E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays, yesterday said that it plans to double its capital expenditure to NT$1.6 billion (US$56.53 million) to expand capacity and catch up with customer demand.
E Ink is building four new production lines in Hsinchu to accelerate its expansion amid significant demand, as retailers have fewer employees due to the COVID-19 pandemic and are seeking the convenience of electronic shelf labels to adjust prices.
This year, the company expects to add new clients from retail areas in Europe and the US.
Photo: Chen Mei-ying, Taipei Times
The Hsinchu-based company last year spent between NT$750 million and NT$800 million on new facilities and manufacturing equipment.
“Order visibility is quite clear. For the whole of this year, we can grow our revenue,” company chief financial officer Lloyd Chen (陳樂群) told a virtual investors’ conference yesterday. “We are not worried about demand... Our capacity is fully booked.”
The company reported that revenue in the first two months of this year surged 77.18 percent to NT$2.92 billion from last year.
On an annual basis, the growth momentum behind electronic shelf labels is expected to increase the company’s revenue in the first two quarters of this year, Chen said.
The launch of E Ink’s new-generation color technology, Kaleido Plus, is driving growth in replacement demand for bigger e-readers and e-notes, he said.
Chen said that the work-from-home and distance-learning trends are stimulating e-reader and e-note demand.
China’s Onyx International Inc (文石) and Europe’s PocketBook International SA have rolled out new e-notes with a stylus and a 7.8-inch color display using E Ink’s Kaleido Plus technology.
However, revenue growth is contingent on the speed of the company’s capacity expansion and the availability of key components, such as display drive ICs, Chen said.
The chip shortage would only have a negligible effect on shipments this quarter, he said.
The company reported that net profit last year rose 16.88 percent to NT$3.6 billion from NT$3.08 billion in 2019, or an increase in earnings per share to NT$3.18 from NT$2.72, while operating profit surged 230 percent to NT$1.85 billion from NT$559.81 million.
Last year’s operating profit approached royalty income (NT$1.89 billion), indicating that E Ink no longer needs to depend on royalties for growth.
E Ink expects royalty income to be stable this year, after sliding 15 percent annually last year.
Gross margin last year improved to 45.7 percent from 44.41 percent, while revenue expanded 13 percent to NT$15.36 billion from NT$13.6 billion.
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