[Click eStock] "Philoptics, Expected Expansion of OLED and Secondary Battery Equipment Orders"

Hana Financial Investment Report
Operating Profit Expected to Reach 15.4 Billion KRW This Year

[Asia Economy Reporter Minji Lee] Hana Financial Investment on the 23rd projected that Philoptics can achieve stable performance through the expansion of OLED laser and secondary battery equipment supply.

Philoptics operates primarily in OLED laser equipment and secondary battery notching equipment. It has completed the development of core secondary battery equipment and is delivering it to the customer's factory in Hungary.

Jeonggi Lee, a researcher at Hana Financial Investment, said, "To enhance expertise in the secondary battery business, the division was spun off, increasing the likelihood of orders aligned with the customer's investment schedule," adding, "The new Osan plant will be completed in the fourth quarter, preparing for the full-scale growth of the secondary battery division."

The second-quarter performance is estimated at 50.3 billion KRW in sales and 3.8 billion KRW in operating profit, representing a 180% increase and a turnaround to profit compared to the same period last year. The new orders, which have the greatest impact on Philoptics' future performance, were lower than initially expected. Due to the impact of COVID-19, investment schedules in Korea and China were delayed, leading to a necessary revision of the new orders originally expected to be around 180 billion KRW in the display sector at the beginning of the year to approximately 100 billion KRW. However, since last year's problematic inventory was cleared and only high-margin orders remain in the backlog, a stable performance trend is expected this year.

Philoptics' sales for this year are expected to reach 218 billion KRW, with an operating profit of 15.4 billion KRW, representing a 55% increase and a turnaround to profit. The delay in new orders due to COVID-19 affected the performance. However, since the orders were not canceled, new orders are expected to increase significantly next year.

This year is a period when various momentum factors mature alongside performance recovery. Researcher Jeonggi Lee explained, "Philoptics is solely handling foldable OLED cutting, UTG, and HIAA equipment, which are expected to experience high growth, and is a key equipment supplier to major customers in the secondary battery division," adding, "Recently, it was selected as one of the four companies for a national research project on Shadow deposition for OLED organic materials, which Japan has been producing exclusively, equipping it with new growth momentum following the secondary battery business."