Foreword
Before the liberation, there were very few urban lighting project construction projects in China. Since the founding of New China in 1949, it has gradually developed from nothing, especially in the past 20 years under the wave of reform and opening up, China's urban lighting project construction has developed rapidly and achieved remarkable results. Reviewing the development history of urban lighting engineering in China for nearly 70 years, it can be divided into five stages: starting and starting stage, key development stage, comprehensive development stage, rapid development stage and sustainable development stage.
Urban Lighting Project: Functional + Landscape
Foreign development is mature, China is in the growth stage
1. Lighting project: to meet the lighting requirements of specific light environment with natural light or artificial lighting
Lighting engineering refers to the design, technology, and engineering of natural light or artificial lighting systems to meet the lighting requirements of a particular light environment. Depending on the nature of the function, the lighting engineering business can be divided into functional lighting and landscape lighting:
Functional lighting is mainly for the purpose of satisfying people's visual work and is a kind of general lighting. The functional lighting field mainly includes road lighting, tunnel lighting, rail transit lighting, urban lighting, etc. Generally, the engineering volume is large and the gross profit margin is low.
Landscape lighting refers to the analysis of the behavior and psychological state of people in various spaces of the landscape, combined with the characteristics of the landscape and the surrounding environment, showing the unique form and spatial connotation of the landscape in the form of lights at night, reshaping the daylight of the landscape. The style and the visual effect of living alone at night create a unique landscape that integrates functions of lighting, viewing and beautifying the environment. The landscape lighting field mainly includes the lighting of bridge landscape, the lighting of the square landscape, the lighting of the shopping mall landscape, the lighting of the building landscape and special buildings and special natural carriers such as mountains, lakes, trees, caves, rivers, water surface lighting, etc. The value is high and the gross profit margin is high.
Landscape lighting is different from functional lighting: urban landscape lighting construction is profitable and priced, while functional lighting construction is entirely a non-profit urban public service, and the government has to pay the full cost.
Figure 1: Lighting Engineering Business Classification
Source: Huati Technology Announcement, GF Securities Development Research Center
Since 2007, with the advancement of technology, LED luminous efficiency has increased, cost has decreased, and the industry has developed rapidly. LED lighting products have also become the main materials of the industry. In the field of functional lighting, it was mainly based on high-pressure sodium lamps. In recent years, the emergence of ultra-high-brightness and high-power white LEDs has led LED applications from signal, display and backlight applications to high-power road functional lighting. The services and technologies in this field are in a period of change, and the service and product performance are gradually accepted by the market, and the whole is in a period of rapid development. The services and technologies in the field of landscape lighting are basically mature, the market acceptance is high, and the industry capacity is growing steadily.
Figure 2: Overview of the upstream and downstream of the lighting engineering industry
Source: China Industry Information Network, GF Securities Development Research Center
2. Foreign lighting projects: starting early, the industry is mature, can learn from experience
Foreign developed countries have entered the industrialized society earlier, and the urbanization process is leading more domestically. Therefore, the infrastructure construction is complete, and functional lighting projects such as roads, rail transit, and urban areas have continued to develop, and are currently in a relatively perfect state. Landscape lighting is the extension and creation of functional lighting. It began with the concept of urban night lighting proposed by New York in the 1920s. It has become an important symbol of modern urban development and service capabilities, and an important part of the city's competitive soft power.
3. Development experience of foreign urban landscape lighting
(1) The government-led and rational planning makes the development of landscape lighting match the urban function and culture. Beginning in the 1970s, the British government took the lead in formulating a nightscape lighting plan. Subsequently, France, Germany, the Netherlands, and the governments of the United States, Japan, and Singapore also began to formulate urban night lighting plans.
(2) Operate landscape lighting as a city brand. For example, European cities generally explore local traditions, show the charm of landscape lighting in the form of lighting festivals, and promote the development of urban tourism.
(3) City alliance and common development. The major cities in Europe have jointly established the “International Urban Lighting Federation†(LUCI), which is based in Lyon, to lead the sustainable development of urban landscape lighting.
(4) Diversified financial channels, government, public welfare organizations, and private capital are united. In terms of landscape lighting construction funds, most of the foreign landscape lighting construction is jointly undertaken by the government, chambers of commerce, associations and relevant benefit agencies, and urban market management means are adopted to introduce market funds. For example, Nike cooperates with the “Light Graffiti†sports design project in the “Night Mill Area†in the UK, investing 40 million pounds for the development of the late intelligent service of the city's night lighting; the French Republic pedestrian street night lighting project is to own the building right. The owners raised funds for construction. In addition, the government will provide financial subsidies for private building landscape lighting, forming a virtuous cycle of “lights to attract customers, merchants to promote business, and commercial lampsâ€.
