Korea / Special Situations, Clepsydra Capital

Sanghyun Park

Korea / Special Situations

Equity Capital Markets

We have another microcap IPO stock in Korea, which will try to ride on the current OLED super cycle that has been a prevailing theme in Korea's stock market throughout this year. <a href="https://www.smartkarma.com/entities/24424" target="_blank" data-smartkarma-citation="entities:24424:1">KPS Corp/Korea (256940 KS)</a> was founded in 2000. But it started focusing on the development of OLED equipment 6 years later in 2006 when the current CEO Kim Jung-ho joined the company with his 20+ year industry experience in OLED equipment development. He had previously worked as an electrical equipment engineer at <a href="https://www.smartkarma.com/entities/2458" target="_blank" data-smartkarma-citation="entities:2458:1">Yaskawa Electric Corp (6506 JP)</a> where he had many hands-on development experiences in relation to OLED equipment. Now, we can safely say that KPS is an OLED equipment pure-play company. It makes several types of OLED related equipment used in OLED panel production process. But the only thing that matters is its OLED mask tension welding machine which accounts for 70-80% of its total sales. This OLED mask tension welding machine basically manufacture FMM masks for R (red), G (green), B (blue)  evaporation based on precision position control and auto algorithms.<div class="content-caption">(KPS Corp's OLED mask tension welding machine - Courtesy KPS Corp)</div><figure class="editor-figure mceNonEditable"><img src="https://static-prod.smartkarma.com/images/media/000/032/010/original/1.png?1503309978" class="editor-image img-responsive" data-smartkarma-image-id="32010"></figure><div><table class="table table-striped"><colgroup></colgroup><tbody><tr><td colspan="2" style="width: 236px;">(₩ mil)</td><td style="width: 93px;">2014</td><td style="width: 88px;">2015</td><td style="width: 80px;">2016</td><td colspan="2" style="text-align: center; width: 149px;">1H17</td></tr><tr><td rowspan="3" style="width: 129px;">OLED mask tension welding machine</td><td style="width: 107px;">Export</td><td style="width: 93px;">6,876</td><td style="width: 88px;">3,688</td><td style="width: 80px;">9,257</td><td style="width: 75px;">4,691</td><td style="width: 74px;">33.0%</td></tr><tr><td style="width: 107px;">Local</td><td style="width: 93px;">1,422</td><td style="width: 88px;">1,610</td><td style="width: 80px;">5,791</td><td style="width: 75px;">5,739</td><td style="width: 74px;">40.4%</td></tr><tr><td style="width: 107px;">Sub-total</td><td style="width: 93px;">8,298</td><td style="width: 88px;">5,298</td><td style="width: 80px;">15,048</td><td style="width: 75px;">10,430</td><td style="width: 74px;">73.4%</td></tr><tr><td rowspan="3" style="width: 129px;">Other OLED equipment</td><td style="width: 107px;">Export</td><td style="width: 93px;">325</td><td style="width: 88px;">231</td><td style="width: 80px;">1,012</td><td style="width: 75px;">800</td><td style="width: 74px;">5.6%</td></tr><tr><td style="width: 107px;">Local</td><td style="width: 93px;">1,073</td><td style="width: 88px;">28</td><td style="width: 80px;">764</td><td style="width: 75px;">2,942</td><td style="width: 74px;">20.7%</td></tr><tr><td style="width: 107px;">Sub-total</td><td style="width: 93px;">1,398</td><td style="width: 88px;">259</td><td style="width: 80px;">1,776</td><td style="width: 75px;">3,742</td><td style="width: 74px;">26.3%</td></tr><tr><td rowspan="3" style="width: 129px;">Precision stage equipment</td><td style="width: 107px;">Export</td><td style="width: 93px;">504</td><td style="width: 88px;">1,579</td><td style="width: 80px;">467</td><td style="width: 75px;">27</td><td style="width: 74px;">0.2%</td></tr><tr><td style="width: 107px;">Local</td><td style="width: 93px;">157</td><td style="width: 88px;">248</td><td style="width: 80px;">207</td><td style="width: 75px;">2</td><td style="width: 74px;">0.0%</td></tr><tr><td style="width: 107px;">Sub-total</td><td style="width: 93px;">661</td><td style="width: 88px;">1,827</td><td style="width: 80px;">674</td><td style="width: 75px;">29</td><td style="width: 74px;">0.2%</td></tr><tr><td rowspan="3" style="width: 129px;">Others</td><td style="width: 107px;">Export</td><td style="width: 93px;">-</td><td style="width: 88px;">-</td><td style="width: 80px;">-</td><td style="width: 75px;">-</td><td style="width: 74px;">-</td></tr><tr><td style="width: 107px;">Local</td><td style="width: 93px;">501</td><td style="width: 88px;">1172</td><td style="width: 80px;">49</td><td style="width: 75px;">3</td><td style="width: 74px;">0.0%</td></tr><tr><td style="width: 107px;">Sub-total</td><td style="width: 93px;">501</td><td style="width: 88px;">1,172</td><td style="width: 80px;">49</td><td style="width: 75px;">3</td><td style="width: 74px;">0.0%</td></tr><tr><td rowspan="3" style="width: 129px;">Total</td><td style="width: 107px;">Export</td><td style="width: 93px;">7,705</td><td style="width: 88px;">5,498</td><td style="width: 80px;">10,736</td><td style="width: 75px;">5,518</td><td style="width: 74px;">38.8%</td></tr><tr><td style="width: 107px;">Local</td><td style="width: 93px;">3,152</td><td style="width: 88px;">3,058</td><td style="width: 80px;">6,811</td><td style="width: 75px;">8,686</td><td style="width: 74px;">61.2%</td></tr><tr><td style="width: 107px;">Total</td><td style="width: 93px;">10,857</td><td style="width: 88px;">8,556</td><td style="width: 80px;">17,547</td><td style="width: 75px;">14,204</td><td style="width: 74px;">100.0%</td></tr><tr><td colspan="7" style="width: 646px;">Source: DART</td></tr></tbody></table></div>

