PIMS looks beyond its Samsung exclusivity to LG... Revenue per product expected to rise by up to 5x

[Financial News]  PIMS, a specialist in masks for OLED deposition, is seeking a recovery in its performance by diversifying its customer base and expanding the supply of high-value-added products. An analysis suggests that it can broaden its customer base from a supply structure centered on Samsung Display to include LG Display, while increasing revenue per product by up to five times through the supply of integrated solutions.
On the 21st, Lee Jun-seok, an analyst at Hanyang Securities, said PIMS is effectively the exclusive supplier of OMM (Open Metal Mask) products for OLED deposition processes, from Samsung Display’s 5.5-generation to 8th-generation production lines. The company completed its registration as an official supplier to LG Display in January this year, and Lee forecast at least 8 billion won in new revenue next year following product validation in the fourth quarter. He did not, however, issue an investment rating or a target price. 
Expanding the range of products supplied is key to improving profitability. PIMS is broadening its offerings beyond standalone OMM products to include frames, coatings and sticks. Integrated solution supplies are expected to ramp up starting with Samsung Display’s new A6 line. A standalone OMM product currently sells for 4 million to 5 million won, while an integrated solution can cost up to 20 million won, potentially increasing the supply value per product by three to five times.
Growth in the foldable smartphone and automotive OLED markets is also a positive factor. Demand for OMMs is more sensitive to new model launches and design changes than to panel production volume, raising expectations for increased demand for high-precision masks.
The burden of fixed costs is also expected to ease. Depreciation stemming from approximately 80 billion won in upfront capital investment is estimated to decline from 8.5 billion won this year to 6.5 billion won next year and 4.5 billion won in 2028.
Hanyang Securities expects PIMS to post an operating loss of 2.5 billion won this year, then return to profitability next year with revenue of 76.5 billion won and operating profit of 3.5 billion won.
Lee said that “new revenue from LG Display and expanded supplies of integrated solutions to Samsung Display will drive an improvement in performance.” 

[email protected] Kim Gyeong-a Reporter