[Post-IPO] Raon People, Emerging from COVID-19 Contraction?

[Asia Economy Reporter Yoo Hyun-seok] Raon People is showing signs of emerging from the recession caused by COVID-19. Although its performance suffered last year due to halted overseas business, orders are increasing again this year, signaling a rebound in results.

Raon People is a machine vision specialized company established in 2010. Since 2015, it has been conducting research on artificial intelligence (AI)-based machine vision software. In 2017, it launched new products. Based on video analysis technology and high-speed interface technology, it operates businesses in camera module inspection equipment and machine vision software.

It entered the KOSDAQ market in 2019. At the time of its initial public offering (IPO), Raon People's desired public offering price was between 14,000 and 17,000 KRW. The finalized offering price was 14,000 KRW, raising a total of 28.5 billion KRW. The raised funds were planned to be used by 2022. Among these, 10.7 billion KRW was allocated for purchasing and constructing corporate research centers and factory sites. Additionally, 3.6 billion KRW each was designated for research and development (R&D) and overseas business, and 5.3 billion KRW each for new business and operating funds.

Only a portion of the funds secured through the public offering has actually been used. According to last year's business report, 3.6 billion KRW was spent on R&D, 1 billion KRW on overseas business, 3.3 billion KRW on new business, and 700 million KRW on issuance expenses, totaling 8.6 billion KRW utilized. Approximately 20 billion KRW has yet to be invested. The company stated that the remaining funds are currently held in time deposits and will be explained through disclosures or business reports when used.

Raon People inevitably experienced a downturn last year due to COVID-19. Sales increased from 21.8 billion KRW in 2018 to 30.8 billion KRW in 2019 but halved to 15 billion KRW last year. Operating profit rose from 6.2 billion KRW to 8.2 billion KRW during the same period but turned into a 4.6 billion KRW loss last year.

A Raon People official explained, "Last year, when we were gearing up for global market expansion, the special situation caused by COVID-19 delayed the establishment of overseas subsidiaries and made exchanges such as sales and exhibitions difficult, directly impacting exports and imports. The prolonged pandemic led to reduced private consumption, decreased investments by clients, production cuts, and cost reductions, resulting in continuous sales decline."

Performance has been recovering this year. Sales in the first half reached 9.4 billion KRW, a 23.30% increase compared to the same period last year. However, operating losses remained at 2.8 billion KRW, similar to last year. Specifically, AI machine vision solutions recorded sales of 5.6 billion KRW, accounting for 59.39% of the total. This was followed by golf sensors at 2.4 billion KRW (25.29%) and camera module inspection solutions at 1.4 billion KRW (15.32%). A company representative said, "Nearly half of the sales revenue was spent on R&D. Additionally, costs increased as we continued to hire employees."

With an increasing order backlog, the company expects improved performance in the second half. As of the first half of this year, total orders amounted to 15.1 billion KRW, with an order backlog of 5.8 billion KRW. In the same period last year, orders were 9.4 billion KRW, and the backlog was 1.8 billion KRW. Furthermore, contracts were consecutively signed, including a 2.1 billion KRW AI traffic data construction project in July and a 2.2 billion KRW AI traffic solution supply contract last month.

Meanwhile, Raon People's solutions are being applied to various new businesses such as automobile exterior inspection, PCB inspection equipment, wafer inspection, and data platform projects, aiming to boost sales in the second half. The official emphasized, "We have started various sales activities to resume direct transactions, exports, and business by establishing a U.S. subsidiary and a China branch last year and this year. Our strategy is to focus on the AI vision inspection business, which was our existing cash cow, and Kakao golf sensors to increase sales volume."

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