Investor Relations

Solomon Systech Announces 2012 lnterim Results Gross Profit Up 30% to US$11.6 million With Gross Profit Margin at 42.2%

Improvements Despite Sluggish Market Conditions

Financial Highlights:



For the Six Months Ended 30 June






(HK$’m equivalent)


(HK$’m equivalent)






Gross Profit





Gross Profit Margin



Profit/ (loss) from core
businesses before the
results of associated
0.4                  3.4  (5.1) (39.6)

Net Profit







  • Sales revenue increased 0.4% to US$27.6 million
  • Gross profit soared 30% to US$11.6 million
  • Gross profit margin increased by around 10 percentage points to 42.2%
  • Profit from core businesses before the results of associated companies was US$0.4 million
  • Net loss reduced to US$1.8 million


(Hong Kong – 21 August 2012) – Solomon Systech (International) Limited (“Solomon Systech” or “the Group”; SEHK: 2878) announced its interim results for the six months ended 30 June 2012 (“1H 2012”). 


In 1H 2012, Solomon Systech recorded sales revenue of US$27.6 million, increased from the same period last year, despite the challenging market resulted from the global economic slowdown. This was mainly attributable to the Group’s effective strategy of focusing on innovative smart products which has raised the blended average selling price of its products, offsetting the drop in shipment quantity during the period. Gross profit margin improved by about 10 percentage points to 42.2% (1H 2011:32.5%), and gross profit soared by 30% to US$11.6 million. Before the results of the associated companies, the Group managed to record a profit of US$0.4 million from core businesses. The book-to-bill ratio stood at 1.1. The Group maintained a healthy financial position, with total cash and cash equivalents and bank deposits amounting to US$53.3 million as at 30 June 2012.


Dr. Humphrey Leung, Managing Director of the Group, said, “Consumer confidence and general market demand was weak in 1H 2012 against a cautious economic outlook. Amidst the challenging market, the Group attained improvements which best proved that our shift in business focus to higher-growth smart product applications has been effective. The Group has secured more design wins as well as new customers, fuelling our future growth.”


Business Review

The Group shipped a total of approximately 46.0 million display IC units during the period under review, a year-on-year decrease of 15%. The unit shipments of Mobile Display products during the period decreased due to a decline in demand for driver ICs supporting lower resolution devices and a shortage of panels for tablets. However, The Group has made progress in shifting the focus of the Mobile Display unit to higher-growth high resolution smartphones and tablets. A number of the world’s top-tier smartphone models have incorporated the Group’s high speed display interface controllers. The Group has closely collaborated with world leading suppliers on design-in projects on new products to capture the rising demand for its high resolution TFT driver ICs and high speed display interface controllers. It has also secured a number of design wins for its capacitive touch panel drivers.


For Advanced Display business unit, the e-paper display business saw a satisfactory growth of 13% year-on-year, as the Group secured a number of world-leading electronic shelf label makers as customers and enriched its e-paper product portfolio by securing design wins from new customers and for new applications. As for the Large Display business, the Group entered into a master agreement with Nanjing CEC Panda LCD Technology Co., Ltd (“Panda-LCD”) in March 2012 in relation to the sale of the Group’s driver ICs to Panda-LCD. Volume shipment started in April, contributing to the Group’s sales revenue and enriching its customer portfolio.


The unit shipments of the Display System Solution business unit surged 105% year-on-year, driven by a strong growth in demand for the Group’s multimedia processors for the pico-projectors and pocket-projectors, as well as its display controllers for advanced 3D active shutter glasses. During 1H 2012, the Group has strengthened its position in the projector market, as it garnered additional design wins for pico projector and pocket projector applications, and jointly developed with its business partner the world’s first 3D dual-LCoS mini projector.


At the same time, the Group has secured a number of design wins in LED power modules for retrofit lighting, industrial lighting and smart lighting in the Green Power business unit, which further broadened its customer base in these emerging applications.


In the past six months, the Group had three patents granted in relation to touch panel operation, backlight control and color display enhancement, and one patent filed for a specialized TFT-LCD driver. Many intellectual properties targeted at smartphone applications were developed or under development during the period.




Stay Focused on Smart Product Applications to Drive Growth

Following the progresses made in the first half of the year, Solomon Systech will stay focused on high-growth, high-demand product applications including smartphones and tablets, smart TVs and smart devices in 2012. In particular, the Group sees growth potential in high resolution smartphone applications, smart projectors and the e-paper display in the second half of the year.


The Group has set up a Mobile System Solution Centre which provides customized engineering services and sales support for smartphone and tablet customers to enhance market outreach to these segments and drive sales growth. It is also collaborating with leading panel makers in China to develop AMOLED display ICs for smartphone applications to strengthen its position in the rapidly growing China smartphone market.


With the design wins in leading smart projectors secured in 2011 and 1H 2012, the Group expects to further increase its unit shipments in 2H 2012, and extend its customer and geographical reach. It also plans to enrich its product offerings with 3D display technology.


The Group is also expanding into other smart devices with high growth potential. In addition to launching new products targeting high potential electronic shelf label applications such as warehouse management, the Group also plans to strengthen the LED lighting business by introducing additional smart LED lighting and industrial lighting solutions and technologies, as well as extending the applications of its PMOLED display ICs and multimedia processors to tap market demand.


“The Group remains cautious about the highly volatile global economy but sees opportunities in the market of smart product applications. Given the improvements achieved in the first half of the year, we are determined to continue with our growth-driving strategy of strengthening our outreach and foothold in these targeted growth segments. We are ready to introduce more innovative and high-quality products and system solutions to our customers to build future success.” concluded Dr. Leung.


– End –




About Solomon Systech (International) Limited

Solomon Systech (International) Limited and its subsidiaries as a Group, is a leading semiconductor company providing IC products and system solutions that enable a wide range of display applications for smartphones, smart TVs, smart projectors and other smart devices including consumer electronics products, portable devices, industrial appliances and green energy applications such as LED lighting.


Solomon Systech (International) Limited’s shares have been listed on the Main Board of The Stock Exchange of Hong Kong Limited since 8 April 2004 (stock code: 2878).


More information about the Group, its products and services may be obtained at


For Enquiries:

Solomon Systech (International) Limited

Strategic Financial Relations Limited
Jessica Lee

Tel: (852) 2207 1672


Veron Ng

Tel: (852) 2864 4831


Agnes Luo

(852) 2864 4851




Consolidated Income Statement (for the six months ended 30 June 2012)



  Solomon Systech (International) Limited

 Condensed Consolidated Interim Income Statement

For the six months ended 30 June 2012









Cost of sales



Gross profit



Research and development costs



Selling and distribution expenses



Administrative expenses



Other income





Finance income – net 1,824 153
  445 (5,115)
Share of results (include fair value change of derivatives) of associated companies   (2,269) (64)

Loss before income tax



Income tax expense



Loss attributable to the equity holders of the Company



Loss per share attributable to the equity holders of the Company:

(expressed in US cent per share)