Solomon Systech Registers Strong Growth in Unit Shipments and Sales in 2015

 Financial Highlights:

 

	For the year ended 31 December
	2015		2014		Change
	US$’m	HK$’m equivalent	US$’m	HK$’m equivalent
Shipments (million units)	186		115		+62%
Sales	70.9	549.5	60.1	465.6	+18%
Gross Profit	23.2	179.9	20.8	161.2	+12%
Gross Margin	32.7%		34.6%		-1.9pts
Net Loss	6.4	49.9	3.0	23.3
Loss per share	0.26 US cent	2.02  HK cent	0.12 US cent	0.95  HK cent
Book-to-bill Ratio	1.1		1.1		maintain

 

(Hong Kong – 23 March 2016) – Solomon Systech (International) Limited (“Solomon Systech” or “the Group;” SEHK: 2878) managed to accelerate its growth momentum from 2014 to achieve a strong year-on-year growth in both total unit shipments and total sales.  Book-to-bill ratio of 1.1 is also a positive indicator for continuous business growth.

 

In 2015, the Group’s shipment volume leaped by 62.0% to approximately 186 million units, mainly contributed by an increase in shipments in the Advanced Display and Large Display businesses.  Sales rose 18% year-on-year to US$70.9 million.  Gross profit rose 12% to US$23.2 million.  Due mainly to additional investment in new products and technology, and additional provision of net unrealizable fair value loss from the investment in the FVTPL portfolio, the gross margin decreased by 1.9 percentage points to 32.7% and a net loss of a net loss US$6.4 million was recorded.

 

Business Review

 

Dr. Humphrey Leung, Chairman of Solomon Systech, said, “In the past few years, we have adopted the strategy of focusing on high growth, high volume business areas.  We have been investing to strengthen our technological capability and expanding the product and application portfolios of our key products.  These initiatives have started to bear fruit and become our growth driving forces.  We are well positioned to move full speed ahead to our next phase of growth.”

 

In 2015, Advanced Display business achieved a total unit shipment of 131.6 million units, jumped by 91% year-on-year.  The strong increase was due to the Group’s success in capturing the wearables market which has expanded exponentially, and in further expanding the product and application portfolios of both its OLED and bistable products.

 

As the market leader of PMOLED display driver ICs, it has achieved cumulative shipments exceeding 500 million IC units up till 2015.  On AMOLED technology, the Group has successfully launched its first AMOLED display driver IC for HD720 smartphone panels with pilot production starting at the end of 2015.

 

For the Mobile Display business, the TFT In-cell touch display driver IC (TDDI) for FWVGA panels has been adopted by a renowned smartphone brand and started mass production in Q4 2015.  Design of In-cell touch display driver ICs for HD/FHD panels has also commenced at the end of the year.  TFT display driver IC for HD/FHD/QHD IGZO panels targeting the China smartphone and tablet markets had samples ready as well at the end of the year for design-in projects.

 

For the Mobile System business, one of its Out-Cell touch panel controller IC achieved design wins with world renowned brands’ tablets in 1H 2015 and started mass production in Q3.  Another Out-Cell touch panel controller IC targeting larger display panels has been qualified for Windows 8/10 and designed-in within leading notebook brands.

 

Last but not least, the Large Display business attained substantial growth in 1H 2015.  The Group achieved a year-on-year increase of 17% in total annual shipments to 30.6 million units.

 

Prospects

 

Capitalizing on Strong Potential Markets, New Technologies & Fast Growth Applications

 

The Group will continue to develop new technologies and products with strong potential and expand footprint in fast growth markets and application segments.

 

China is a key market offering immense opportunities for the Group.  Solomon Systech has already established a strong foothold in China.  A new office established in Nanjing last year has put the Group in close proximity to the new 8.5^th generation TFT-LCD production line under its major customer.

 

The Group will also best utilize its technology center in Japan, given its unique positioning, local technical expertise and customer relationships, to develop more new products for the expanding LCD market to drive business growth in China and globally.

 

Developing new technologies and new products forms the backbone of Solomon Systech.  In addition to mainstream display products supporting LCD display technologies, including In-cell touch display driver IC (TDDI), TFT display driver IC (DDI), display interface controller IC, the Group is also focusing on advanced display solutions including PMOLED display driver IC, AMOLED display driver IC and bistable display driver IC which support OLED and E-paper display technologies respectively.

 

The Group will leverage the burgeoning wearables market to boost its businesses in PMOLED display driver ICs and MIPI display interface controller ICs.  With its new In-Cell TDDI, AMOLED display driver ICs and eDP-to-MIPI display interface controller ICs, the Group aims to capture the growing demand for smartphones with high performance, high resolution, low power consumption and low system cost.  The Group will also continue to develop new AMEPD solutions to increase its share of the fast-growing Electronic Shelf Labels market, in addition to new display solutions for 4k/2k TV, automotive, etc..

 

Dr. Archie Yeh, Chief Executive Officer of Solomon Systech, said, “In 2016, we target to change for the better, driving greater effectiveness and efficiency by focusing on key customers and products with sustained value.  To achieve this, we have to streamline operations and focus our resources on the target products, as well as to reduce the time and cost of new production introduction.

 

With the arrival of the age of the Internet of Things (IoT), the increased interconnectedness of things is a robust growth driver for the semiconductor industry and our target market segments.  We aim to further accelerate the momentum we have successfully built to tap the growth potential in IoT devices and drive our business to new heights of success.”