Table 1: Comparison of urban and landscape lighting development between China and foreign countries
Source: “International Experiences in Urban Landscape Lighting and Its Implications for China†(Journal of Lighting Engineering, Vol.26, No. 3, Ying Yingqi, etc.), GF Securities Development Research Center
4. China's urban lighting project: from scratch, rapid development, remarkable results
Before the liberation, there were very few urban lighting project construction projects in China. Since the founding of New China in 1949, it has gradually developed from nothing, especially in the past 20 years under the wave of reform and opening up, China's urban lighting project construction has developed rapidly and achieved remarkable results. Looking back at the development history of urban lighting engineering in China for nearly 70 years, it can be roughly divided into five stages.
(1) 1949 ~ 1960 start and start stage
At this stage, China's urban lighting project construction is concentrated in Beijing, Shanghai, Tianjin, Guangzhou and some provincial capital cities, such as Chang'an Street in Beijing, Nanjing Road in Shanghai, Heping Road and Jiefang Road in Tianjin, and Zhongshan Road in Guangzhou. Taking into account the technical background at the time, the lighting equipment is simpler and the illumination level is low. At this stage, there are very few urban landscape lighting projects, except for some landmark buildings in big cities, such as Tiananmen Square in Beijing and the top ten buildings of the 10th anniversary of the National Day, the Shanghai Sino-Soviet Friendship Building and the Southwest People’s Grand Hall in Chongqing. There are no landscape lighting in the building. At the time, the way of night lighting was almost always based on the outline lighting, and only the major festivals were turned on.
(2) Key development stages from 1961 to 1980
During this period, China experienced economic difficulties and social unrest. The construction of urban lighting projects was similar to other projects, and was greatly affected by the social and economic changes at that time. However, road lighting and key architectural landscape lighting in some key cities are still evolving. Many of the urban road lighting began to use high-pressure sodium lamps, and high-pole lighting began to be used in urban squares, ports and terminals, such as Beijing East Chang'an Street and Jianguo. High-altitude lighting project in the inner section of the gate, Chegongzhuang Street, Shanghai Yan'an Road and Nanjing Central Gate Square. The night lighting improvement project of Beijing Tiananmen Square during the 30th anniversary of the National Day was also completed at this stage.
(3) 1981-1999 comprehensive development stage
According to statistics from the Institute of Building Physics of the China Academy of Building Research, there were only 21 cities in the country in 1983, with a total of 480,000 street lamps. By 1999, there were 63 cities with over 100 million street lights, and the total number of street lamps reached 1.46 million, quadrupling. At this stage, the technical and management level of urban road lighting engineering has been comprehensively improved. First of all, the variety, quality and style of lighting sources and lamps have been greatly improved and increased, and the lighting effect has been significantly improved. Many urban streetlight power cables have been put into the ground, and concrete poles have been replaced with steel poles.
At this stage, the construction of urban landscape lighting project has also entered a period of comprehensive development. Especially in 1989, Shanghai took the lead in implementing the renovation and construction of night lighting projects in the Bund and Nanjing East Road scenic spots, followed by Beijing, Tianjin, Chongqing, Guangzhou, and Shenzhen. Zhuhai, Dalian, Qingdao and Hangzhou also carried out concentrated construction of scenic night lighting projects. Many of the cities took the opportunity of welcoming the return of Hong Kong in 1997 and celebrating the 50th anniversary of the National Day in 1999. Combined with urban transformation and urban rectification, urban landscape lighting was planned for some key scenic spots and major buildings.
(4) Rapid development stage from 2000 to 2007
After entering the new century, the speed of urbanization in China has been accelerating, which has led to the continuous increase in the demand for urban lighting projects. At the same time, with the improvement of people's living standards, the landscape lighting of various provinces and cities has also increased investment. In this process, the applied lamps are mainly high-pressure sodium lamps and floodlights, which have high energy consumption and serious light pollution.
(5) The stage of sustainable development from 2008 to the present
The guiding ideology of lighting engineering construction at this stage is scientific development, dealing with the relationship between functional lighting and landscape lighting, day and night scenes, lighting construction and environmental protection and energy conservation, so that the lighting project construction can achieve sustainable development. Since 2007, with the advancement of technology, LED lighting efficiency has increased, and cost has decreased. LED lighting products have also become the main materials of the industry. The application and promotion of LEDs have solved problems such as energy conservation and environmental protection, and light pollution has been controlled, which has effectively promoted the sustainable development of lighting engineering construction. At the same time, people's requirements for urban night environmental quality and landscape level have been further improved. The enthusiasm for landscape lighting construction across the country has gradually warmed up, showing a "blowout" status.
Table 2: History of urban lighting engineering in China
Source: “China's Urban Lighting Development and Lighting Energy Saving Countermeasures†(Xiao Huigan, Zhao Jianping, Institute of Building Physics, China Academy of Building Research), GF Securities Development Research Center
Industry Status and Trends: Accelerated Integration of Mergers and Acquisitions
The project is based on EPC and supplemented by PPP+EMC.
1. Low concentration of industry, fierce competition, accelerated mergers and acquisitions
According to the data of the national construction market supervision public service platform, as of May 2018, the whole industry has 450 enterprises with the qualification of “Classification of Urban and Road Lighting Professionalsâ€, and more than 3,000 enterprises with second-level and third-level qualifications, lighting engineering. The industry has low concentration and fierce competition. It has not yet formed a national leading enterprise. However, a number of well-developed and large-scale enterprises have emerged in some areas. Through mergers and acquisitions and industrial integration, advantageous enterprises are constantly establishing their leading edge and pursuing. Leading position.
