Equipment businesses Jusung Engineering and SNU Precision have made dramatic turnarounds. Stock street is estimating that Jusung, which had its annual net loss fall down to $82.3 million (100 billion KRW), have made about $14 million (17 billion KRW) in operating profit last year. SNU Precision, which had its loss at $10.6 million (12.9 billion KRW), has succeeded in turning its loss to surplus.
They were able to recover by developing new technologies. As soon as they secured technical skills, opportunities have come to their doorsteps. Their technical skills have become even brighter as investments for OLED have gone full-scale last year. Investments for Chinese display panels that had come at the right time also beneficial.
Jusung Engineering (CEO Hwang Chul-joo) is setting this year as the first year to re-launch its business. With announcement of 2015’s performance about to take place, stock street is estimating that last year’s sales is somewhere between $140 million and $148 million (170 billion KRW and 180 billion KRW) and its operating profit will be about $14 million (17 billion KRW). After recording net loss of $94.3 million (114.5 billion KRW) in 2012, it has succeeded in making surplus last year.
Jusung Engineering was one of the leading business in semiconductor and display equipment markets. However its business had started to become worse as its new investment in solar energy equipment business had gotten difficult. Its stock, which had gone up to $99.63 (121,000 KRW) after being listed in 1999, had fallen sharply to $1.65 (2,000 KRW) as solar energy markets did not open up. There were also other unfavorable factors such as financial crisis, depression of semiconductor and display markets, depression of new businesses and others.
Jusung decided to choose a standard tactic called development of new technologies. It went all in into developing deposition and encapsulation equipment for OLED and atomic layer deposition (ALD) equipment. Due to these equipment, it was able to raise its technical skills in equipment up to one of world’s best. Its equipment was used for world’s best production lines from LG Display, SK Hynix and others.
Jusung, which had succeeded in making a turnaround last year, is expecting that it will win orders of premium equipment from OLED and 10-nano semiconductor fine process lines this year again. It seems that display equipment (44%) and semiconductor equipment (56%) will help Jusung’s growth of sales at a same level.
SNU Precision (CEO Park Hee-jae) has succeeded in making surplus last year by making $57.6 million (70 billion KRW) and $2.3 million (2.8 billion KRW) in sales and operating profit respectively. Although its sales decreased by 16%, its operating profit switched from loss of $8.56 million (10.4 billion KRW) into surplus. Its net income also made surplus of $1.73 million (2.1 billion KRW) from loss of $10.6 million (12.9 billion KRW).
SNU develops and supplies LCD optical measuring equipment and deposition equipment for OLED and solar energy. 65 to 70% of sales come from deposition equipment. By jumping into development of deposition and encapsulation equipment technologies that are major OLED processes, SNU chose them as new driving forces of its sales.
SNU’s performance had gone up and down in last 3 years. Its sales in 2012, 2013, and 2014 were $36.4 million (44.2 billion KRW), $83.4 million (101.3 billion KRW), and $68.6 million (83.3 billion KRW) respectively. Its operating profit had come and gone from loss and surplus as it was -$12.5 million (-15.2 billion KRW), $10 million (12.2 billion KRW), and -$8.56 million (-10.4 billion KRW) in 2012, 2013, and 2014 respectively.
It has started to making surplus as investments in LCD and OLED facilities from South Korea and other countries have started to increase. As China’s investment into LCD facilities has started to increase, exportation of LCD optical inspection equipment has started to increase also. Fact that South Korea’s panel manufacturers had invested into Gen.5 OLED facilities also has had an effect on SNU’s performance.
Jusung Engineering and SNU Precision are both looking to receive benefits from South Korean and Chinese investments in facilities. LG Display and Samsung Display are both ready to invest in OLED and flexible OLED. China’s BOE, CSOT, Ever Display and others are examining about investment in OLED and Flexible OLED. Jusung and SNU are both looking for their ‘Second Heyday’ by growing 20 to 30% compared to last
Staff Reporter Bae, Okjin | withok@etnews.com