|
(Hong
Kong - 9 March 2005) - Solomon Systech
(International) Limited ("Solomon Systech"
or the "Group", SEHK: 2878) achieved a
phenomenal year in 2004 with respect to both turnover
and net profit growth.
For
the year ended 31 December 2004, its turnover
increased by 182% to US$308.2 million (HK$2,404.0
million). The growth was significant and proved that
the Group's strategic direction of focusing on color
display ICs, enlarging customer base as well as
increasing market share was paying off. By the same
token, gross profit also grew to US$96.6 million
(HK$753.5 million), an increase of 110% year-on-year.
As the Group intentionally set an aggressive and
competitive pricing strategy to gain more market
share, the gross profit margin for 2004 was 31.3%,
compared to 42.1% in 2003.
Net
profit for the year was US$59.2 million (HK$461.8
million), representing a remarkable increase of 161%
over the previous year. Basic earnings per share for
the year grew by 127%, recorded at 2.48 US cents per
share (19.3 HK cents per share). The Board of
Directors proposed a final dividend of 12.0 HK cents
per share.
The
Group's financial position remains strong and healthy.
Net cash flow from operations during the year was
US$39.4 million. As at 31 December 2004, its net cash
position stood at US$125.3 million, and had no
borrowings.
Mr.
Humphrey Leung, Managing Director of Solomon Systech,
said, "Fiscal 2004 was a record year for Solomon
Systech. We did not only achieve notable growth in
turnover and profit, but had also further increased
our market share in mobile phone display IC to roughly
16%, assuming 30% of global mobile phones had dual
displays and a total of 680 million mobile phones were
shipped. At the same time, we are very proud of a
great number of awards granted by various entities,
ranging from customers, semiconductor industry, to the
investment community."
Last
year, Solomon Systech shipped 157.0 million units of
display ICs, a growth of 121% year-on-year. The driver
for the spectacular growth was the popularity of the
Group's color display ICs. Among its products,
shipment of color STN display ICs rocketed by 337% to
88.2 million units. The growth was attributable to new
products launched and dedicated customer support,
right pricing and time-to-market. Another encouraging
achievement was the volume shipment of 7.1 million
units of TFT display ICs, which were commercially used
in top brand mobile phone. While OLED display ICs
achieved a very healthy growth of 127% to 14.1 million
units with the surging demand for MP3 players
globally. Monochrome STN display ICs, despite a
slowing demand in the market, still rose by 6% to 47.1
million units. Due to the change in product mix, as
more color display ICs were shipped in 2004, the
blended average selling price of the Group's products
increased from US$1.54 in 2003 to US$1.96 in 2004.
There
were encouraging progresses in new products and
customers. 16 new products went into production last
year. Backed by its extensive sales network and
all-round customer services, the Group further
enlarged its customer base. For instance, the number
of customers with more than US$1 million business with
the Group increased from 11 in 2003 to 28 in 2004. At
present, the Group serves more than 70 module makers
globally.
Solomon
Systech takes research and development capability as
one of its core competences. In 2004, its R&D
expenses amounted to roughly US$11.6 million. The
number of R&D staff increased to more than 120 as
at the year. On the front of wafer technology, the
Group uses various wafer process geometry up to
0.18µm, with a majority portion of ICs in
production belongs to the 0.25µm or 0.35µm
category. Four patents were filed and six technical
articles were published last year.
Looking
ahead, the management is optimistic about the business
outlook for 2005. Its three product families will see
different growths.
For
mobile display products, TFT display will emerge
strongly given its increasing popularity, while
monochrome display will experience a decline in unit
shipment. Conventional color STN display will be kept
in good position and OLED display may take more time
to become popular in mobile phones.
Volume
shipment for large panel display driver ICs will be
delivered in the first half of 2005. These ICs will be
used in LCD TVs, LCD monitors and notebook computers.
Benefiting from the sizeable market, the Group will
enjoy immediate financial contributions from the large
display IC business; meanwhile, this action will pave
the way for the Group to tap into the significant
digital broadcasting opportunity in the future.
To
keep abreast of new display applications, Solomon
Systech is dedicated to development of new display
ICs. In late 2004, it had successfully launched
e-paper driver controller IC. At the moment, it is
exploring business opportunities in flexible display
product that may find its home in the retailing and
logistics sectors.
Commenting
on the future, Mr. Leung said, "Gaining market
share and achieving earnings growth are undoubtedly
the focus of the Group. In order to attain these, we
will launch more new products and secure more new
customers."
"We
have proven our leadership and success in the global
mobile display IC market. For the time to come, we
will explore business opportunities in MP3 players,
digital cameras, large display and new display areas.
Given our solid foundation and professional industry
talents, we are confident in creating valuable IC
products to our customers and therefore enhancing our
continuous business growth, which ultimately will
translate into fruitful returns to shareholders."
Mr. Leung concluded.
|
