E Ink Holdings Inc (元太科技), the world’s sole supplier of e-paper displays for e-readers and shelf labels, posted its best quarterly net profit for the first quarter in nine years amid increased demand during a traditionally slow season.
Net profit soared 80 percent to NT$787 million (US$26.23 million) in the quarter ended March 31, compared with NT$438 million a year earlier. That translated into earnings per share of NT$0.69, up from NT$0.39.
E Ink posted lower royalty income of NT$371.23 million last quarter from NT$448.74 million a year earlier, a company financial statement showed.
E Ink said that it expects royalty income to continue to fall this quarter due to increasing adoption of rivals’ OLED technology.
Gross margin jumped to 46.2 percent from 42.4 percent in the prior year, as it shipped more e-paper display films, which delivered a higher margin than fully assembled e-paper display modules with panels attached.
The Hsinchu-based company expects growth momentum to continue this quarter, with strong demand for electronic shelf labels and color e-paper displays mainly for e-readers.
“The second quarter looks like a stronger quarter than the same period last year. Outlook for the second quarter is relatively positive,” E Ink chairman Johnson Lee (李政昊) told an investors’ teleconference on Thursday.
E Ink’s revenue this quarter might surpass the NT$3.56 billion in the second quarter last year, which would mean revenue grew more than 22 percent from last quarter’s NT$2.92 billion, the company said.
The COVID-19 pandemic is accelerating adoption of electronic shelf labels, which allow retailers to update product price displays automatically from a central controller, it said.
However, some installations are to be delayed due to lockdowns in many countries to curb the spread of the virus, the company said.
Robust demand for color printing e-paper displays due to their affordability has far surpassed its expectations, E Ink said.
Due to limited capacity, order backlogs would not be digested until August or September, Lee said.
E Ink is racing to expand capacity for the color e-paper displays to satisfy demand, he said.
China’s iFLYTEK Corp (科大訊飛) plans to roll out new e-readers equipped with E Ink’s color displays this quarter, E Ink said.
European e-reader maker PocketBook also plans to launch color e-readers that adopt E Ink’s technology, it said.
Meanwhile, Hisense Electric Co (海信) is adopting E Ink color displays for its new smartphone.
The Chinese firm said it plans to allocate 15 percent more capital spending this year than last year.
Over the past few years, E Ink has spent NT$700 million to NT$800 million a year on new equipment and facilities.
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