[Click eStock] "PNH Tech, Full-Scale Expansion of OLED Material Sales"

[Asia Economy Reporter Hyunseok Yoo] Shinhan Financial Investment analyzed on the 13th that PNH Tech is expected to improve its performance due to the expansion of OLED material sales. No investment opinion or target price was provided.

PNH Tech is a specialized company in OLED organic electronic materials established in 2007. With its own patents, it developed hole transport layer (HTL) materials for lighting in 2015 and high refractive index CPL for mobile devices in 2017. It succeeded in commercializing blue (B) and red (R) light-emitting materials together with DuPont in the U.S. As new materials, it is promoting the commercialization of low refractive index CPL and P-dopant materials.

Shinhan Financial Investment emphasized that PNH Tech is following the successful formula of OLED material stocks. Due to the industrial characteristics of OLED materials, initial product certification takes a long time, but once supplied, continuous supply is possible. Accordingly, it is analyzed that steep sales and profit increases accompany each additional supplied material.

Researcher Seonghwan Hwang of Shinhan Financial Investment explained, "PNH Tech is promoting diversification of materials and customers centered on the existing high refractive index CPL and TV materials it supplies. Therefore, it is highly likely to reproduce the steep growth shown by major OLED material companies in the past."

Shinhan Financial Investment forecasted that PNH Tech’s performance will continue to improve. The expected sales and operating profit for this year are 23.2 billion KRW and 3.6 billion KRW, respectively. Sales are expected to increase by 171.7% year-on-year, and operating profit is expected to turn positive. Researcher Hwang said, "Due to the increase in small and medium-sized OLED shipments by major customer LG Display, steady growth of high refractive index CPL is expected following 2020. The long-life blue host for TV adopted in 2020 is expected to lead sales growth in the second half as it will be actively supplied to premium lines."

Next year’s expected sales and operating profit are 37.6 billion KRW and 9.6 billion KRW, respectively, representing increases of 62.1% and 170.7% compared to the previous year. He stated, "This reflects the growth of high refractive index CPL and long-life blue host for mobile due to increased shipments of small and medium-sized OLEDs by front-end customers and the full-scale expansion of OLED TV materials."

He added, "The estimates only consider the expected sales volume of devices adopting PNH Tech’s materials in 2022, excluding additional new projects currently being prepared. Since development of low refractive index CPL, p-dopant, and additional light-emitting materials is underway, upward revisions of performance estimates are possible depending on customer diversification and project success."