UIL, a mobile components manufacturer, has moved to sharply strengthen its shareholder return stance alongside expanding into new businesses. The plan is to ramp up communication with shareholders based on the growth foundation built since the recovery in 2022 results.
Accordingly, ahead of the March regular shareholders meeting, UIL plans to cancel all treasury shares except 470,000 shares set aside for employee compensation. Chief Executive Kim Si-gyun of UIL said, "We are preparing a year-end dividend with a dividend yield of 9% this year," adding, "As the company's growth is based on the support of shareholders, we will continue to review shareholder return measures that match that support."
Kim, a former group head at the Samsung Electronics mobile business, has focused on pushing new businesses and process automation since taking office in Mar. 2022. As a result, the company returned to the black in the first year of his tenure, and operating profit has been on a growth trajectory every year since.
Meeting at the Paju headquarters in Gyeonggi on the 25th, Kim said, "We will defend the existing mobile components business while expanding into e-cigarettes and automotive electronics to scale up," adding, "By acquiring an auto parts company, our goal is to join the '1 trillion won in revenue club' within five years."
The following is a Q&A.
-We understand you are supplying SIM trays for Samsung Electronics' initial batch of new smartphones this year. What is the expected revenue from this and what is the status of orders from global clients other than Samsung?
"UIL is participating as the main primary supplier for the entire Galaxy S26 series launched this year by Samsung Electronics, delivering most of the total volume. The SIM tray is a product that integrates high-difficulty processes from metal machining and insert molding to liquid silicone rubber (LSR) waterproof sealing. UIL has solidified its position as a primary vendor based on unrivaled development capabilities and quality competitiveness, and revenue related to this new model is expected to reach about 25% of total revenue.
In addition, we are also a primary supplier for side keys and camera decor, among others. As all product processes at UIL are in-house and we can implement complex process technologies, we continue to receive steady new product development requests and orders from clients.
For the future growth driver of automotive electronics components, we are working with Samsung Electro-Mechanics and LG Innotek, and have secured T, a leading global electric vehicle company, as a final client, among others. We started the business in 2020 and have been building up order items to increase the share of revenue. While we cannot be specific yet, we are also pursuing mergers and acquisitions (M&A) of automotive electronics component manufacturers to expand revenue and product lines.
The e-cigarette sector, a new growth engine, is also nearing visible results. With U.S. Food and Drug Administration (FDA) approval expected in the first half of this year, related revenue is projected to start contributing in earnest from the second half."
-Ultimately, unique R&D capabilities are essential to retain and win global clients. What core research and development areas is UIL currently focusing on, and what are the differentiated technical aims?
"For existing businesses, we focus on efficiency, such as securing cost competitiveness and automation, as well as on quality and delivery, based on core development and manufacturing capabilities. For the e-cigarette business, we formed a dedicated team in 2022 and have been making strategic, focused investments. Development of two new models is progressing smoothly, with mass production planned for the second half of this year. One of these is being considered as a mid- to long-term flagship model by P, a major U.S. tobacco company, making it a business expected to deliver both revenue recovery and growth.
Also, in automotive electronics, as autonomous driving advances, development of camera module components that serve as the human eye is accelerating. In line with this, we are continuously developing so that various sensor module components can deliver optimal performance, based on technologies that ensure functionality, reliability, durability and safety."
-What are the company's mid- to long-term business plans?
"UIL plans to actively pursue M&A in new business areas based on its strong cash holdings. Through this, we have mapped out a roadmap to achieve 800 billion won in revenue in three years and to enter the much-anticipated "1 trillion won in revenue club" within five years.
In the e-cigarette sector, a new growth engine, we are making an all-out effort to win orders for clients' mid- to long-term flagship models. In particular, the next-generation new model with a changed heating method has already secured orders and is nearing mass production. For automotive electronics as well, we plan to maximize synergies with existing businesses by acquiring a leading manufacturer and develop it into a new pillar of growth."
-You purchased 3.5 billion won in treasury shares last year. What are the cancellation plans?
"Even before discussions began on the third amendment to the Commercial Act, the company had been seriously reviewing plans to cancel treasury shares. Of the 1.87 million treasury shares held, we plan to cancel 1.4 million shares in March, excluding 470,000 shares for employee compensation."
-Do you plan to increase dividends further from current levels?
"UIL, once considered a representative high-dividend stock, suffered the pain of suspending dividends from 2020 to 2023 due to COVID-19 and the global economic downturn. However, with a successful turnaround in results, we fully resumed year-end and interim dividends last year. This year as well, we are continuing our shareholder return stance and preparing an exceptional year-end dividend with a dividend yield of about 9%.
-What do you think is an appropriate corporate value or share price for UIL?
"UIL has remained undervalued for a considerable period since peaking in the first quarter of 2024. Although many shareholders view the company favorably, we determined that there were limits to the trading environment in terms of the number of shares in circulation and trading volume. To spur trading activity, we carried out a bonus issue last year amounting to 50% of capital.
It is clearly undervalued for a company with 200 billion won in net worth to have a market capitalization in the 130 billion won range. Our view is that the company's value should at least recover to the level of total net assets.
To that end, alongside the company's development, we will continue to pursue shareholder return policies and rise to become a successful mid-sized company on the KOSDAQ. Including myself, all executives and employees pledge to do our utmost."