[Click eStock] "Espolytech, Surge in Demand for COVID-19 Droplet Barrier Installation"

[Asia Economy Reporter Hyunseok Yoo] KTB Investment & Securities analyzed on the 22nd that demand for installing droplet-blocking partitions due to the novel coronavirus disease (COVID-19) is rapidly increasing for Espolitech. No investment opinion or target price was provided.

Espolitech is a specialized manufacturer of optical sheets and films, and engineering plastics (EP). Its main products are light guide plates and diffusion plates for TVs, and industrial EP, with sales composition as of 1Q20 being 49.6% optical sheets and films and 50.4% engineering plastics.

Jae-yoon Kim, a researcher at KTB Investment & Securities, stated, "Espolitech's engineering plastics include various industrial plastics such as PC sheets used for soundproof walls and roofing materials, and flame-retardant PC used in aviation. Currently, as the US economy reopens, demand for acrylic partitions is surging. According to guidelines from the US Centers for Disease Control and Prevention, there is explosive growth in demand for acrylic partitions in places with face-to-face contact such as offices, factories, retail stores, and restaurants."

He added, "Since the end of May, demand for acrylic sheets has surged starting with government offices and public transportation, and the installation of partitions has continued from large shopping malls like Walmart to retail stores, leading to a shortage of acrylic sheets in the US. According to KOTRA data from July, the order quantities for acrylic sheet manufacturers in the US have surged by 6 to 30 times." He further emphasized, "Accordingly, the order quantities for Espolitech's droplet-blocking partitions, Bypens and Byshield, destined for the US have explosively increased since the second quarter, reaching full capacity levels in the Bypens and Byshield production lines."

KTB Investment & Securities expects that considering the current US order volume, Espolitech's sales this year will reach 175 billion KRW, and operating profit will be 20 billion KRW, representing increases of 29.6% and 34.2% respectively compared to the previous year.