Epistar Releases OEM Orders; Formosa Epitaxy's Monthly Revenue Expected to Double

　　Epistar and Formosa Epitaxy are demonstrating a highly efficient merger. Starting in July, Epistar has released OEM orders to Formosa Epitaxy. Epistar estimates that after the merger of the two companies, Formosa Epitaxy's monthly revenue could increase significantly from the current NT$400 million-plus to nearly NT$800 million, with gross margins also rising substantially. The positive effects of the merger far outweigh the impact of equity dilution.

　　Since Epistar announced its merger with Formosa Epitaxy on the 30th of last month, the three major institutional investors have net-bought a total of 11,999 thousand shares of Epistar over four consecutive trading days, while also purchasing a total of 31,196 thousand shares of Formosa Epitaxy during the same period, strongly supporting the merger of the two leading LED epitaxy manufacturers.

　　Epistar's Vice President and Spokesperson Zhang Shixian stated on the 6th that the most important focus of Epistar's merger with Formosa Epitaxy is "market immediacy." Epistar's recent customer orders have been strong, with a production capacity gap of up to 35% this quarter. Therefore, starting from July, Formosa Epitaxy has begun OEM manufacturing for Epistar, with even greater OEM volumes in August and September.

　　Canun Chairman Jian Fengren said that the average unit price of Epistar's OEM orders to Canun is better than the price Canun receives on its own orders, which is a great help to Canun. It is understood that when Canun's production capacity is fully loaded, its monthly revenue is approximately NT$400 million to NT$500 million. Through Epistar's assistance in adjusting manufacturing processes and other means, Canun's monthly full-load revenue could surge to NT$700 million to NT$800 million. Compared to when Canun previously operated as a single company, the estimated growth rate could reach 40% to 100%.

　　After Epistar takes over Canun, it will also enhance Canun's profitability. Canun is currently in loss, with a negative gross margin. Epistar's goal is to raise Canun's gross margin to 10% to 15%, helping Canun turn losses into profits. Institutional investors expect that, driven by positive factors such as revenue increase, the integration of both parties eliminating unnecessary duplicate investments, and reduction of management, sales and R&D expenses, Canun's operating expenses as a proportion of total revenue is expected to drop from the current 15% to 20% to 6%, turning the operating profit margin positive. It is estimated that Canun will soon be able to start making money.

　　Zhang Shixian stated that Canun and Epistar have complementary customer effects. In the future, Canun will maintain its own brand sales, and Canun will also bring benefits to Epistar. Therefore, this merger will bring very positive benefits to both companies.