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Universal Display Teams with EMT to Expand Presence in China

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Universal Display Corporation (OLED - Free Report) recently declared partnership with China-based OLED materials supplier, Eternal Material Technology Company (“EMT”).

Per the terms of the latest OLED host partnership, EMT will manufacture and sell Universal Display’s green, red and yellow host materials to select panel manufacturers based in China. However, financial terms of the deal have been kept under wraps.

Markedly, EMT specializes in volume production and sale of OLED stack materials in China, which favors prospects of the new alliance. Moreover, EMT began construction of OLED materials production in Hefei facility in 2018 with capacity of about 15 tons. EMT anticipates the facility to be operational in 2021.

Management is aiming to address higher demand for OLED materials from China-based clientele with this partnership. Notably, Universal Display is leaving no stone unturned to enhance its phosphorescent emitters with breakthrough research and development (R&D) on its yellow, red and green host materials.

We believe that local partners with complementary business lines will expand Universal Display’s market reach. This will enable the company to analyze demand and pricing parameters effectively. Universal Display is expected to strengthen its presence in OLED industry with similar deals aimed at commercializing OLED host materials.

Strategic Growth Initiatives Boost Optimism

Universal Display is benefiting from robust adoption of its OLED materials, green emitters and red emitters. Moreover, rising demand from panel makers in China is a tailwind. These factors have propelled the company to raise guidance for 2019. Further, synergies from Adesis acquisition are a key positive.



The strong demand fundamentals amid trade-war headwinds and significant presence in OLED industry are boosting investors’ confidence in the stock. Notably, shares of Universal Display have returned 126.5% on a year-to-date basis compared with the industry's growth of 18.6%.

Moreover, the company’s R&D efforts to sustain its position in OLED industry are noteworthy. The company announced partnership with Germany-based Merck KGaA, Darmstadt, to advance research in the OLED domain for development of high performance OLED stacks. These initiatives are expected to aid Universal Display effectively tackle the demand from panel makers.

In fact, new OLED-based product launches from premium handset makers and increasing clout of OLED panels from automakers are expected to accelerate order growth and drive the top line, going ahead.

Zacks Rank & Other Key Picks

Currently, Universal Display carries a Zacks Rank #2 (Buy).

Some other top-ranked stocks worth considering in the broader sector are Anixter International , LogMeIn and Perficient , each flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for LogMeIn, Anixter and Perficient is currently pegged at 5%, 8% and 10.75%, respectively.

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