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E Ink Optimistic About E-Paper Market Despite Q1 Revenue Dip

Strong Growth in Consumer Business and Expanding Applications for Color E-Paper
e 8069.TWO Mid and Small Cap 2000 Tech 350
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E Ink Holdings remains optimistic about the future of electronic paper, despite a decline in first-quarter revenue and profit due to customer product transitions and inventory adjustments. At a press conference on May 22, Chairman Lee Johnson emphasized that the company’s operational performance in 2024 is expected to surpass 2023, with improvements anticipated in each subsequent quarter.

E Ink reported a 22% year-on-year decrease in consolidated revenue for Q1 2024, totaling NT$5.643 billion. Gross profit dropped 54% to NT$833 million, and the gross profit margin stood at 15%. Net profit attributable to the parent company was NT$1.324 billion, down 25% from the previous year, resulting in earnings per share of NT$1.16, compared to NT$1.54 in Q1 2023.

The decline was attributed to delayed customer product transitions and fluctuating demand, alongside reduced shipments of e-paper materials. However, Q1 revenue and net profit were still E Ink’s third highest in the past 13 years, highlighting the company’s resilience.

The Consumer Electronics (CE) segment saw a 20% year-on-year revenue increase, driven by strong demand for color e-paper readers, particularly those featuring E Ink Kaleido 3 technology. This shift from black-and-white to color e-paper has been well-received, boosting sales and prompting discussions about expanding Kaleido printer production.

Conversely, revenue from IoT businesses, such as Electronic Shelf Labels (ESL), declined by 50% year-on-year. The decrease was due to existing module customer inventories, which dampened demand. E Ink expects this segment to rebound in the third and fourth quarters as inventories normalize.

E Ink is also advancing its development of large-size e-paper, catering to market demand for retail and outdoor advertising billboards. Retail clients are particularly interested in sizes of 42 inches and larger. E-paper’s low power consumption, as it only uses power when updating the screen, makes it a competitive option for outdoor signage compared to traditional LCDs.

Despite the challenges, E Ink is confident in the expanding applications of electronic paper across consumer products, ESL, and outdoor signage. “This year is getting better every quarter,” reiterated Chairman Lee Johnson, maintaining the company’s full-year financial guidance unchanged and reinforcing the positive outlook for the remainder of 2024.

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