7 September 2005 Hong Kong www.solomon-systech.com Table of - - PowerPoint PPT Presentation

7 September 2005 Hong Kong

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SSIL 2005 Interim Results 7 Sept 2005

Table of contents Table of contents

• Summary
• Financial review
• Business review
• Outlook

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SSIL 2005 Interim Results 7 Sept 2005

Summary Summary Summary Summary

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SSIL 2005 Interim Results 7 Sept 2005

• Turnover up 69%, year-on-year
• Net profit growth of 62%
• EPS reaching 11.7 HK cents for the 6-month period
• Dividend per share of 4.0 HK cents
• Global market share in mobile display ICs

approaching 20%

Summary Summary – – Continuing to deliver Continuing to deliver

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SSIL 2005 Interim Results 7 Sept 2005

F inancial Review F inancial Review F inancial Review F inancial Review

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SSIL 2005 Interim Results 7 Sept 2005

Profit and loss Profit and loss

54% 2.6 4.0 Dividends per share 39% 8.4 11.7 Earnings per share*

(HK cents)

62% 22.5 36.3 Profit attributable to shareholders 46% 39.7 57.9 Gross profit 69% 110.1 185.7 Turnover

Change 2004 2005 (US$ million) YoY Six months ended 30 June

* EPS calculation is based on the weighted average number of shares for the period

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SSIL 2005 Interim Results 7 Sept 2005

Balance sheet Balance sheet

(HK cents)

19% 148.7 176.3 Shareholders’ funds 20% 124.4 149.9 Net cash 21% 39 47 Net cash per share 20% 46 55 Shareholders’ funds per share N/A Nil Nil Total borrow ings 25% 190.9 238.2 Total assets

Change As at 30 June 2004 As at 30 June 2005 (US$ million)

Note: 2004 balance sheet items extracted from interim report without restatement All per share figures are based on the outstanding shares of the Company at the period-end

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SSIL 2005 Interim Results 7 Sept 2005

Adopting of new accounting standards Adopting of new accounting standards

• Effective date

January 1, 2005

• Impact immaterial
• One standard

worth mentioning

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SSIL 2005 Interim Results 7 Sept 2005

HKFRS 2 HKFRS 2 – – Share based payments Share based payments

• Its impact on SSIL can be summarized below:

~1.0% ~0.2% ~0.2% Dilution (increase in no. of shares) ~2.0%b ~1.5%b <1.0%a Expense (as % of revenue) 2007P 2006P 2005E Impact on

* The dollar value impact on expense is reflected as a percentage of 2005E revenue Note (a): Estimated impact on expense Note (b): Projected impact on expense assuming the equity compensation, revenue and profit are the same in 2005

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SSIL 2005 Interim Results 7 Sept 2005

Historical financials Historical financials

Turnover

185.7 50 100 150 200 1H 2003 1H 2004 1H 2005 US$m

CAGR 100%

Net Profit

36.3 10 20 30 40 1H 2003 1H 2004 1H 2005 US$m

CAGR 94%

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SSIL 2005 Interim Results 7 Sept 2005

Historical financials Historical financials

Shareholders’ Funds

176.3 50 100 150 200 1H 2003 1H 2004 1H 2005 US$m

CAGR 88%

Earnings Per Share

11.7 4 8 12 16 1H 2003 1H 2004 1H 2005 HK cents

CAGR 80%

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SSIL 2005 Interim Results 7 Sept 2005

Business Review Business Review Business Review Business Review

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SSIL 2005 Interim Results 7 Sept 2005

Units shipment by product line Units shipment by product line

20 40 60 80 100 120 1H 2002 1H 2003 1H 2004 1H 2005 Units (million) LARGE PANEL OTHERS OLED m-TFT CSTN MONO

Source: Solomon Systech

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SSIL 2005 Interim Results 7 Sept 2005

Change in blended ASP Change in blended ASP

Note: Half-on-half change in blended ASP Source: Solomon Systech

• 40%
• 20%

0% 20% 40% 60% 1H 2H 1H 2H 1H 2H 1H

2002 2005 2004 2003

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SSIL 2005 Interim Results 7 Sept 2005

Gross margin and market share Gross margin and market share

0% 10% 20% 30% 40% 50% 2002 2003 2004 1H 2005 0% 5% 10% 15% 20% 25% Gross margin SSIL market share (RHS)

Assumptions: (1) Mobile handsets with dual display as a percentage of overall mobile handsets shipped in the previous years are 15% (2001), 20% (2002), 23% (2003), 27% (2004) and 29% (1H 2005) respectively (2) 90% of the Group’s display ICs are used for the mobile handsets (3) A total of 383 million units of mobile handsets shipped in 1H 2005 Note: 1H 2005 gross margin number is unaudited

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SSIL 2005 Interim Results 7 Sept 2005

What we delivered in the first half? What we delivered in the first half?

Mobile display New display Large display

• m-TFT display

ICs for 3G phone

• OLED display ICs

for MP3 player

• Controller ICs for

micro-display applications

• TFT driver ICs

for LCD TV, monitor and notebook

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SSIL 2005 Interim Results 7 Sept 2005

New awards in the first half New awards in the first half

2005 International ARC Awards

Overall Annual Report Gold Award

• Technology Consulting

2004 Employer of the Year Award

• Manufacturing

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SSIL 2005 Interim Results 7 Sept 2005

O utlook O utlook O utlook O utlook

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SSIL 2005 Interim Results 7 Sept 2005

General views on the second half General views on the second half

• Demand for mobile handsets and MP3 players
• New products and customers
• Stability of wafers supply
• Cost of sales
• Pricing pressure
• Competition

Most favorable Most unfavorable

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SSIL 2005 Interim Results 7 Sept 2005

Expected units growth of 2H versus 1H Expected units growth of 2H versus 1H

Note: Others include large display driver ICs and new display products 0 - 50% 50 - 100% >100% MONO CSTN M-TFT OLED OTHERS Growth

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SSIL 2005 Interim Results 7 Sept 2005

Thank You Thank You Thank You Thank You

Solomon Solomon Systech Systech (International) Limited (International) Limited Stock code: 2878 Stock code: 2878