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E Ink Holdings Navigates Color E-Paper Transition, Reports Robust Annual Revenue

Amidst a strategic shift to color e-paper, E Ink anticipates enhanced market presence in consumer tech and outdoor signage, despite a temporary growth slowdown
e 8069.TWO Mid and Small Cap 2000 Tech 350
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E Ink Holdings, a leader in e-paper technology, has navigated a year of transition towards color e-paper with commendable financial resilience, posting the second highest annual revenue in twelve years. Despite a slowdown in operating growth due to the strategic shift, the company remains optimistic about the future, especially in consumer applications like e-readers and notebooks, electronic shelf labels (ESL), and outdoor signage.

Chairman Li Zhenghao of E Ink’s parent company, Yuen Foong Yu, anticipates an even stronger performance in the coming year, buoyed by quarterly improvements. The construction of a new production facility in Hsinchu is on track, with expectations to house E Ink’s fifth and sixth production lines. These additions are designed to enhance the cost competitiveness and facilitate the expansion of e-paper into larger formats, particularly for signage, with significant contributions projected by 2026.

The evolving landscape of color e-readers presents promising opportunities, with several brands gearing up to launch new products featuring E Ink’s Gallery and Kaleido technologies. The company’s strategy allows brand partners to steer product adoption, underscoring a customer-centric approach in gauging the market potential for color readers based on actual sales.

In the ESL segment, a resurgence in demand for four-color technology has been noted, following a dip in inventory levels in the first quarter. Financially, E Ink Holdings faced challenges in the fourth quarter of 2023, with a 32% decline in revenue and a 33% decrease in after-tax net profit year-on-year. Despite this, the full-year figures remained strong, with consolidated revenue down by 10% and net profit after tax decreasing by 21% from the previous year, still marking the second highest achievement in the company’s history.

Committed to dividends, E Ink’s board of directors has maintained a payout of 4.5 yuan per share, underscoring a stable investment return for shareholders. As E Ink Holdings continues to refine its e-paper technology, improving yield and cost structures, the company is poised to carve a significant niche in the display industry, challenging the dominance of LCD and OLED technologies

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