Display equipment maker Shindo ENG Lab, which listed on KOSDAQ last month, saw its sales for the first half of 2020 drop a steep 58% from a year prior.
The company posted operating loss of 4 billion won and sales of 15.7 billion won in the first half of 2020, it said in its filings to local financial authorities.
The company has posted 8 billion won in profit in the same time period a year ago.
Sales from equipment handover was 11.7 billion won in the time period __ a 66% drop from last year’s 34.8 billion won.
The drop in earnings was caused by delays in Chinese display company’s investment schedule due to the COVID-19 pandemic.
Shindo relies on BOE, Tianma, CSOT and Visionox for 90% of its sales. Its earnings are tied to the four companies’ OLED investment plans.
The South Korean company’s main good is 3D laminator used in OLED panel production.
It is used near and end of a production where it is used to combine the OLED panel with cover window, films and polarizers.
A company spokesperson said it had to consider demand from both display-making clients and set makers and its performance in the second half of 2020 remains to be seen due to this.
Clients like BOE will use Shindo’s equipment to complete their OLED panel, which is in turn shipped to companies such as Huawei, Xiaomi, Lenovo, TCL and Oppo for their smartphones.
Shindo stressed that it was the only one providing 3D laminators to the Chinese market. There were local companies producing the equipment but none of them have succeeded in winning an order.
The company said though it relied heavily on China for its sales, it will attempt to diversify its revenue stream as COVID-19 pandemic becomes more prolonged.
Shindo had a remaining order of 20 billion won. The company has had new orders in July and August as well.
South Korean analysts expected the company posted 20 billion won in operating profits and 98 billion won in sales for the full year of 2020. Last year, it posted 16.9 billion won in operating profits and 84.8 billion won in sales.