Table 3: List of mergers and acquisitions of industry-advantaged companies in recent years 
Source: Company Announcement, GF Securities Development Research Center
2. Construction + design double-level qualification is less, and the business advantage is large
The Ministry of Housing and Urban-Rural Development is the competent department of the lighting engineering industry in China, which conducts qualification management, policy formulation and industrial planning for the industry. According to the data of the national construction market supervision public service platform, as of May 2018, there were 450 enterprises in the industry with the qualification of “Classification of Urban and Road Lighting Professional Contracting Levelâ€, which was issued by the Provincial Housing and Urban Construction Bureau. There are a large number of enterprises; there are 54 enterprises holding the qualification of “Special Grade A for Lighting Engineering Designâ€. This qualification is issued by the Ministry of Housing and Urban-Rural Development. The threshold is relatively high and the number is relatively scarce. At the same time, there are 49 enterprises with the above two qualifications. At present, the landscape lighting engineering enterprises with large scale and leading technology in China are mainly concentrated in first-tier cities such as Beijing, Shanghai and Shenzhen, as well as developed regions such as Jiangsu and Zhejiang. The regional market characteristics are obvious.
The double-a qualification is the guarantee of the design level and technical construction strength of the lighting engineering enterprise. The holding of the double-a-side qualifications will lead to the enterprise business contract, the project won the bid, and the project scale will have a greater additive effect.
Table 4: List of Double A Qualified Enterprises 
Source: National Construction Market Supervision Public Service Platform, GF Securities Development Research Center
Figure 3: Regional distribution of double-qualified enterprises
Source: National Construction Market Supervision Public Service Platform, GF Securities Development Research Center
3. The project scale is getting bigger and bigger, mainly based on EPC mode, and PPP and EPC models are trying to be promoted.
The EPC mode is the most common mode of operation for lighting projects. With the concept of beautiful China, new urbanization, and smart city, local governments have paid more and more attention to lighting projects, especially landscape lighting. Therefore, PPP and EMC models are gradually linked to lighting projects. At the same time, the scale of landscape lighting projects in recent years has shown an increasing trend. Taking the key enterprises of the industry, such as the famous companies and Alto Electronics, as an example, the volume of orders for enterprises has been increasing.
Since the rise of PPP, more and more lighting engineering companies have participated. At present, most of the domestic LED landscape lighting projects use the PPP mode to operate. Among the PPP demonstration projects issued by the Ministry of Finance, there are several projects involving urban public lighting, landscape renovation of scenic spots and construction of smart cities. And engineering projects such as smart street lamps are mostly promoted by EMC. EMC (Contracted Energy Management) is an energy-saving investment service management mechanism. The main operation mode is that the company signs an agreement with the energy-using party (light management department, etc.) to provide LED lighting and related products, and provide transformation, maintenance and maintenance. A certain amount of electricity and maintenance fees will be charged within the agreed time after the completion of the project. In the process of EPC-based and PPP+EMC superimposed advancement, the lighting engineering industry is steadily advancing in the operating mode.
Table 5: List of winning bids and signing contracts after the listing of Masters
Source: Company Announcement, GF Securities Development Research Center
Table 6: Alto Electronics and its subsidiary Qianbaihui won the bid and contracted projects in recent years
Source: Company Announcement, GF Securities Development Research Center
4. Industry barriers: Qualification, design, management, capital, brand and other factors to build industry walls
The lighting engineering industry, especially the landscape lighting industry integrating art and engineering, has many barriers, and has high requirements for the company's qualification, design, brand, capital, management and other factors.
(1) Qualification barriers: China has strict access standards for enterprises engaged in urban lighting engineering design and engineering construction, and enterprises with different qualification levels are engaged in corresponding grade projects.
(2) Design barriers: Lighting engineering design has high diversity and complexity, and needs to give landscape lighting culture and artistic connotation, which in turn requires designers to have rich artistic humanities and design cultivation, which constitutes industry design barriers.
(3) Management barriers: Lighting projects are generally large in scale, requiring enterprises to maintain coherent operations in project acceptance, engineering design, lighting selection, construction and construction, etc. Therefore, good project management level is also very important, which is the basic barrier of the industry.
(4) Capital barriers: Enterprises undertake large-scale lighting projects, and the amount of funds required for design, construction and engineering materials is huge, so funds are also barriers that the industry cannot circumvent.
(5) Brand barriers: In the bidding of large-scale landscape lighting projects, the company's scale performance, past project accumulation experience and industry reputation are the key to stand out from the competition, especially the current lighting projects are mainly government tenders, the company's brand The project experience is highly valued by the government. Therefore, the brand established over the years is an important factor that has gained a favorable position in the industry competition, and gradually formed brand barriers.
Figure 4: List of lighting engineering industry barriers
Source: China Industry Information Network, GF Securities Development Research Center
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