E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays, yesterday said that it expects revenue to rise mildly this quarter from last quarter — bucking a downturn in the electronics industry — as the COVID-19 pandemic continues to drive demand for e-readers, e-notes and electronic shelf labels (ESL).
E Ink’s revenue for last quarter surged 22 percent to NT$4.45 billion (US$154.42 million) from NT$3.66 billion in the same period last year.
“The fourth quarter looks strong. That is primarily because of strong demand for e-paper displays, used e-readers and ESL, as well as new applications like e-notes and signs,” E Ink chairman Johnson Lee (李政昊) told investors in an online conference.
Photo: Chiu Shu-yu, Taipei Times
Demand for ESL has surpassed the company’s expectations this year, Lee said.
The Hsinchu-based company said that the estimated revenue growth would also be fueled by demand for e-readers with color displays or bigger screens, such as 10-inch models, or models equipped with a stylus.
Retailers in Portugal and India are joining their global peers in adopting ESL to boost operational efficiency and cope with labor shortages amid pandemic-driven lockdowns, E Ink said.
The global ESL penetration rate is 5 percent, indicating an ample room for growth, it said.
Visibility for the first half of next year is good, Lee said.
The firm said that it is “relatively bullish” about demand for next year and beyond.
To cope with strong demand, E Ink is accelerating capacity expansion and next year plans to invest NT$800 million to NT$1 billion in new manufacturing equipment in Hsinchu and Boston.
Capital expenditure this year might rise to NT$1 billion, higher than NT$600 million to NT$800 million over the past few years, it said.
In the July-to-September quarter, net profit shrank 28 percent to NT$824 million from NT$1.15 billion a year earlier, mostly due to an unrealized asset impairment loss of NT$100 million amid volatile foreign exchange rates, it said.
Operating income soared 190 percent to NT$822 million from NT$284 million a year earlier, the highest in nine years, it said.
The company reported gross margin of 48.2 percent for last quarter, a record.
E Ink financial executive Lloyd Chen (陳樂群) attributed the results to the effects of remote working and online learning amid the pandemic.
In the first three quarters, net profit expanded 5 percent to NT$2.59 billion, compared with NT$2.47 billion in the same period last year, or a rise on earnings per share to NT$2.28 from NT$2.18.
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