Welcome to Yiyi First Quarter 20 21 Earnings Conference Call. Today's speaker is Chairman, Mr. Johnson Li CFO, Mr. Lloyd Chen and Finance Director, Mr. Patrick Zhang.
All participants are currently in a listen only mode. After the presentation, there will be a Q and A session. A WebEx replay will be available after today's conference. Please visit tw.in.com under the Investor Relations section. We now proceed with the conference.
Good day, everyone. My name is Lord Chen. Welcome to E, Inc. Q1 earnings conference. Before we start, please take a quick look at the Safe Harbor statement.
Thank you. Okay, next page. All right. Firstly, I would like to talk about briefly talk about the Q1 results. Fee, Inc.
Q1 2021 on sales revenue was around RMB4.4 billion and that led to the operating profit nearly $1,000,000,000 specifically, it's $968,000,000 and the net income was around $1,200,000,000 and EPS, dollars 1.03 The sales revenue and operating profit and the net income for Q1 was the best Q1 in the past 8 years. However, you may notice there was a decrease, slightly decreased non operating income due to the less exchange gain in the Q1 for 2020 more. And that's for the P and L for Q1. Next page. Talking about the operating profit, the Q1 operating profit With 14x growth year over year from RMB45 1,000,000 to RMB968 million due to the strong demand from the market through e reader, eNote, Retail and Finance, yes.
And for those balance sheet items, I would like to specifically focus on the asset side. Basically, from the screen, you can see there was a positive increasing trend on cash assets and then total assets and even the net assets value. Okay. Next page. For the cash flow, Our cash flow was decreased from $13,000,000,000 to RMB10.8 billion because we converted cash for more financial investments And also for CapEx, of course, to meet the strong market demand.
As you can see from the Screen, the total financial assets and plus cash was increased to around RMB30 1,000,000,000 by Q1 of this Yes. That's for the cash flow part. Okay. After I just went through those On financial items, I would like to talk about Color Technology again. With the continuous efforts in R and D for Color e paper, We have launched 3 complete Color E paper technologies that are very much suitable for different smart fields.
First one, once again, is the Cliloplast. We also call it print color e paper. So I'm using basically the color filter technology and RGB color mixing principle. EPaper is converted from black and white into 4,000 and i6 rich colors, Inclido plus feature an improved trend line when it's turned on, In Klayo Plus creates unsaturated image from 3x the color gamut over the previous generation Even with more warmer colors. At the same time, the new generation of collider has the capability to play animations and videos with e ink products, providing new Options to educational and professional devices, especially very helpful on the digital learning.
And the next one is on the e ink spectra, 3,100, Basically, full color e paper technology. And this is our newest generation of spectra, basically utilizes on 4 color particles, black, white, red and yellow. And Spectra's 3,100 features high resolution and high saturation color, which displays on which content. It can be used in DSL or promotional signage. The flashing when changing the image even brings eye catching effects for the retailers during the event promotion.
And last but not least, e ink gallery Advanced on the color e paper ASAP in galleries based on On full color e paper display technology, full type of color electronic ink particles I used to achieve the full color gamut on display by dynamically combining and mixing the particles Through voltage control, the paper like texture of e ink gallery offer The visual effect of printed posters are making it suitable for public information display, Commercial signage and digital display carriage for art galleries, museums In Touch Taiwan a few weeks ago, the 13.3 inches 25.3 inches in Gallery Products World Display. And the 13.3 inches Color e paper signage system Was also introduced into Pao Yuan International Airport in Taiwan, Terminal 2, for use by the taxi fleet to promote pandemic prevention information. So that's about our color technology. Next page. The next page is about the ePaper Alliance we just set up, eInc and BOE and Holy Tech Shortly launched the establishment of the Electronic Paper Industry Alliance being abbreviated as APPEA, where it's located in Shanghai.
Quite a few key Chinese and Taiwanese Companies such as Lenovo, Hisense, TPV, Tencent and MediaTek, Inventech, InnoLocks Joint. The purpose of the API is to build up a better platform for e paper ecosystem and will utilize the platform to expand The e paper applications shown on screens. So as you can see from the screen, Smart transportation, smart airport, smart education, smart factories, smart logistics And even smart retails and 2 smart office hospitals, so the members in APPEA Can explore more business opportunities. Currently, there are more than 60 companies joined so far, Most of them from China because they do see the green concept requested from the China government, which will trigger the demand of e paper products. 100 companies to be expected by end of this year and I'm being double up on more than 200 companies for next year.
So that's about the alliance, ePaper Alliance, which is For the ESG, we have been continuously working on the ESG and Sustainability. Basically, ESG performance nowadays is an essential element for international investors. Those investors care about not only finance performance of the company, But also on ESG performance. Being our core product is the paper, So which is expected to replace conventional paper so that the product features such as low power consumption, Those outstanding, easy on eyes and sunlight visibility, all reflect All being reflected in the United Nations SDG goals, such as good health and will be well green on quality education, affordable and clean energy. And such ongoing product as a fundamental to the environmental perspective, We estimate that our product enables the reduction of 230,000,000 tons of CO2 in the past 5 years.
