Solomon Systech (International) Ltd. · HKEX:2878
Solomon Systech (International) — FY2006 Earnings Presentation
19 slides from Solomon Systech (International)'s earnings presentation, Mar 26, 2007
Slide 1: 2006 Annual Results Announcement
Solomon Systech (International) Limited 2006 Annual Results Announcement 26 March 2007 Hong Kong
Slide 2: Table of contents
www.solomon-systech.com Table of contents • Summary • Financial review • Business review • Outlook SSIL 2006 Annual Results 26 Mar 2007 P. 2
Slide 3: Summary
www.solomon-systech.com Summary SSIL 2006 Annual Results 26 Mar 2007 P. 3
Slide 4: Results summary
www.solomon-systech.com Results summary • Annual IC unit shipment 230mu • Sales US$254 million • Net profit US$22.4 million • Basic EPS 7.1 HK cents • Final dividend per share 4 HK cents • Total dividend per share for the year 6 HK cents • Global market share in mobile phone display ICs ranged 16 -1
Slide 5: Financial Review
www.solomon-systech.com Financial Review SSIL 2006 Annual Results 26 Mar 2007 P. 5
Slide 6: Profit and loss
www.solomon-systech.com Profit and loss Twelve months ended 31 Dec YoY (US$ million) 2006 2005 Change Sales 254.1 394.1 -36% Gross profit 59.3 119.6 -50% Gross margin 23.3% 30.3% Net profit 22.4 76.3 -71% Net margin 8.8% 19.3% (HK cents) Earnings per share* 7.1 24.3 Dividends per share 6.0 19.0 * Ba
Slide 7: Balance sheet
www.solomon-systech.com Balance sheet As at 31 As at 31 YoY (US$ million) Dec 2006 Dec 2005 Change Total assets 221.1 270.3 -18% Total borrowings Nil Nil N/A Shareholders’ funds 179.9 207.0 -13% Net cash 121.5 162.7 -25% (HK cents) Shareholders’ funds per share 57 66 -14% Net cash per share 38 52 -2
Slide 8: Financial remarks
www.solomon-systech.com Financial remarks Key Factors Sales 36% Unit shipment 13% YoY Blended ASP 26% YoY Net profit 71% Gross profit 50% YoY -- Gross profit margin 23% (2005: 30%) Operating expense 17% YoY -- US$1.4m provision for investment impairment Capex US$16m US$9m Plant / Property /Equipment
Slide 9: Business Review
www.solomon-systech.com Business Review SSIL 2006 Annual Results 26 Mar 2007 P. 9
Slide 10: 2006 business recap
www.solomon-systech.com 2006 business recap • Shipped 230mu, primarily mobile display driver IC – 1H06 unit shipment grew 16% YoY – 3Q experienced unusual demand drop – 4Q returned to seasonal pattern (2nd highest quarterly shipment) • Enhanced competitiveness for future growth – Technology leadersh
Slide 11: Unit shipment by product line
www.solomon-systech.com Unit shipment by product line • Mono & Color STN: Leadership maintained • m-TFT: Dragged by slower than expected ramp among design-wins • OLED: Set back by customer exits and MP3 player’s use of lower cost solutions • New Display: Shipped >10mu bistable driver IC for E-paper
Slide 12: Blended average selling price
www.solomon-systech.com Blended average selling price • 2006 blended ASP = US$1.11, down 26% YoY – Sequential decline rate stabilized 1.96 HoH YoY Blended Unit ASP (US$) 2.0 1.54 1.50 50% 1.5 Blended ASP Change 1.11 1.0 0% 0.5 1H04 2H04 1H05 2H05 1H06 2H06 - 2003 2004 2005 2006 -50% SSIL 2006 Annual
Slide 13: Examples of 2006 design-wins
www.solomon-systech.com Examples of 2006 design-wins Mobile Display (STN, TFT) OLED Bluetooth Mobile Watch with GSM Mobile MP4 Notebook with Notebook with Phone Compatibility Phone Sideshow Sideshow New Display Display System Automotive AV Study Machine – Console – Graphics Mobile Wristwatch VGA Eye
Slide 14: Outlook
www.solomon-systech.com Outlook SSIL 2006 Annual Results 26 Mar 2007 P. 14
Slide 15: Future Growth Enablers
www.solomon-systech.com Future Growth Enablers New Customers, New Products, New Applications • Mobile Display – STN ! Minimize cost and target more top-tier brand names – m-TFT ! Leverage MIPI to establish closer ties with brand names as well as module makers – OLED ! Launch products for mobile disp
Slide 16: Examples of New Applications
www.solomon-systech.com Examples of New Applications Mobile Display (STN, TFT) OLED Bluetooth MP4 Mobile TV GPS DECT Phone Earpiece New Display Display System Digital Photo GPS Microdisplay for IC Card Price Tag Memory Card Frame Games SSIL 2006 Annual Results 26 Mar 2007 P. 16
Slide 17: 2007F Outlook
www.solomon-systech.com 2007F Outlook Market • Mobile phone market moderate growth ~10% YoY • 1H07F demand aligns with typical business seasonality • New volume display applications emerge Products • Expanding products portfolio • Developing design-ins outside mobile phone business Customers • Impro
Slide 18: General Views on 1H 2007
www.solomon-systech.com General Views on 1H 2007 • Unit shipment growth year-on-year – Challenging • Sales growth – Subject to product mix and ASP uncertainty • Gross profit margin – Still under pressure with market ASP erosion • Operating expenses – Overall under control, keep investing in R&D • Ne
Slide 19: Thank You
www.solomon-systech.com Thank You Solomon Systech (International) Limited Stock code: 2878 SSIL 2006 Annual Results 26 Mar 2007 P. 19
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