Segyung Hitech, the sole supplier of decoration film for Samsung Electronics’ Galaxy Fold, is soon to be listed on the tech-heavy Kosdaq market, according to the company on July 15.
It also said it has added China’s Huawei and Xiaomi as new clients.
“We’ll be supplying decoration film to Xiaomi’s smartphones in the latter half of this year,” said Lee Young-min, CEO of Segyung Hitech at an IR session held at Yeouido. In a separate deal, Segyung also signed on with Huawei to supply to its next year smartphone models.
With the proceeds from the IPO, Segyung plans to expand its second plant in Vietnam to double its annual film capacity to 10 million from the current 5 million. The second plant will be completed in November to begin operations in January of 2020.
Decoration film is used for lettering or coloring on glass or plastic surfaces in smartphones. As more smartphones are becoming bezel-less, more phone makers are putting unique designs on the backside using decoration film.
Segyung Hitech’s technological prowess lies in the Micro Dry process Decoration (MDD), which makes the designs last longer.
“With MDD, there is no need to go through a separate drying process, and there’s more room for design,” said Lee.
Until now, Segyung Hitech has been supplying Samsung Electronics, Oppo and OnePlus. Its first deal was with the pink gold Galaxy S7 in 2016. A year later, the supplier’s decoration film sales reached 7.7 billion won ($6.5 million), shooting up to 119.8 billion won in 2018.
Lee explained that various technologies including pattern design and printing are necessary for manufacturing decoration film. “Decoration film is no longer an accessory, but one of the key components of smartphones,” he added.
Starting next year, the film will be applied to a wider lineup including 5G and budget phones. It also would be applied to more foldable phones, which may not contribute to Segyung Hitech's immediate sales, the company appeared to be upbeat about the long-term prospects, which is why it spent 3 billion won in May to buy a factory in Suwon to produce the film for the Galaxy Fold.
Segyung will review the IPO demand during July 17-18. Its offering price is expected between 46,000 won and 52,000 won, while the number of stocks offered will be 1 million. During July 22-23, the firm will recruit retail investors. The lead manager is Kiwoom Securities.
Based in Suwon of Gyeonggi Province, Segyung Hitech was established in 2006. It initially focused on mobile film but began to develop decoration film after slipping into the red in 2014. As a result, annual revenues jumped to 256.6 billion won from the 102.2 billion won in 2017. First quarter revenues alone this year were 102.5 billion won, indicating its annual sales could grow 20-20% on-year.
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