Vertical Divider
Visionox Leaves Questions on Ownership Transfer Unanswered, While Suffering a Loss in H121
In May, we discussed reports that Visionox’s share ownership and control had not been properly disclosed. The company has asked the Shenzhen Stock Exchange for more time to gather relevant data to determine whether shares were transferred from one entity to another at a substantial (~40%) discount to net asset value. The stock was under pressure and questions were raised about management’s transparency before and after the exchange.
Since the announcement, Visionox reported an order from Huawei spin-off Honor and that in Q221, their Gen 6 flexible OLED fab in Gu’an had begun shipments. Visionox announced expected results for the 1st half of this year and despite the order and overall strong demand for OLED products, the company expected how an operating loss compared to a profit in H120.. Their unaudited results showed operating income for the 1st half of between 1.35b ($208.7m US) and 1.55b yuan ($239.6m US), of which between $200m and $216m came from OLED production, but net profits will show a loss between $111m and $131m.
They pointed to increased R&D and labor costs relating to the Honor order, and that last year’s licensing revenue from an affiliate would not be repeated this year. They also attributed part of the loss to reductions in government subsidies. Visionox is running two 15K fabs (Gen 5.5 and Gen 6) and is ramping up a 30K Gen 6 fab in Hefei. They also cited the potential for yield improvements as a reason for a more positive outlook. Visionox has shown a foldable prototype and is apparently planning to supply the display for the Honor Magic expected later this year. Visionox is upgrading its under-screen camera project, for which it claims global leadership, because it was used in ZTE’s Axon 20, the first smartphone with an UPC which is expected to be upgraded in the Axon 30.
In May, we discussed reports that Visionox’s share ownership and control had not been properly disclosed. The company has asked the Shenzhen Stock Exchange for more time to gather relevant data to determine whether shares were transferred from one entity to another at a substantial (~40%) discount to net asset value. The stock was under pressure and questions were raised about management’s transparency before and after the exchange.
Since the announcement, Visionox reported an order from Huawei spin-off Honor and that in Q221, their Gen 6 flexible OLED fab in Gu’an had begun shipments. Visionox announced expected results for the 1st half of this year and despite the order and overall strong demand for OLED products, the company expected how an operating loss compared to a profit in H120.. Their unaudited results showed operating income for the 1st half of between 1.35b ($208.7m US) and 1.55b yuan ($239.6m US), of which between $200m and $216m came from OLED production, but net profits will show a loss between $111m and $131m.
They pointed to increased R&D and labor costs relating to the Honor order, and that last year’s licensing revenue from an affiliate would not be repeated this year. They also attributed part of the loss to reductions in government subsidies. Visionox is running two 15K fabs (Gen 5.5 and Gen 6) and is ramping up a 30K Gen 6 fab in Hefei. They also cited the potential for yield improvements as a reason for a more positive outlook. Visionox has shown a foldable prototype and is apparently planning to supply the display for the Honor Magic expected later this year. Visionox is upgrading its under-screen camera project, for which it claims global leadership, because it was used in ZTE’s Axon 20, the first smartphone with an UPC which is expected to be upgraded in the Axon 30.
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