Solomon Systech (International) Limited 2007 Annual Results - PowerPoint PPT Presentation

Solomon Systech (International) Limited 2007 Annual Results Announcement 27 March 2008 Hong Kong

Table of contents ! Summary ! Financial Review ! Business Review ! Outlook SSIL 2007 Annual Results Announcement 27Mar2008 P. 2

Summary SSIL 2007 Annual Results Announcement 27Mar2008 P. 3

Results summary ! Unit shipment 173mu ! Sales US$165 million ! Net profit US$10 million ! Basic EPS 3.3 HK cents ! Final dividend per share 2 HK cents ! Total dividend per share for the year 3 HK cents ! Book to Bill ratio 0.64 ! Global market share in mobile phone display ICs around 11% SSIL 2007 Annual Results Announcement 27Mar2008 P. 4

Financial Review SSIL 2007 Annual Results Announcement 27Mar2008 P. 5

Profit and loss Twelve months ended 31 Dec YoY (US$ million) 2007 2006 Change Sales 165.0 254.1 -35% Gross profit 39.5 59.3 -33% Gross margin 23.9% 23.3% Net profit 10.2 22.4 -54% 6.2% 8.8% Net margin (HK cents) Earnings per share* 3.3 7.1 Dividends per share 3.0 6.0 Book to Bill ratio 0.64 1.0 * Basic EPS calculation is based on the weighted average number of shares for the year SSIL 2007 Annual Results Announcement 27Mar2008 P. 6

Balance sheet As at 31 As at 31 YoY Change (US$ million) Dec 2007 Dec 2006 Total assets 202.4 221.1 -8% Total borrowings Nil Nil N/A Shareholders’ funds 172.1 179.9 -4% Net cash 137.8 121.5 +13% (HK cents) Shareholders’ funds per share 55 57 -4% Net cash per share 44 38 +16% SSIL 2007 Annual Results Announcement 27Mar2008 P. 7

Financial remarks Key Factors Sales 35% Unit shipment 25% YoY Blended ASP 14% YoY Net profit 54% Gross profit 33% YoY -- Gross profit margin 23.9% (2006: 23.3%) Operating expense 7% YoY -- Raised R&D 13% while lowered SG&A 19.9% YoY Interest income 27% YoY -- US$8m, partially offset operating income decline US$0.9m Plant / Property /Equipment Capex US$3.5m US$2.6m Strategic Investment SSIL 2007 Annual Results Announcement 27Mar2008 P. 8

Business Review SSIL 2007 Annual Results Announcement 27Mar2008 P. 9

Blended average selling price ! 2007 blended ASP = US$0.95, down 14% YoY ! Sequential decline rate moderating HoH YoY 2.5 Blended Unit ASP (US$) 1.96 50% 2 1.54 Blended ASP Change 1.5 1.5 1.11 0.95 1 0% 1H04 2H04 1H05 2H05 1H06 2H06 1H07 2H07 0.5 0 2003 2004 2005 2006 2007 -50% SSIL 2007 Annual Results Announcement 27Mar2008 P. 10

Unit shipment by product line Mono & Color STN: Declined as more mobile phones switched to m-TFT ! m-TFT: Up 58% YoY as design-wins ramped ! OLED: Up 32% YoY with sustained leadership as the industry stablized ! New Display Applications: Up 63% as design-wins beyond mobile phone ! L-TFT: Kept design-in efforts with target customers ! Display System: First million units shipped ! mono STN CSTN m-TFT OLED New Display System Others mono STN CSTN m-TFT OLED New Display System Others 300 100% Unit shipment distribution 263 IC unit shipment (mu) 250 230 80% 200 173 60% 157 150 40% 100 71 20% 50 0 0% 2003 2004 2005 2006 2007 2003 2004 2005 2006 2007 Note: Others include large panel TFT (L-TFT) driver IC and other IC products SSIL 2007 Annual Results Announcement 27Mar2008 P. 11

Examples of 2007 design-wins New Customers, New Products, New Applications Mobile Display (STN, TFT) OLED Mobile Mobile Bluetooth Automotive mirror with MP4 GPS Phone Phone Earpiece GPS / Radio Locator Display System New Display Microdisplay Wristwatch Electronic Shelf Label Eyewear Study Machine MP4 Digital Photo Frame SSIL 2007 Annual Results Announcement 27Mar2008 P. 12

Outlook SSIL 2007 Annual Results Announcement 27Mar2008 P. 13

1H 2008 Outlook ! Sales year-on-year ! Challenging Book to Bill ratio ! Gross profit margin ! Pressure from market ASP erosion ! Operating expenses ! Under control; Invest in R&D ! Supplement with interest income ! New businesses or customers ! Continue development; take time to ramp SSIL 2007 Annual Results Announcement 27Mar2008 P. 14

Future Growth Enablers Customer, Product and Application Diversification ! Display Panel Mobile Display ! m-TFT ! Audio / Video equipments, Mobile TV GPS GPS, mobile TV ! OLED ! Wireless peripherals, MP4, industrial Bluetooth MP4 Earpiece New Display ! E-paper ! Electronic shelf label, IC card, storage devices Storage IC Card Electronic Device Shelf Label SSIL 2007 Annual Results Announcement 27Mar2008 P. 15

Future Growth Enablers (Cont’d) Customer, Product and Application Diversification ! Display System ! Total system solutions – including multimedia system IC, software, hardware, end product reference design ! Focus applications ! Digital photo frame, portable media player, mobile digital TV, personal navigation device Portable Media Player Personal Digital Photo Frame Mobile Digital TV Navigation Device SSIL 2007 Annual Results Announcement 27Mar2008 P. 16

Thank You Solomon Systech (International) Limited Stock code: 2878 www.solomon-systech.com SSIL 2007 Annual Results Announcement 27Mar2008 P. 17