11 September 2008 Hong Kong SSIL 2008 Interim Results Announcement - PowerPoint PPT Presentation

11 September 2008 Hong Kong SSIL 2008 Interim Results Announcement 11Sep2008 P. 1

Table of contents ! Summary ! Financial Review ! Business Review ! Outlook SSIL 2008 Interim Results Announcement 11Sep2008 P. 2

Summary SSIL 2008 Interim Results Announcement 11Sep2008 P. 3

Results summary ! Unit shipment 61mu ! Sales US$51 million ! Net loss US$6.0 million ! Basic loss per share 1.95 HK cents ! No interim dividend was declared by the Board ! Book to bill ratio @ 30 Jun-08 was 0.90 SSIL 2008 Interim Results Announcement 11Sep2008 P. 4

Financial Review SSIL 2008 Interim Results Announcement 11Sep2008 P. 5

Profit and loss Six months ended 30 June YoY (US$ million) 2008 2007 Change Sales 50.8 103.4 -51% Gross profit 11.0 25.0 -56% Gross margin 21.7% 24.1% Net (loss) / profit (6.0) 9.8 -11.7% 9.5% Net margin (HK cents) Earnings per share* -1.95 3.1 Dividends per share Nil 1.0 Book to Bill ratio 0.90 0.67 * Basic EPS calculation is based on the weighted average number of shares for the period SSIL 2008 Interim Results Announcement 11Sep2008 P. 6

Balance sheet As at 30 As at 31 HoH Change (US$ million) Jun 2008 Dec 2007 Total assets 189.2 202.4 -7% Total borrowings Nil Nil N/A Shareholders’ funds 160.6 172.1 -7% Net cash 126.3 137.8 -8% (HK cents) Shareholders’ funds per share 51 55 -7% Net cash per share 40 44 -8% SSIL 2008 Interim Results Announcement 11Sep2008 P. 7

Financial remarks Key Factors Sales 51% Unit shipment 38% YoY Blended ASP 20% YoY Net Loss US$6.0m Operating loss (US$6.0m) • Gross profit reduction 56.0% YoY • SG&A + R&D savings 2.6% YoY Investment impairment (US$1.1m) Financial asset unrealized loss (US$1.4m) Interest income US$2.6m US$2.2m Property / Plant / Equipment Capex US$3.1m US$0.9m Strategic Investment SSIL 2008 Interim Results Announcement 11Sep2008 P. 8

Business Review SSIL 2008 Interim Results Announcement 11Sep2008 P. 9

Blended average selling price ! 1H08 blended ASP = US$0.83, down 20% YoY ! Sequential decline rate moderating HoH YoY 2.00 1.71 1.69 50% Blended Unit ASP (US$) 1.50 Blended ASP Change 1.20 1.05 1.00 0.83 0% 1H04 2H04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 0.50 0.00 -50% 1H04 1H05 1H06 1H07 1H08 SSIL 2008 Interim Results Announcement 11Sep2008 P. 10

Unit shipment by product line Mono & Color STN: Declined as more mobile phones switched to m-TFT ! m-TFT: Up 29% YoY as design-wins ramped ! OLED: Decline 15% YoY as market stabilizing in new applications ! New Display: Down 67%, e-paper technology still in early stage of ! commercialization Display System: Small quantity shipped ! mono STN CSTN m-TFT OLED New Display System Others mono STN CSTN m-TFT OLED New Display System Others 140 IC unit shipment (mu) 100% 120 Unit shipment distribution 100 80% 80 60% 60 40% 40 20% 20 0 0% 1H04 1H05 1H06 1H07 1H08 1H04 1H05 1H06 1H07 1H08 Note: Others include large panel TFT (L-TFT) driver IC and other IC products SSIL 2008 Interim Results Announcement 11Sep2008 P. 11

Examples of 1H08 design-wins New Customers, New Products, New Applications Mobile Display (STN, TFT) OLED Instrument Keyboard MP3 MP3 Mobile Phone GPS Display System Study Machine Control Panel Mobile Digital TV SSIL 2008 Interim Results Announcement 11Sep2008 P. 12

Outlook SSIL 2008 Interim Results Announcement 11Sep2008 P. 13

2H 2008 Outlook ! Sales ! Uncertain economic condition ! Challenging based on the book to bill ratio ! Gross profit margin ! Pressure from market ASP erosion ! Operating expenses ! Maintain control; Invest in focused R&D projects ! New businesses or customers ! Continue development for system solution ! Strategic investment in growing industry SSIL 2008 Interim Results Announcement 11Sep2008 P. 14

Continuous Development Customer, Product and Application Diversification ! Display Panel Mobile Display ! m-TFT ! Audio / Video equipments, GPS Mobile Phone - TFT GPS, mobile phone ! OLED ! Mobile phone, MP3, industrial, accessories Mobile Phone - OLED Keyboard New Display MP3 ! E-paper ! Electronic shelf label, IC card, storage devices Storage IC Card Electronic Device Shelf Label SSIL 2008 Interim Results Announcement 11Sep2008 P. 15

Continuous Development Customer, Product and Application Diversification ! Display System ! Total system solutions ! including multimedia system IC, software, hardware, end product reference design ! Focus applications ! mobile digital TV, portable media player, personal navigation device, digital photo frame ! Example ! 3Q’08 launch of CMMB MDTV in China with IDHs. Mobile Digital TV SSIL 2008 Interim Results Announcement 11Sep2008 P. 16

Strategic Investment in Growing Industry Customer, Product and Application Diversification ! Solid state lighting Business ! Extend display applications into energy-saving “green” products arena ! Invest in high brightness LED supplier ! formulating supply chain relationship ! Develop new associated IC and system ! LED drivers, controllers ! Focus applications ! General lighting, street lighting, large outdoor display General Lighting Street Lighting Large Outdoor Display SSIL 2008 Interim Results Announcement 11Sep2008 P. 17

Thank You Solomon Systech (International) Limited Stock code: 2878 www.solomon-systech.com SSIL 2008 Interim Results Announcement 11Sep2008 P. 18