Nanofilm 3Q update: New product introduction projects to contribute in 4Q21

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In its third quarter business update issued Thursday, Nanofilm Technologies International said it was building up its revenue pipeline, with multiple strategic projects under development and new product introduction projects set to contribute to revenue starting in the fourth quarter.

“Even as the business environment continues to be volatile due to the effects of the Covid‐19 pandemic and supply chain disruptions, the group continues to see growth momentum for its businesses year‐to‐date,” Nanofilm said in a filing to SGX.

Nanofilm said its customer base was becoming more diversified, with revenue contributions from customers other than its largest key customer rising to 39 percent year-to-date from 33 percent prevously.

Advanced materials business unit (AMBU)

The advanced materials business unit (AMBU) has posted mixed results year-to-date due to supply-chain challenges, with the consumer electronics, communication and computers (3C) segment facing short-term disruptions to its customers’ supply chains amid power supply curbs in China, component delays and chip shortages.

“While the underlying demand for the 3C segment remains strong, its typical peak season from June to October has been shifted due to the aforementioned factors to the last quarter of 2021, possibly spilling into 2022,” Nanofilm said.

The 3C segment contributed around 66 percent of year-to-date revenue, with substantial growth from the smartphone category, offsetting a decline in wearables and accessories and computer categories, Nanofilm said.

Nanofabrication business unit

The nanofabrication business unit (NFBU) contributed around 2 percent of year-to-date revenue, Nanofilm said.

“As an important nanofabrication supplier and development partner to its end customers, NFBU continues to work on multiple new projects, such as optical lens and sensory components. In the current quarter, NFBU has commenced mass production of its first micro‐lens array project for new‐generation wearables. This is expected to contribute positively to the performance of NFBU,” Nanofilm said.

Industrial equipment business unit

The industrial equipment business unit (IEBU) posted substantial growth, contributing around 15 percent of year-to-date revenue, with ordres from the precision engineering industry and advanced materials products.

Sydrogen Energy

Sydrogen Energy, a joint venture between Temasek Holdings’ Venezio Investments and Nanofilm, was completed on 1 October and has begun work in Shanghai and Singapore, Nanofilm said, adding the first revenue contribution is expected in 2022.

“To prepare for commercial opportunities in China, Sydrogen is commissioning and installing its initial pilot production line at Nanofilm’s Shanghai Plant 2 for customer qualification in an automotive project involving a key component for a hydrogen fuel cell stack,” Nanofilm said.