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(Hong
Kong - 27 July 2004) - Solomon Systech
(International) Limited ("Solomon Systech"
or the "Group", SEHK: 2878), a leading flat
panel display IC company providing one-stop display IC
solutions for high tech products, today announced its
interim results for the six months ended 30 June 2004.
This is also the Group's first set of interim results
since its successful listing on the Main Board of The
Stock Exchange of Hong Kong in April 2004.
For
the period under review, the Group's turnover
increased by 137% to US$110.1 million (HK$854.4
million), as compared with the same period last year.
The growth was mainly attributable to the Group's
success in gaining market share and marketing and
sales of more colour display ICs. Net profit increased
by 139% to US$22.9 million (HK$177.7 million) while
net profit margin was maintained at over 20%. Higher
operational efficiency was the major force behind the
significant growth in profitability. Basic earnings
per share grew by 117%, were recorded at US1.01 cents
per share (HK7.8 cents per share).
The
Board of Directors proposed an interim dividend of
HK2.6 cents per share for the six months ended 30 June
2004.
The
Group's Managing Director, Mr. Humphrey
Leung, said, "Our listing in Hong Kong is an
important milestone of the Group's business
development. We have posted another strong year with
turnover and profits both growing significantly,
bolstered by a 126% YoY increase in shipments. We are
able to introduce the right products at the right
time, matching the strong demand for cellular phones
and portable devices, as well as capturing the
opportunities brought about by the transition from
monochrome to colour displays. Our success in
increasing market share is another brick in fortifying
our position as a global leader in display IC
solutions. We are excited about the tremendous
potential of flat panel display ICs going
forward."
Total
shipment of display ICs in the review period was 65.1
million units with the majority being used for mobile
applications, compared with 28.8 million units in
2003. According to Gartner's forecast in June 2004,
global shipments of cellular phones for 2004 are
expected to exceed 600 million units. The Group
believes, on average, one out of six cellular phones
is using its proprietary display ICs. Among its
products, monochrome STN display ICs shipments grew
39% to 28 million units during the review period. On
the other hand, shipments of colour STN (CSTN) display
ICs reached 28.8 million units, a remarkable increase
of 311%. OLED display ICs also saw phenomenal growth,
increasing 380% YoY to 7.2 million units.
Encouragingly, the Group began mass production of
colour OLED and mobile TFT display ICs. The Group has
scored initial successes in these two areas and
believes they will significantly contribute to the
Group's financial performance in the future.
The
Group's well-established relationships with its
customers continued to provide a solid groundwork for
future growth. Currently, the Group serves more than
50 global display module makers and believes its
display IC products are used by the global end product
brand names, such as, BenQ, Bird, DBTEL, LG, Motorola,
Panasonic, Pantech, Quanta, Samsung, Siemens, Sony
Ericsson, TCL and UTStarcom.
To
reinforce its competitiveness in the market, the Group
is committed to continuously focusing on research and
development. In addition to driving the Group's
technology advancement to 0.18µm for high
integration graphic and multimedia processor, the
research and development team was also designing a
number of mixed mode IC products for mobile display,
large display and new display.
Going
forward, the Group is optimistic about the prospect of
advanced display IC solutions and its continued
leadership in the market. The first half yearly book
to bill ratio was 1.4, indicating a strong growth of
the Group's business in the second half of the year.
As at 30 June 2004, the Group had abundant backlog
orders on hand for shipment in the next few months.
Taking those in consideration and also the Group's
successful new product launches, the Group is
optimistic about the financial performance of the
whole year 2004.
In
respect of mobile display, the Group will spend more
resources to speed up the time-to-market of its colour
display ICs for the mobile application market. Apart
from the mass production of colour OLED and mobile TFT
display ICs, the Group will also enlarge its product
portfolios with more high value and multifunction
display ICs. On the other hand, the Group has been
working closely with several world-class large panel
module manufacturers on new large display IC products.
The products are under internal qualification and the
first shipment is expected in the next 12 months.
To
stay ahead in the market, the Group is also focusing
on new display technology development. The Group is
cooperating with leading technology companies and
realizing commercial applications of micro display and
e-paper. Such innovative applications with the latest
display technology will soon be announced.
Mr.
Leung concluded, "We will continue to focus on
new product development, invest in securing production
capacity and build the necessary infrastructure to
cope with the business growth. Apart from these, the
Group is also committed to good corporate governance
and corporate citizenship. We are confident of
maintaining our leadership in display solutions and
creating value for our shareholders."
During
the review period, the Group's capital expenditure was
approximately US$6.1 million (HK$47.3 million) (2003:
US$1.6 million / HK$12.4 million). A majority of which
was spent on the purchase of critical packaging and
testing equipment (in cooperative arrangement with
contract manufacturers) for the securing of production
capacity. As at 30 June 2004, the Group had US$125.4
million (HK$973.1 million) of net cash (i.e. cash and
cash equivalents less bank loans) of which
approximately US$91 million (HK$706 million) was the
proceeds from the IPO in April 2004. As of 30 June
2004, the Group had no borrowings.¡@ |
