South Korean power amplifier maker Wipam is spending 11 billion won to form an investment firm.
Pentastone Investment will be a wholly owned subsidiary that focuses on strategic investments in new businesses, technology and finance.
The company seems to have found the fund to form the investment firm through its IPO in July last year.
Wipam said at the time that its liquid current assets stood at 2.2 billion won as of the third quarter of 2020.
The firm secured 39.7 billion won in funding in its IPO afterwards. In September 2020, the company reported liquid current assets of 37.5 billion won.
At the time of the IPO, the firm had said it planned to spend 28.5 billion won in operation costs, but there was no mention of forming an investment firm. Around 25.5 billion won of that would be spent on production costs and 3 billion won would be spend to form its Chinese regional office, the company said.
Wipam, which is fabless, needs initial cash to pay contract chip and package makers to manufacture its products.
Wipam posted 28.9 billion won in sales and 1.5 billion won in operating loss in 2020 as of the third quarter. NH Investment & Securities, which underwrote the company’s IPO, estimates that Wipam will post 37.8 billion won in sales and 3.2 billion won in operating loss for the full year of 2020.
In 2019, Wipam posted 125.4 billion won in sales and 12 billion won in operating income. Samsung Electronics accounted for 99% of its sales. Wipam’s power amplifier modules are used by Samsung for its mid-tier smartphones.
Last month, Wipam set up its sales subsidiary in China. It acquired 70% stake of the company with 1.2 billion won.
NH Investment & Securities expects the South Korea component maker to post up to 174 billion won in sales at 19.9 billion won in operating income in 2021 thanks to expansion of mid-tier 5G smartphones and the company winning new orders from China.