E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and electronic shelf labels, yesterday gave a positive outlook for the second half of this year, as the COVID-19 pandemic is stimulating demand.
The Hsinchu-based company said that the pandemic is accelerating adoption of its labels as retailers seek to avoid virus transmission routes, as well as enhancing delivery efficiency.
The pandemic “is increasing demand, as we expected,” E Ink chairman Johnson Lee (李政昊) told an investors’ teleconference. “Because of the pandemic, there has been an increase in the number of retailers asking about how labels would help them improve delivery efficiency.”
Photo: Chen Mei-ying, Taipei Times
In the first two quarters, e-paper shipments for labels reached what it shipped for the whole of last year, Lee said.
“We are bullish about the label business,” he said.
Shipments of e-paper displays are expected to grow at an annual rate of 20 to 30 percent this year and growth might be even stronger next year, E Ink said.
A mere 4 percent of the world’s retailers have replaced paper labels with electronic ones, so there is ample room for growth, the company said.
Demand for e-readers is also improving this quarter from a slump in the first half due to seasonal factors as well as the work-from-home and remote learning trends, it said.
Demand for E Ink’s new color e-paper displays, dubbed Kaleido, has also improved and the firm is boosting capacity 10-fold, it said.
Kaleido displays are primarily for e-books or e-reader, targeting the education market, E Ink said.
China is the first market it entered, it said.
E-paper displays for e-readers accounts for 60 percent of the firm’s revenue, it said.
E Ink chief financial officer Lloyd Chen (陳樂群) said that the company is investing in low-risk financial products to offset a decline in royalty income.
Non-operating income, which is mostly from royalties, would be flat this year from last year, Chen said.
E Ink’s investment strategy has proven to be workable as its non-operating profit only dipped 7 percent year-over-year to NT$1.58 billion (US$53.54 million) in the first half, while royalty income shrank about 17 percent to NT$948 million.
In the first half, E Ink’s net profit soared 33 percent to NT$1.76 billion from NT$1.32 billion a year earlier. Earnings per share rose to NT$1.55 from NT$1.16 over the same period.
Gross margin climbed to 44.1 percent in the first two quarters from 41.9 percent in the same period last year.
Revenue inched up 2 percent to NT$6.65 billion from NT$6.51 billion a year earlier.
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