Dongyang Networks to Acquire Camera Module Company and Pursue Physical Division... "Enhancing External Growth and Profitability"

[Asia Economy Reporter Yoo Hyun-seok] Dongyang Networks is securing future growth engines through the physical division of its IT business and the acquisition of a smartphone camera module company.

Dongyang Networks announced on the 19th that it will actively enter the smartphone camera module business to secure new growth drivers.

Dongyang Networks signed a memorandum of understanding (MOU) for a merger and acquisition with a related company at the end of last year aiming to enter the camera module market, and is currently conducting due diligence through the execution of a due diligence deposit in January. The company plans to complete the due diligence by March and secure the largest shareholder status of the camera module company by acquiring additional shares by the end of March.

The camera module core parts manufacturer currently under acquisition has already secured global smartphone manufacturers as customers. Despite the stagnation in the smartphone market growth, the smartphone camera module market is rapidly growing due to the adoption of multi-cameras and higher specifications. According to the company, the market is expected to continue stable growth due to changes in form factors and camera module paradigms by smartphone manufacturers such as Samsung Electronics.

Additionally, Dongyang Networks plans to maximize management efficiency through the physical division of its existing IT business. By March, it will complete the procedures related to the physical division of the IT business and new business promotion, and change its company name to ‘T tops’. Centered on the parent company T tops, the IT business will be handled by the newly established subsidiary (Dongyang Networks) created through the division, and new businesses will be promoted by the manufacturing subsidiary, forming a ‘two-subsidiary system’ business portfolio.

Kim Bong-gyeom, CEO of Dongyang Networks, said, “March is expected to be an important turning point for Dongyang Networks,” adding, “We have determined that the sustainability and growth potential of the company cannot be guaranteed by the IT service business alone, so we are promoting a business portfolio that includes smartphone camera module manufacturing, a profitable non-IT sector.”

He continued, “The acquisition of the camera module company and the physical division of the IT business are expected to be the foundation for new business expansion and profit generation,” and added, “In particular, the new camera module business will drive the company’s external growth while improving the deteriorated internal profit structure, serving as a signal for a new leap forward.”

Dongyang Networks plans to establish a governance structure that enables swift and clear decision-making through the new business portfolio configuration and build a management environment where resource allocation and concentration are smooth. By maximizing management efficiency, it aims to secure independent competitiveness in the IT business and create momentum to expand into new business areas such as cloud and AI, in addition to SI and IT outsourcing.

In the IT business, Dongyang Networks has maintained its core customers, successfully signing an IT outsourcing contract with Yuanta Securities in 2020. Furthermore, to alleviate concerns from clients regarding the physical division, the company is focusing on preparing business promotion in the newly established company.