the outside world and has become the highest-selling company in China's domestic LED (light-emitting diode) industry for five consecutive years. The LED lighting application solution developed by the company in recent years is bringing benefits.

LED is the sunrise industry that the government and funds are chasing. LED can be used as a display screen, and a large number of outdoor advertisements are also presented by LED technology. Another important use in recent years is light source illumination. 80% of indoor lighting sources in Shanghai World Expo venues use LED light sources.

Chen Shou, chairman of Shanghai Sansi, was originally a researcher at a research institute in Shanghai. In the background of the business in the sea in the 1990s, Chen Bishou established Shanghai Sansi in 1993. At that time, the securities company was opening a securities business outlet. A large number of LED displays are required. Chen Bishou aimed at the securities market display screen and became the first local entrepreneur to enter the LED display field.

Shanghai Sansi is relatively new to this company because of the products used by developers, but people are familiar with the consideration of some well-known application solutions. For example, in order to welcome the World Expo, Shanghai Yan'an Road has a lighting project on the elevated night. The blue LED lights in the Yan'an Middle Road and the North-South Elevated Road are the solutions of Sansi. For another example, the National Grid Pavilion of the World Expo has a hexahedral LED full-color display called “Magic Box”.

The earliest involvement in the domestic LED industry, coupled with the country's current promotion of energy conservation and environmental protection, Shanghai Sansi's development environment can be described as "everyday and benefit." However, this low-key and simple small enterprise is also suffering from “growth troubles”. The management is worried about how to move forward steadily in the context of rapid growth and management is not out of control.

Stick to the high-end route

The development of LED display has become very popular nowadays. You can see that the street repair shop and real estate agent all use LED display to promote business. This also means that the competition in the LED industry has become increasingly fierce, and the price has become a consideration of many companies. factor. Even so, Shanghai Sansi has been taking the high-end route so far, and its concept of quality and after-sales service has not changed.

Wang Lizhong, general manager of Shanghai Sansi, said in an interview with the Morning Post reporter that the positioning of Sansi is to take the high-end route. This is also the competitiveness of Sansi. "Our products are both the securities market display and the highway guidance screen. Very high. We don't do low-end products and avoid competing with those companies."

According to reports, Shanghai Sansi's LED display has occupied 60%-70% of the national securities market display, occupying 60%-70% of the highway display, and has become a leader in the high-end LED display market.

At the 2010 Shanghai World Expo, Sansi's display screen was used in several venues. According to reports, the high-definition LED display of the main venue of the opening ceremony of the Shanghai World Expo, the LED lighting system of the display wall outside the National Grid Pavilion, and the triangular LED color display of the National Petroleum Museum are all products of Sansi. In addition to LED display, Shanghai Sansi is also focusing on expanding the new market of LED lighting, and has already made some gains. For example, Shenzhen Metro Line 2 is the use of Sansi LED lighting system products.

"We used to be the securities market display screen. The securities companies have the stocks watching the market every day, and the quality requirements are very high." Wang Lizhong said that the chairman Chen Binshou's philosophy is to focus on product quality, even if the company develops slowly, it must also Do a good job of quality. "We have done a lot of outdoor advertising LED big screens. This kind of big screen advertising is very expensive. The advertisers are some very powerful big companies. They are very important to the display. If there is a problem with the installation, the customer will continue. Will not cooperate with us again, and the word of mouth will be very bad in the industry." Because LED display is currently in the emerging industry, and the back-end processing threshold is not high, suddenly poured into a large number of small businesses, but like Shanghai Sansi There are not many companies with R&D centers. Wang Lizhong said that Shanghai Sansi's R&D center has about 200 employees, which is a relatively large number among local LED companies.

"When you take the high-end route, you will also have troubles. There are not many LED technologies in the customer. Therefore, the price is still very common. When we go to bid, we will suffer, but some customers have higher quality requirements and ultimately I would rather spend more money to choose us than to go." Wang Lizhong said that in May this year, the Shenzhen Metro Line 2 LED lighting that just won the bid in May this year, the customer multi-party comparison finally chose Shanghai Sansi.