We have another microcap IPO stock in Korea, which will try to ride on the current OLED super cycle that has been a prevailing theme in Korea's stock market throughout this year. KPS Corp/Korea (256940 KS) was founded in 2000. But it started focusing on the development of OLED equipment 6 years later in 2006 when the current CEO Kim Jung-ho joined the company with his 20+ year industry experience in OLED equipment development. He had previously worked as an electrical equipment engineer at Yaskawa Electric Corp (6506 JP) where he had many hands-on development experiences in relation to OLED equipment. Now, we can safely say that KPS is an OLED equipment pure-play company. It makes several types of OLED related equipment used in OLED panel production process. But the only thing that matters is its OLED mask tension welding machine which accounts for 70-80% of its total sales. This OLED mask tension welding machine basically manufacture FMM masks for R (red), G (green), B (blue)  evaporation based on precision position control and auto algorithms.(KPS Corp's OLED mask tension welding machine - Courtesy KPS Corp)(₩ mil)2014201520161H17OLED mask tension welding machineExport6,8763,6889,2574,69133.0%Local1,4221,6105,7915,73940.4%Sub-total8,2985,29815,04810,43073.4%Other OLED equipmentExport3252311,0128005.6%Local1,073287642,94220.7%Sub-total1,3982591,7763,74226.3%Precision stage equipmentExport5041,579467270.2%Local15724820720.0%Sub-total6611,827674290.2%OthersExport-----Local50111724930.0%Sub-total5011,1724930.0%TotalExport7,7055,49810,7365,51838.8%Local3,1523,0586,8118,68661.2%Total10,8578,55617,54714,204100.0%Source: DART

KPS IPO Summary - Another Microcap OLED Stock to Test the Market

South Korea

KPS Corporation of Korea supplies and markets consumable probe blocks for display panel and Printed Circuit Board (PCB) inspection. The Company also provides power supply units for Light Emitting Diode (LED) modules.

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KPS IPO Summary - Another Microcap OLED Stock to Test the Market

We have another microcap IPO stock in Korea, which will try to ride on the current OLED super cycle that has been a prevailing theme in Korea's...

Sanghyun Park