E Ink Holdings Inc’s (元太科技) stock yesterday soared 6.17 percent after the company reported better-than-expected margins amid growing demand for e-paper-displays for e-readers and electronic shelf labels.
Gross margin climbed to 40 percent during the quarter ending June 30, beating the company’s forecast of 35 percent and its first-quarter margin of 38.72 percent, according to the company’s filing with the Taiwan Stock Exchange on Monday.
E Ink’s share price yesterday closed at NT$33.55, outpacing the Taipei Exchange, which rose 1.35 percent.
The world’s biggest e-paper display supplier saw second-quarter net profit grow more than fivefold to NT$798 million (US$26.32 million) from NT$157 million in the first quarter, thanks to a spike in royalty income, which more than doubled to NT$871 million from NT$411 million.
Earnings per share jumped to NT$0.71 from NT$0.14 in the prior quarter.
On an annual basis, net profit increased 2.3 percent from NT$780 million, or earnings per share of NT$0.68, with royalty income amounting to NT$787 million.
Revenue increased about 15 percent quarter-on-quarter and 2.79 percent year-on-year to NT$3.69 billion.
E Ink said in May that revenue contribution from low-margin LCD panels would shrink to a very minimal number or near zero in the second half of the year from 3 percent in the first quarter, following the disposal of equipment and facilities from its South Korean LCD manufacturing subsidiary, Hydis Technologies Co.
The asset disposal was wrapped up on Tuesday last week for 30 billion won (US$26.43 million).
Higher-margin e-paper displays for e-readers and electronic shelf labels are the company’s major revenue sources.
E Ink said in March that shipments of e-paper display for electronic shelf labels would grow 20 percent year-on-year in the first half of this year, as Asian and US retailers are joining their European peers in substituting paper shelf labels with electronic labels.
Electronic shelf labels accounted for 17 percent of sales in the first quarter.
E Ink is scheduled to release its financial results on Thursday next week.
E Ink also said in March that it is adding new customers from China for its e-paper displays to join existing clients such as Amazon.com Inc and Rakuten Kobo Inc.
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