Mulinsen (Chinese: 木林森), one of China’s larger LED lighting groups, warned it will report a deep annual loss for 2025 as weak European demand and a costly channel transformation hit sales and margins. The company said net profit attributable to shareholders will be between -15 billion and -11 billion yuan (about -$210m to -$155m), marking the first full-year loss since its 2015 listing and the sharpest downturn in its history.
The group attributed the decline to a double squeeze: falling orders from key overseas markets, especially Europe, and higher operating costs tied to an accelerated overhaul of distribution channels intended to sharpen its competitive position. Mulinsen also took a conservative accounting posture, booking impairment provisions against goodwill and inventory after a broad-based industry slump and volatile product prices eroded gross margins.
Amid the pain, Mulinsen announced a 900 million yuan (RMB) acquisition for a further 34.7849% stake in Purui Optoelectronics (普瑞光电), via its subsidiary LEDVANCE GmbH. Combined with previous holdings, the deal would lift Mulinsen’s and LEDVANCE’s ownership to 67.894% and fold Purui into Mulinsen’s consolidated accounts, a move the company framed as strategic vertical integration to secure LED chip design and manufacturing capabilities.
Purui, founded in 2011, is known for advanced flip-chip and high-power COB (chip-on-board) packaging technologies and reported roughly 1.58 billion yuan in revenue and just 42.8 million yuan in net profit through September 30, 2025. Those numbers underline why the acquisition is unlikely to reverse Mulinsen’s near-term results: Purui’s profits are modest relative to the scale of Mulinsen’s expected loss, and the benefits of upstream control will take time to materialize.
The deal should be read against a wider industry reset. Since mid-2025 China’s LED industry has enacted coordinated price adjustments across the entire value chain — from chips to packaging to finished lighting — as companies respond to rising raw-material costs (gold, silver, copper) and seek to correct a multi-year trend of relentless price erosion. Average LED product prices fell 30–40% over the previous four years, compressing margins and forcing producers to restructure pricing and supply strategies.
For Mulinsen, the gamble is clear: vertical integration could secure component supply, protect margins when prices stabilize, and shore up a globalized supply chain. Yet the trade-off is acute. Acquisitions and channel reconfiguration raise near-term cash burn and operational complexity precisely as demand softens in key export markets. The company’s large one-off impairment charges also raise the specter of further balance-sheet stress if market conditions deteriorate.
Investors and competitors will watch whether price increases across the LED chain sustain and translate into improved profitability, or whether higher prices will further suppress end-market demand — particularly in Europe, where construction and commercial lighting orders have weakened. In an industry pushed toward consolidation, Mulinsen’s move is a defensive vertical integration play and a signal that Chinese lighting groups are willing to pay for upstream capability even as short-term earnings slip.
Ultimately, Mulinsen’s 2025 results crystallize a broader inflection point for LED makers: survive the cyclical downturn and you may emerge with stronger, integrated supply chains and pricing power; fail to manage costs and impairments and the industry will likely see accelerated consolidation and margin polarization.