[Click eStock] "Solum, ESL Business Recovery... Expecting Performance Growth in 2025"

On the 28th, DS Investment & Securities analyzed that SoluM's electronic shelf label (ESL) business is showing a promising recovery trend, with performance recovery and growth expected from 2025.

In a report on the same day, DS Investment & Securities researcher Cho Dae-hyung stated, "SoluM's sales in the third quarter of this year amounted to 472.2 billion KRW, a 10.8% decrease compared to the same period last year, but a 19.9% increase compared to the previous quarter," adding, "Operating profit recorded 27 billion KRW, with an operating profit margin (OPM) of 5.7%, down 40.4%."

Researcher Cho analyzed, "The main cause of the sales decline and profitability drop was identified as the deferral of sales due to changes in ESL product specifications by clients," and "As a result, profitability improvement was not significant."

However, he noted, "Although the ESL business segment experienced poor performance in the third quarter, it showed positive signs with a rebound in orders and sales," forecasting, "Cumulative new orders in the third quarter reached approximately 650 billion KRW, and the order backlog increased by 300 billion KRW compared to the end of last year to 1.95 trillion KRW, which will be reflected in sales over the next three years."

He added, "SoluM's ESL business segment is expected to start full-scale growth in 2025," explaining, "Additional clients and re-selection as a business partner are ongoing, and notably, a contract with a major German retailer has been finalized, valued at about 350 billion KRW, to be recognized over six years."

He further stated, "Contracts with major Nordic retailers have also been confirmed, and contracts with global North American retailers are anticipated," projecting, "SoluM aims for sales of 1.951 trillion KRW and operating profit of 144.4 billion KRW in 2025, with profitability expected to improve significantly as the proportion of 4Color products expands in 2025."