[Biz Leader] Baek Young-hyun, CEO of CU Tech, "We Will Build a Continuously Growing Company Through Listing"

Baek Young-hyun, CEO of CU Tech
Photo by CU Tech

[Asia Economy Reporter Hyunseok Yoo] "We will expand our business areas to electric vehicles, batteries, and more to become a company that can sustain continuous growth."

Baek Young-hyun, CEO of CU Tech (photo), stated in an interview with Asia Economy at the Pyeongtaek headquarters, "We plan to expand our production facilities in Vietnam using the funds raised from the KOSDAQ IPO."

CU Tech is a surface mount technology (SMT) specialist company primarily engaged in flexible printed circuit assembly (FPCA) used in organic light-emitting diode (OLED) panels. It was established in 2004 and counts Samsung Display among its major clients.

Performance has varied by year. On a consolidated basis, in 2019, the company recorded sales of 322.2 billion KRW and operating profit of 23.6 billion KRW. Last year, sales and operating profit were 221.7 billion KRW and 16 billion KRW respectively, down 31% and 32% year-on-year. The decline was influenced by the COVID-19 pandemic and reduced smartphone sales by clients.

This year, the company is showing signs of recovery. In the first half of this year, sales reached 123.9 billion KRW with an operating profit of 9.2 billion KRW, up 6.34% and 8.90% respectively compared to the same period last year. The outlook for the second half is also positive. CEO Baek said, "Performance has been improving since the fourth quarter of last year," adding, "As smartphone manufacturers are adopting OLED more than LCD, the second half results should be good." He also noted, "OLED has higher profitability."

CEO Baek emphasizes the company's greatest strength is its ability to respond flexibly to customer needs. CU Tech's main client is Samsung Display, where it ranks first or second in market share in the SMT sector. He said, "In this field, demand volatility is very high, but if the customer needs 100 units, we are ready to supply about 110 units immediately," adding, "Moreover, our factories are located within 1 to 1.5 hours from the customer, which gives us an advantage in communication and delivery capabilities."

CU Tech is currently undergoing an initial public offering (IPO). The desired offering price is between 5,100 and 5,600 KRW. Applying the lower end of the price range would raise approximately 17.7 billion KRW. The company plans to use the secured funds along with its own cash reserves of 4 billion KRW to expand its Vietnam factory. CEO Baek explained, "We are currently utilizing about half of the total site in the Vietnam factory," and added, "We plan to expand by an amount equal to the existing production line, which we expect will increase sales by more than 30% once operational."

Electric vehicles, batteries, and automotive OLED are being developed as new growth engines. He said, "Previously, we focused only on smartphones, but recently we started supplying OLED for laptops," and emphasized, "Regarding the automotive camera module business, we expect significant sales to begin as early as the end of this year."

CU Tech's largest shareholder is the Japanese comprehensive IT trading company Restar Holdings (RESTAR HOLDINGS, formerly UKC Holdings), which held 100% of the shares as of last year. Despite the recent strained Korea-Japan relations, the IPO process is proceeding. He explained, "I felt that the IPO was essential for us to grow independently without relying on the largest shareholder, so I persuaded them," adding, "Although Korea-Japan relations are tense, the largest shareholder supports this decision, recognizing the need for close economic cooperation."

CEO Baek emphasized that the KOSDAQ listing will help the company gain investors' trust and grow. He said, "We will continue to grow so that we can share the profits with our shareholders," and added, "We will operate the company transparently and strive to instill pride in our employees."

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