LED industry and hence better quality products

Many small LED lighting companies are suffering and may not see light at the end of the tunnel," said Wei Li, board secretary of Dongguan Kingsun Optoelectronic Co Ltd (002638.SZ), a leading Chinese LED street lighting manufacturer.

"There won't be so many enterprises five to 10 years from now," she told by phone from the firm's headquarters in the city of Dongguan in southern Guangdong province, an LED manufacturing centre.

Industry consolidation may temporarily disrupt the LED high bay light chain given 60 to 70 percent of China's capacity is built for exports, analysts say. But in the long run, the shakeout should lead to a healthier Chinese LED industry and hence better quality products.

Shares of the more than two dozen Chinese LED players listed in China and Hong Kong, some of which attracted private equity investment before their listings, have tumbled as their profits evaporated. Ledman Optoelectronic Co Ltd (300162.SZ) is down 48 percent from a March peak, and Shenzhen Unilumin Group Co Ltd 300232.SZ has lost 37 percent.