Korea / Special Situations, Clepsydra Capital

Sanghyun Park

I investigate special situations in Korea.

Korea / Special Situations

Equity Capital Markets

ELP Corp. makes OLED/LCD testing/inspection/aging equipment, which basically conducts a sort of stress test by exerting heat and high voltage to OLED panels to gauge the durability. The company was founded in 1999, and got listed in KONEX (younger brother of KOSDAQ) in 2015. Founder and CEO Lee Jae-hyuk has engineering background. He has a master's degree in electrical engineering and started his engineering career at D.I. (003160)'s R&amp;D center. He had spent about 5 years at D.I. During his stay at D.I., he had been mainly responsible for the development of semiconductor test/inspection equipment. (Several key R&amp;D members of ELP are also from D.I.) So, we can safely say that ELP has a deep and solid techy foundation. The company was initially started as a LCD equipment maker. But around 2003, Samsung contacted ELP and asked for joint development on OLED. Not many companies were interested in OLED at that time, but ELP, ironically, didn't have much to lose by converting from LCT to OLED. So, the company took Samsung's offer and started focusing on OLED as one of Samsung's key OLED suppliers.But things were not good until 2011. Samsung hadn't had much success with OLED in 2000s. It was 2011 when Samsung finally saw hope for its OLED business. Not surprisingly, it was 2011 when ELP also started seeing shiny day for itself. From 2012 to 2014, ELP's sales have fluctuated quite significantly. It was mainly because Samsung wasn't 100% sure about the future of its OLED business. In 2012, Samsung stayed indecisive on OLED investment. As a result, ELP's sales fell to half its previous year's sales in 2012. But again in 2013, Samsung's OLED investment increased substantially, so did ELP's sales. Believe or not, again in 2014, Samsung made no major investment on OLED. So, ELP's sales took a dive that year. Fortunately, from 2015, OLED sales fluctuation issue has virtually gone. It is widely viewed and agreed that OLED is now one of the mainstream technologies and more and more players (both demand side and supply side) will jump to the OLED bandwagon. So, it is safe to say that ELP's OLED sales will continue to grow quite stably at least until 2020.* In Part 1 (as below), I summarized the overview of this IPO with the financials and valuation. In Part 2, I will analyze the company's growth potential and appropriate valuation level.

ELP Corp. makes OLED/LCD testing/inspection/aging equipment, which basically conducts a sort of stress test by exerting heat and high voltage to OLED panels to gauge the durability. The company was founded in 1999, and got listed in KONEX (younger brother of KOSDAQ) in 2015. Founder and CEO Lee Jae-hyuk has engineering background. He has a master's degree in electrical engineering and started his engineering career at D.I. (003160)'s R&amp;D center. He had spent about 5 years at D.I. During his stay at D.I., he had been mainly responsible for the development of semiconductor test/inspection equipment. (Several key R&amp;D members of ELP are also from D.I.) So, we can safely say that ELP has a deep and solid techy foundation. The company was initially started as a LCD equipment maker. But around 2003, Samsung contacted ELP and asked for joint development on OLED. Not many companies were interested in OLED at that time, but ELP, ironically, didn't have much to lose by converting from LCT to OLED. So, the company took Samsung's offer and started focusing on OLED as one of Samsung's key OLED suppliers.But things were not good until 2011. Samsung hadn't had much success with OLED in 2000s. It was 2011 when Samsung finally saw hope for its OLED business. Not surprisingly, it was 2011 when ELP also started seeing shiny day for itself. From 2012 to 2014, ELP's sales have fluctuated quite significantly. It was mainly because Samsung wasn't 100% sure about the future of its OLED business. In 2012, Samsung stayed indecisive on OLED investment. As a result, ELP's sales fell to half its previous year's sales in 2012. But again in 2013, Samsung's OLED investment increased substantially, so did ELP's sales. Believe or not, again in 2014, Samsung made no major investment on OLED. So, ELP's sales took a dive that year. Fortunately, from 2015, OLED sales fluctuation issue has virtually gone. It is widely viewed and agreed that OLED is now one of the mainstream technologies and more and more players (both demand side and supply side) will jump to the OLED bandwagon. So, it is safe to say that ELP's OLED sales will continue to grow quite stably at least until 2020.* In Part 1 (as below), I summarized the overview of this IPO with the financials and valuation. In Part 2, I will analyze the company's growth potential and appropriate valuation level.

ELP Corp IPO 1부 - 일정, 재무 및 가치 평가