The emergence of small spacing LED display marks that LED display technology has formally entered various indoor applications. We believe that small spacing LED display technology will rapidly enter the indoor application in the next few years with its advantages of seamless, excellent display effect, continuous semiconductor technology progress and cost reduction. Small spacing LED display is expected to replace the old large screen display technology in stages, wholly or partially, and fill the technical gap. The potential market space is over 100 billion, which will show explosive growth in the next few years. We expect that in the next five years (2014-2018), the market size of small spacing LED display products will grow at a compound rate of 110%.

       Main points of view

       The first stage is to enter the professional indoor large screen display market. In command, control, monitoring, video conferencing, studio and other professional indoor large screen display applications, small spacing LED display is expected to replace DLP back projection splicing technology, LCD/plasma splicing technology, projection fusion technology and other mainstream technologies. We expect that the global potential market for small spacing LED displays in this application area will be more than 20 billion.

        In the second stage, we will enter the field of business conference and education. The application of business conference display field includes large-scale meeting and small-scale meeting, the former is more than 100 people's meeting room such as parliamentary meeting room, hotel, conference room of enterprises and institutions, and the latter is mainly a small meeting room with an index of 10 people. The application in the field of education ranges from elementary school classrooms to university staircase classrooms. The number of students in each classroom is tens or hundreds. At present, projection technology is mainly used to display the required information in these fields. We believe that the global effective market space of small spacing LED display in this field is more than 30 billion.

        The third stage is to enter the high-end home TV market. Limited by the technology of LCD TV, there is a lack of technology in the field of large screen and high-end household TV over 110 inches, and projection technology is difficult to meet the requirements of high-end users for viewing effect.      Therefore, small-spacing LED display technology is expected to achieve brilliant results in this field in the future. We conservatively predict that small-spacing LED display technology will go global in this field. Effective market space is over 60 billion. Entering this field, we still need technological progress, improvement of workmanship and cost reduction. At the same time, we also need enterprises to improve the layout in product design, sales channels and post-maintenance.

        Large screen display, cinema and projection hall are also important potential markets. With the price of small spacing LED display products dropping, small spacing LED products are gradually being used in the common indoor display field, which used to display advertisements and information with large spacing LED display screen. In addition, standard cinemas and non-standard projection halls are also trying to use small spacing LED display technology. The global potential of these markets is expected to reach 10 billion.

        Focus on Recommendation

        We believe that the outbreak of demand in the small spacing LED display market will directly bring a broader market space and higher performance growth rate to the downstream application enterprises of LED display. We recommend focusing on Leyard, Unilumin, Absen, LianTronics and Aoto Electronics.

       The rapid growth of the downstream LED display application market will also have a significant pull effect on the packaging industry in the middle of the industrial chain. It will directly benefit the suppliers of LED display packaging devices, recommend to pay attention to Nationstar, as well as the integrated enterprise Absen.

       For the upstream LED chip industry, the expansion of the market capacity of the LED display screen will directly bring a broader market space for the LED chip industry. It is suggested that attention should be paid to Sanan Optoelectronics, Huacan Optoelectronics and Shilanwei.