Part of the manufacturing center moved out

In the national LED industry layout, Guangdong in the Pearl River Delta has a dominant position in LED processing and manufacturing. Shanghai's comparative advantage is that talents and original technology base are relatively high. Due to scarcity of land resources and high labor costs, in the field of processing and manufacturing. Shanghai has no cost advantage.

Shanghai Sansi has decided to move the factory to Jiashan, Zhejiang, and the company's R&D and design center will remain in Shanghai. Wang Lizhong said that the Pearl River Delta electronics factory is gathering, and the cost advantage of small enterprises doing LED terminal manufacturing is obvious. The long-term layout of Sansi is to leave the R&D center in Shanghai and the manufacturing plant to move out to seek cost advantage. According to reports, Shanghai Sansi has set up a factory in Jiashan, Zhejiang, which is twice the size of the current Shanghai factory.

“Shanghai's land resources are scarce, and the manpower is relatively expensive. On the contrary, some small cities in the surrounding areas have advantages in both land and labor costs, but we will definitely stay in Shanghai for R&D and design.” Wang Lizhong said that with the expansion of the company's scale The strength of the R&D center will be further strengthened, and the company will also be involved in technology research and development and research in other aspects of the LED industry chain.

It is understood that Shanghai Sansi plans to set up a LED application system laboratory.

The LED industry chain is divided into upstream chips, midstream packaging and downstream application solutions. The upstream chips are mainly controlled by companies such as Cree, Philips and Osram. Chinese local companies are more engaged in the middle and lower stages of packaging and application, with less technical content and lower profits.

Tang Guoqing, general manager of Career China Market Development, told the Morning Post recently that many of the local LED industry companies are not profitable by the upstream LED chips. On the contrary, almost every company has a profit. Wang Lizhong said that the company also considers that the upstream LED chip technology is relatively difficult. At present, the company does not plan to enter the LED chip field. The company still wants to concentrate on the middle and lower reaches to do a good job in application products. According to reports, there are currently more than 100 R&D personnel in Shanghai Sansi.

Suffering from "growing troubles"

At present, the LED industry is in the early stage of rapid growth, with an average annual growth rate of around 30%. The development speed of Shanghai Sansi is similar to the industry average. According to reports, in 2009, Shanghai Sansi's annual sales reached 700 million yuan, with a growth rate of around 30%. However, as a leading company in the industry, Wang Lizhong also admitted that the company had “growing troubles”.

"Many companies can't control the pace of development in the process of rapid expansion, which makes the company's development deviate from the direction. Therefore, our chairman has always emphasized the quality of products, even if the development is slower, it must develop steadily; but for the LED industry, There are many opportunities. Many small businesses suddenly grow and develop through various opportunities. How can we continue to lead? This is also a problem. If we can't stay ahead, it will be difficult to survive.” Wang Lizhong said that this is a small business. In the general problem encountered in the development process, the sales scale of several hundred million yuan can not control the development of the industry.

As a high-quality small enterprise, Shanghai Sansi had a foreign investment request, but was rejected by the chairman Chen Bishou. As a small enterprise with good prospects and good development potential, Shanghai Sansi also has the conditions for listing financing, but Chen Bishou believes that it is not the right time. The company also hopes to do well in the past few years, and does not want to mention the morning market. Make business development affected. As Wang Lizhong said, at present, the scale of Shanghai Sansi is still unable to control the development of the industry. More powerful large enterprises have entered the LED industry across the border. The Morning Post reporter learned that traditional home appliance companies such as TCL and Konka have entered the LED industry, which is bound to create a pressure on the thinking.

"TCL, Konka, a large enterprise, can use more resources than we do. They can even expand the scale quickly through acquisition. We are a small enterprise, and there are few resources that can be used, and management also has pressure." Wang Lizhong said that the company Still low-key to do their own management, do a good job, and do not plan to use the acquisition to quickly expand the scale.

Wang Lizhong said that small enterprises have different talents and management experience, and there is a gap between them. Acquisition and integration has always been a problem. The company is not ready for acquisition.

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