Seoul Semiconductor’s Q2 revenue up 14.9% year-on-year, driven by general lighting applications

For second-quarter 2017, South Korean LED maker Seoul Semiconductor Co Ltd has reported revenue of KRW267bn (US$238m), up 14.9% on a year ago (and towards the top of the guidance range of KRW250-270bn) due to strong sales in general lighting and strengths across all divisions of the company, with growth in automotive lighting sales proving particularly profitable.

Seoul Semiconductor reckons that it is only Korean firm to maintain revenue growth despite intensifying competition from Chinese LED makers.

For the lighting division, while differentiated products such as Wicop and Acrich rose as a proportion of sales, automotive exterior lamps (e.g. daytime running lights and headlights) continued their rapid growth. The automotive lighting sector has a high barrier to entry due to high technology requirements and intellectual property. Seoul expects to gain further market share with its differentiated Wicop technology.

For the IT division, sales growth was driven mainly by existing customers expanding their product line-ups, supplemented by new customers.

To improve share price stability and increase shareholder value, Seoul has announced plans to almost double its future dividends, based on the fact that its current level of pay-out is half the industry average and an increase to the industry average is necessary. In addition, the firm has sufficient cash generation capabilities, since it has booked above 20% gains in EBITDA, leaving sufficient funds available for future investments (as part of last quarter’s announcement to execute a KRW10bn share buyback program).

For Q2/2017, Seoul Semiconductor expects revenue of KRW260-280bn. It plans to further strengthen its sales and marketing activities for its proprietary technologies including Acrich and Wicop and to focus on acquiring more new customers in order to boost earnings.

Chief financial officer Sangbum Lee notes that SunLike (a new LED technology unveiled in in June that produces light closely matching the spectrum of natural sunlight) has received great interest from customers worldwide, and the firm plans to launch additional new products during the rest of the year and to focus on protecting its intellectual properties.