[Post IPO] Sindogiyeon Faces Export Blockade Due to COVID-19... New Business 'Anticipated'

[Asia Economy Reporter Hyunseok Yoo] Display equipment company Sindogiyeon experienced a decline in performance as investments from upstream companies were delayed due to COVID-19. The company plans to recover sales through new businesses.

Sindogiyeon was established in 2000. It is a company that develops and manufactures post-processing equipment for liquid crystal displays (LCD) and organic light-emitting diodes (OLED). It produces equipment that laminates panels and various components in the post-processing stage of display panel manufacturing, as well as defoaming equipment that removes microbubbles.

In 2008, the company developed a vacuum laminator that laminates under uniform pressure in a vacuum chamber. Compared to roller laminators that apply pressure to films by rollers passing over substrates, vacuum laminators have fewer material restrictions and minimize bubble inclusion. Additionally, Sindogiyeon developed membrane electrode assembly (MEA) lamination equipment that moves hydrogen ions in the hydrogen fuel cell field.

When Sindogiyeon was listed on the KOSDAQ market in 2020, the desired public offering price was ?14,000 to ?16,000. The final offering price was set at ?16,000, and the subscription competition rate reached 955 to 1, reflecting high expectations.

However, contrary to expectations, performance sharply declined from the first year of listing. In 2020, sales were ?41.6 billion with an operating loss of ?3 billion, with sales dropping by more than half and operating profit turning negative. The cumulative sales for the third quarter of this year were ?21 billion with an operating loss of ?1.7 billion. Compared to the same period last year, sales decreased by 29.62%, and the operating loss widened. On a consolidated basis, sales were ?48.9 billion with an operating profit of ?2 billion in 2018, but surged to ?84.8 billion in sales and ?16.9 billion in operating profit in 2019, just before listing.

The biggest reason for the sharp decline in performance was a decrease in exports. Sindogiyeon's major customers are the four major Chinese panel companies: BOE, Tianma, Visionox, and CSOT.

In 2018, Sindogiyeon's export amount was ?48.1 billion, accounting for 98.1% of total sales, and in 2019, exports were ?79.6 billion, making up 93.87%, showing that exports accounted for a large portion of overall performance.

However, last year exports dropped to ?36.1 billion, and the cumulative exports for the third quarter of this year were ?15 billion, a 56.18% decrease compared to ?26.7 billion in the same period last year, showing a continuous decline in export amounts.

A company official said, "Since sales in China account for a high proportion, and COVID-19 started before the listing two years ago, operating rates fell and investments were delayed, leading to deteriorated performance," adding, "The situation is similar domestically."

However, the company expects the situation to improve next year. The official explained, "We expect things to get better after this year," and "Next year, we will strive to increase sales to domestic display companies."

Along with this, new businesses are also anticipated. Sindogiyeon developed the 'Vaccum Press,' MEA lamination equipment that moves hydrogen ions. It also produced equipment for the manufacturing process of vacuum glass used in buildings for eco-friendly business purposes.

A company representative emphasized, "For the new hydrogen fuel cell business, pilot equipment has been delivered, and we are currently monitoring the situation," adding, "Next year, we are working to generate 50% of total sales from new businesses."

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