[Biz Leader] Chunsup Jeon, CEO of Yesuntech: "A Complete Transformation into a Profitable Company... Time for a Corporate Value Reassessment"

Operational Overhaul Focused on AI Automation and High Value-Added Products
Profitability Boosted by New Ventures in OLED, Automotive, and Battery Sectors

Chunsub Jeon, CEO of Yesun Tech.

"This year marks the first year of our turnaround to profitability. Starting next year, our goal is to become a company with profitability surpassing the KOSDAQ average."

Chunsup Jeon, CEO of Yesuntech, stated in a recent interview with The Asia Business Daily, "The losses we experienced in the past were due to temporary external factors and investments for the future. However, our business fundamentals have now changed," he said, expressing confidence that, "the current state of profitability is not a one-off occurrence but the result of a sustainable structure we have built."

Yesuntech is a company that develops and manufactures functional adhesive material components used in IT devices, automobiles, and the energy industry. These adhesive materials go beyond merely bonding parts; they serve critical roles in shock absorption, thermal control, electromagnetic shielding, and fire spread prevention. The company has established production bases in Korea, China, Vietnam, and Indonesia, supplying products to global clients.

Jeon explained, "In 2021, a fire at a key partner's factory impacted about 30% of our total revenue, and as the COVID-19 pandemic delayed development projects for our overseas clients, our results deteriorated significantly." He added, "Nevertheless, even during difficult times, we did not stop investing for future competitiveness. We built automated production facilities and an AI-based inspection system. By securing new partners and restructuring our main business—the foam pad segment—we established a business structure centered on high profitability."

In fact, the company improved profitability not by simply cutting costs, but by fundamentally improving its operations. The introduction of AI vision inspection systems enhanced quality competitiveness, and the in-house developed gap cutter and automated equipment significantly reduced raw material loss during production. Furthermore, by downsizing the proportion of low-margin products and reorganizing its portfolio around high value-added products, profitability improved rapidly. The ratio of sales and administrative expenses also dropped from 25.0% last year to 19.9% in the first quarter of this year.

These efforts are also reflected in the numbers. Yesuntech achieved a turnaround to profitability starting in the third quarter of last year and maintained profitability for three consecutive quarters, posting operating profit of 830 million won and an operating margin of 7.9% in the first quarter of this year. The company anticipates strong results for the second quarter as well.

Currently, the core of sales lies in the LCD business. In the first quarter of this year, LCDs accounted for the highest proportion at 44.8%, followed by OLED at about 31% and automotive applications at around 15%. While the energy business is still in its early stages, it is expected to become one of the areas with the highest future growth potential.

Speaking about the LCD business, Jeon said, "It may be considered a mature industry, but it serves as a stable cash generator." He continued, "Our foam pad market share within LG Electronics is expected to regain its No. 1 position, and our share among Chinese clients is expanding. This will enable continued stable earnings growth going forward."

He identified OLED and automotive businesses as growth drivers. In OLED, Yesuntech has secured third-generation processes based on its own patents, significantly enhancing the productivity of medium-to-large OLED encapsulants, and has established a production line in Guangzhou, China, completing a global supply system. By responding to a wide range of products, from monitors to ultra-large TVs, the company expects to benefit from the expansion of the premium OLED market.

The automotive business is also growing rapidly. The company supplies adhesive materials for vehicle digital clusters and HVAC displays, and is expanding supply to clients such as LG Electronics, Avomobieo, and global automotive electronics companies. As automotive materials demand high reliability, the entry barrier is high, but once adopted, long-term supply becomes possible. Jeon predicted, "As vehicle displays become larger and increasingly digitalized, the growth rate of our automotive business will accelerate even further."

For its next-generation growth axis, he presented thermal runaway prevention materials for secondary batteries. The 'Flame Barrier Sheet' developed by Yesuntech is a safety material that prevents the spread of battery cell fires to neighboring cells. It offers higher fire-resistance performance than conventional flame-retardant sheets, and is currently undergoing evaluations for mass production application by global battery manufacturers. Jeon said, "As the electric vehicle and energy storage system (ESS) markets grow, the importance of safety materials will only increase." He added, "Starting with initial mass production next year, the secondary battery segment will become a new cash cow for our company, and will generate explosive synergy alongside our existing display and automotive electronics businesses."

He also expressed confidence in the company's financial stability. Early this year, Yesuntech fully repaid 2.5 billion won worth of convertible bonds, eliminating overhang concerns, and made it clear that there are no plans for additional equity offerings or convertible bond issuance. "We now have a structure that allows us to run the company entirely on operating cash flow," he said. "We aim to become a company that grows on internal profits rather than relying on external funding."

Finally, he stated, "I believe the greatest shareholder return is sustainable earnings growth, not short-term dividends." He added, "Major facility investments have already been completed, and now all that's left is to generate profit." Jeon emphasized, "If this year is the first year of financial recovery, the coming period will see a reevaluation of our corporate value. Based on the high-profit structure we have established this year, we will prove explosive profit growth next year as results from our new OLED and automotive electronics pipelines are added."

This content was produced with the assistance of AI translation services.