And Yink, Inc. Also devoted in purchasing Taiwan Renewable Energy Certificate, creating solar energy and protecting water resource by water withdrawal reduction. From a social perspective, we Yigink established an internal Yigink University of the global training platform. And we also sent the spotlight employees and talents to join our Stanford lead business program. He also conducts the multiple years of lasting projects, e breather for the future, especially in Taiwan to establish the library for schools in remote areas.
Yi Inc, as a member of UNGC, also joined young SDG Innovation Program to deliver ESG From the corporate governance perspective, The increase is rated as top on 20% among private exchange listed companies our corporate governance evaluation for 4th consecutive year. We won multiple awards from TCSA. And we are also listed on the final list of the Global Vision Magazine CSR Awards. Unfortunately, that We didn't win the award, but he has been somehow recognized for efforts and achievement in terms of the ESG. There's one just launched index named on Taipei Exchange ESG on IT and Link Total Revenue Index and selected us, E, Inc, as one of The 10 constituents, which should be appreciated considering Our ESG efforts and also profitability capabilities.
So that's our ESG and Sustainability Achievement. Thank you. And further, I would like to expand more For the Taiwan Index Plus, Basically, that's an index company, very famous one, I mean, Taiwan Customize Taipei Exchange, ESG IT, Elite Total Return Index is compiled by selecting 10 Taipei Exchange Listed Electronic Companies, which fulfill criteria of financial indicators and also market capitalization. Kousuchins are weighted according to their free float adjusted market capitalization. Performance of the Taipei exchange listed electronic companies That are sustainable and representative, and Yi Yin was honored to be one of them.
That's for the index ID extension. And we also have one achievement on the clean energy, I think, being done Last week, and we are the 1st company contracted and we have accomplished 10% installed renewable energy in Taiwan. And basically, in order to meet the compliance in our We accomplished that we acquired the enough income funds. So that's for Yes, Gee, on the IT and Total Return Index and the Clean Energy.
And
One more thing I would like to mention. Last week, we extend ePaper to the non display application. YIGINK becomes the largest strategic shareholder in Nucera through the spin out of digital Michael, please speak. Let me just briefly introduce this company, Nuclera. It's a company, a fast growing biotech company, developing protein and gene synthesis technologies.
Combining the technologies between nuclei and ink, that will enable the delivery of The revolutionary desktop for team in gene, bioprinter with breakthrough speed and convenience for researchers in human health, agriculture and other markets of the global importance. Nucera has been working on a strategic partner with us since 2018 to deploy Nucera's proprietary on Stylosynthesis Technologies on E Ink's digital microfluid Devices. Instead of the physical channels found in conventional microfluidics, Digital microfluid uses electronic signals to guide the micro droplets And when combined with Nuclera on biosynthesis, this advanced Chief Technology for the entire user in a single day to digitally program the bioprinting Of the proteins and genes of a desktop device. The result is about a printer that gives unprecedented access to biology. Those Products will be commercialized, being expected in 2022.
So to be short, with our technology and new Clearbus technology, the combined technology can basically shorten the protein and gene synthesis process from month to days. So that's our achievement to expand our technology to the non displaced field. Next page. Okay. So last but not least, as explained in the previous quarter, we started Capacity expansion for future growth, 4 additional epayton production lines and the Board just approved The Xinyu, our new building, basically, is on the planning for the factory and office.
And let's definitely express our preparation for the future growth. We do feel the strong e paper demand, which is higher than our supply. Therefore, how we can better manage our supply chain and ePaper Capacity to realize those higher demand into sales revenue will be our key focus in the second half and even next year. So that's about my update for the Q1. So we can move to the Q and A session.
Thank you.
We are now in the Q and A session. When we take your questions, please remember to unmute yourself. You can also ask questions through text in the question box on the side bar.
Hi, Jerry. I saw your question again. I thought you were And our Chinese investor conference, but I guess you're joining our English one. Yes, so driver IC constraint, I think it's a worldwide problem, and we're trying the best we can try to resolve it. As you know, currently, our demand is a lot larger than
what we can supply,
not just on our EA material side, which we sell mostly to our module partners, module ecosystem partners. But on our old module, we couldn't get enough Driver IC. I think the last part is it's less of a concern, but more on the driver IC side. Well, we do see week to week improvement on the ICs and glass in terms of supply. So Hopefully, it will get better.
It's hard to say because the current market situation changes a lot. But we think, Yes. We just have to see a week on a weekly basis. Okay. Your second question is, if Taiwan goes to level 4, how will that impact your operation?
Definitely, it will impact our operation because we do make E Ink materials in our Minko factory. It will cut down in terms of how much we can produce, but it's really up to the government policy What is allowed and what is not allowed. So we really have to see the latest government protocol
to have a better assessment.
Another question by Robin YY were to sell software at Y2Y in April of 2021. Both the company provide guidance for Q2 of 2021. I think for Q2 2021, it should be about the same as Q1 2021. The demand is actually stronger in Q2, but because we couldn't get enough Our supply chain is short on IC and some TFTs. So we couldn't ship enough.
So Q2 should be about the same as Q1? Yes, in
terms of sales revenue. And we don't see further questions. So thank you for your participation today, and talk to you soon for next our next quarter.