Sat, Jun 01, 2019 - Page 12 News List

E Ink cuts shipments growth forecast

DELAYED INSTALLATIONS:E Ink president Johnson Lee said retailers are sensitive about macroeconomic effects, while the overall economy is destined to weaken

By Lisa Wang  /  Staff reporter

E-paper display supplier E Ink Holdings Inc (元太科技) yesterday cut its growth forecast for its electronics shelf label (ESL) shipments this year to between 20 percent and 30 percent, as some Chinese retailers are pushing back introduction of ESL amid a US-China trade dispute and a staggering macroeconomy.

“There will be no explosive growth” in ESL shipments this year on an annual basis as the company has projected internally, E Ink president Johnson Lee (李政昊) told an investors’ teleconference.

“Retailers tend to be sensitive about the ups and downs of the macroeconomy. The overall economy is destined to weaken” under the influence of the trade dispute, Lee said.

“We found that retailers in China are delaying installations of ESL,” he said. “Consumer electronics purchases are not as good as before.”

However, retailers are tending toward favoring digital shelf labels over paper that allow real-time price adjustments, Lee said.

This year, retailers from North America, Japan and Europe are joining Asian peers in the shift to adopting digital technologies like ESL and the Internet of Things to optimize the retail workflow, E Ink said.

Japanese electronics retailer Bic Camera, US membership-only retail warehouse Sam’s Club and French retailer Carrefour are among those to have recently adopted its ESL products, E Ink said.

E Ink maintains its view that this year would see revenue improve, but the rate would fall behind its ambitious target, Lee said, citing the US-China trade dispute and its effect on world economic growth and consumer consumption.

The Hsinchu-based company has ESL as its second growth driver, as its core e-reader business is expected to stagnate before its full-color e-paper displays become commercial, E Ink said.

Robust demand for ESL in the first quarter helped lift gross margin to 42.4 percent, compared with 38.3 percent in the same period last year, E Ink said. Revenue rose 2 percent to NT$2.96 billion (US$93.64 million) last quarter from the same period last year.

Net profits increased to NT$438 million in the quarter ended March 31 from NT$41 million a year earlier, while operating losses were NT$107 million from NT$264 million in the first quarter last year.

Royalty income, an important pillar of E Ink’s income, rose 0.6 percent to NT$449 million last quarter from NT$446 million a year earlier.

Royalty income is expected to fall by a single-digit percentage year-on-year this year, with the decline to extend into the next two or three years, as smartphone makers are moving from traditional LCD panels to better-definition organic light-emitting diode (OLED) panels, Lee said.

This story has been viewed 1872 times.

Comments will be moderated. Keep comments relevant to the article. Remarks containing abusive and obscene language, personal attacks of any kind or promotion will be removed and the user banned. Final decision will be at the discretion of the Taipei Times.

TOP top