[IPO] Raontech "Turned profitable last year... Targeting 130 billion KRW revenue by 2025 through XR growth"

[Asia Economy Reporter Jang Hyowon] Microdisplay specialist Raontech is knocking on the door of KOSDAQ. Raontech announced that it expects to return to profitability last year and that its sales will exceed 130 billion KRW by 2025 due to the growth of the XR smart glasses market.

On the 12th, Kim Bo-eun, CEO of Raontech, held a press conference in Yeouido, Seoul, introducing the company. / Photo by Raontech

On the 12th, Kim Boeun, CEO of Raontech, held a press conference in Yeouido, Seoul, ahead of the KOSDAQ SPAC merger listing, introducing that “Raontech’s microdisplay technology has competitiveness applicable to extended reality (XR) smart glasses, which global IT companies are making every effort to develop.”

Founded in 2009, Raontech is a specialized company in microdisplays, a core component of XR smart glasses. With over 10 years of continuous research and development (R&D), it commercialized for the first time in Korea the technology to implement high-resolution ultra-small displays on semiconductor wafers. Until last year, it had attracted a cumulative investment and R&D funding of 47.8 billion KRW.

Based on these R&D achievements, Raontech launched the world’s smallest high-definition panel (8.5 mm × 8.7 mm) and was recognized for its technological competitiveness by being selected as a next-generation world-class product by the Ministry of Trade, Industry and Energy in November last year.

Recently, global IT companies have been striving to enter the VR, AR, and XR markets. In November last year, American communication chip fabless company Qualcomm showcased high-performance AR glasses in the form of thin and light eyewear equipped with its reference platform ‘Snapdragon AR2 Gen1’ at the ‘2022 Snapdragon Summit.’

CEO Kim Boeun explained, “The market goal is to create smart glasses that look like regular glasses with the lightest weight, longest usage time, and excellent performance form factor,” adding, “Raontech’s microdisplay products have the greatest competitiveness in the AR field, where size and brightness are most important.”

Raontech is estimated to have recorded sales of about 10 billion KRW last year. Although it posted losses until 2021 due to R&D expenditures, the company believes it returned to profitability last year.

Raontech is a technology-specialized listed company that applied a method of discounting future performance to present value when calculating the merger ratio. The sales forecast by Raontech is 24.1 billion KRW this year, 81.1 billion KRW in 2024, and 132.1 billion KRW in 2025, assuming an average annual growth rate of over 100%.

Raontech’s major client is Company A, the world’s largest computer OEM company based in Taiwan. This company secures global IT companies as its main customers, and Raontech has maintained a vendor registration and business relationship with Company A for five years. Last year, Raontech supplied products worth 600,000 USD to Company A.

Company A currently plans to supply AR devices as OEM to a company that gained worldwide popularity with a role-playing mobile game. Accordingly, there is a high possibility that Raontech’s products will be applied to game AR smart glasses, and it is expected to become the largest customer in the future.

CEO Kim Boeun stated, “Enterprise XR glasses will be released this year, and general XR glasses will be launched from 2024,” adding, “Raontech is already a frontrunner in the global competition for core components of smart glasses, the post-smartphone.”

Meanwhile, Raontech received A grades from two institutions in the technology evaluation for listing on the KOSDAQ market. It plans to be listed on KOSDAQ in March through a merger listing with Daishin Balance No.11 SPAC. The merger price is 4,811 KRW, and the merger ratio is 0.4572854. The shareholders’ meeting for merger approval is scheduled for the 16th, and the total number of issued shares after the merger will be 28,441,691 shares.