SoluM Reports Strong Q1 Performance... "Better in the Second Half"

[Asia Economy Reporter Jang Hyowon] SoluM announced that it recorded its highest quarterly performance since its founding in the first quarter of this year. The market expects SoluM to deliver even better results as the second half of the year progresses.

On the 14th, SoluM disclosed that its consolidated sales and operating profit for the first quarter of this year increased by 29.1% and 19.6% year-on-year, reaching 234.3 billion KRW and 12.3 billion KRW, respectively. Net profit rose by 43.5% year-on-year to 11.5 billion KRW. Sales, operating profit, and net profit all marked the highest first-quarter results since the company's establishment.

By segment, sales in the Electronic Shelf Label (ESL) division grew 91.7% year-on-year to 33.6 billion KRW. As of the first quarter, the total number of ESL customers reached 187, representing an increase of over 87% compared to the previous year. This growth was driven by the base effect from the resumption of operations at the Chinese factory, which had been shut down due to COVID-19.

Additionally, sales in the TV core components segment, including power boards, video boards, and tuner integration (3in1 Board), achieved 101.1 billion KRW, up 63.8% year-on-year, as Samsung Electronics increased its product adoption rate from 25% to 30%.

Hana Financial Investment forecasts that total sales in the ESL division for this year will increase by 118.4% year-on-year to 282.8 billion KRW. Although this is a slight downward revision from earlier estimates, the margin is expected to continue growing since the ESL division already surpassed the break-even point (BEP) sales scale last year. The ESL operating profit margin was around 3% last year but rose to 10% in the first quarter of this year.

Choi Jaeho, a researcher at Hana Financial Investment, stated, “Second-half performance this year is expected to reach sales of 799.2 billion KRW and operating profit of 60.5 billion KRW, increasing 28.2% and 84.9% year-on-year, respectively.” He added, “Especially with accelerated vaccine distribution in North America and Europe, which account for about 80% of ESL sales, sales are expected to grow rapidly as business operations normalize in major export countries.”

Researcher Choi also explained, “The third quarter is the peak season for TV home appliance demand,” adding, “From the second quarter, when orders for the 3in1 Board, a core TV component, begin, additional growth in the second half is expected due to seasonal demand increases.”

This content was produced with the assistance of AI translation services.