[Post-IPO] SupremaID, Once Gloomy Due to Export Barriers, Achieves Successful Earnings Rebound

[Asia Economy Reporter Yoo Hyun-seok] Suprema ID has emerged from two years of decline. Although its performance suffered due to export restrictions caused by COVID-19, improvements in overseas sales networks and new product development have led to better results.

Suprema ID was established in 2017 through a physical division from Suprema HQ. It is a specialized company in biometric ID and integrated security solutions. The company independently develops, manufactures, and sells various devices and solutions essential for registering and authenticating biometric information.

At the time of its IPO, Suprema ID's desired public offering price was between 23,000 and 27,000 KRW. The demand forecast recorded a competition rate of 1,124.05 to 1. It raised a total of 23.3 billion KRW, securing a net amount of 17.4 billion KRW after deducting issuance costs.

Specifically, 10.8 billion KRW was planned to be used as facility funds for establishing an affiliated research institute and overseas subsidiaries. Additionally, 5.5 billion KRW was allocated for research and development of biometric solutions and new digital security products, and 1.1 billion KRW was designated for marketing and system construction as operating funds.

However, Suprema ID only spent 400 million KRW on facility funds, 600 million KRW on R&D, and 1.1 billion KRW on operating funds, totaling 2.1 billion KRW. The remaining 15.3 billion KRW was deposited in financial products such as bank time deposits. A company official stated, "Due to strict location conditions, instead of purchasing space, we established the affiliated research institute by renting a knowledge industry center to reduce costs," adding, "We are currently investing significantly in equipment and hiring personnel." The official also mentioned, "The establishment of overseas subsidiaries was delayed due to COVID-19, but as the situation improves, we are exploring various options."

Suprema ID entered the KOSDAQ market in August 2019 but experienced negative growth initially. In 2018, it recorded consolidated sales of 18.1 billion KRW and operating profit of 5.2 billion KRW. However, in 2019, sales dropped to 12.1 billion KRW and operating profit to 500 million KRW, decreases of 33.20% and 91.17% respectively compared to the previous year. Last year, sales were 8.4 billion KRW with an operating loss of 100 million KRW, marking a 30.60% decrease in sales and a shift to operating loss.

The biggest reason was export restrictions due to COVID-19. As of last year, exports accounted for 85.61% of total sales. A company representative said, "Most sales occur overseas, and we conduct sales targeting public institutions through business trips," adding, "Last year, it was difficult to travel abroad, and some public institutions were closed, which made things challenging."

This year showed a different trend. As of the third quarter cumulative basis, sales reached 10.1 billion KRW, a 73.38% increase compared to the same period last year. Operating profit turned positive, recording 2 billion KRW.

Growth in fingerprint registration devices was significant. As of the third quarter last year, sales of the fingerprint registration device 'RS-G10' were 3.2 billion KRW, increasing to 5.3 billion KRW this year. Sales of the fingerprint authentication device 'BM-Slim2' also rose from 900 million KRW to 1.5 billion KRW. Additionally, sales of other products mostly increased.

In particular, the company explained that the previously blocked export routes have somewhat improved. A company official said, "Last year, we improved domestic and overseas sales networks," explaining, "Domestically, we focused on new product development through R&D and conducted sales overseas through agents, which led to improved performance."

Performance growth is expected to continue next year. The areas that were reorganized last year are showing results, and sales are expanding into new markets. Suprema ID announced on the 6th that it signed a contract to supply fingerprint registration solutions for electronic passport issuance with IN Group of France. The contract is worth 1 billion KRW, accounting for 11.6% of last year's sales. IN Group is a digital security and ICT company affiliated with the French government.

A company representative said, "The selection and concentration we did last year helped this year," adding, "We expect sales in the fourth quarter to meet the company's forecasts." The official emphasized, "Next year, we plan to expand into Europe and Africa, and we expect positive growth."

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