Solomon Systech (International) Limited 2005 Annual Results - PowerPoint PPT Presentation

Solomon Systech (International) Limited 2005 Annual Results Announcement 13 March 2006 Hong Kong

www.solomon-systech.com Table of contents Table of contents • Summary • Financial review • Business review • Outlook SSIL 2005 Annual Results 13 Mar 2006 P. 2

www.solomon-systech.com www.solomon-systech.com Summary Summary Summary Summary SSIL 2005 Annual Results 13 Mar 2006 P. 3

www.solomon-systech.com Growing from strength to strength Growing from strength to strength • Sales US$394 million (+28%) • Net profit US$76.3 million (+32%) • EPS reaching 24.3 HK cents • Final dividend per share 15 HK cents • Total dividends per share of the year 19 HK cents • Global market share in mobile display ICs exceeding 20% SSIL 2005 Annual Results 13 Mar 2006 P. 4

www.solomon-systech.com www.solomon-systech.com F F F F inancial Review inancial Review inancial Review inancial Review SSIL 2005 Annual Results 13 Mar 2006 P. 5

www.solomon-systech.com Profit and loss Profit and loss Twelve months ended 31 Dec YoY (US$ million) 2005 2004 Change Sales 394.1 308.2 28% Gross profit 119.6 96.6 24% Net profit 76.3 57.9 32% (HK cents) Earnings per share* 24.3 20.5 19% Dividends per share 19.0 14.6 30% * Basic EPS calculation is based on the adjusted weighted average number of ordinary shares in issue for the period (2005: 2,445,135,773 and 2004 restated: 2,204,501,037) SSIL 2005 Annual Results 13 Mar 2006 P. 6

www.solomon-systech.com Balance sheet Balance sheet As at 31 As at 31 Change (US$ million) Dec 2005 Dec 2004 Total assets 270.3 250.1 8% Total borrow ings Nil Nil N/A Shareholders’ funds 207.0 176.8 17% Net cash 161.4 136.7 18% (HK cents) Shareholders’ funds per share 66 62 6% Net cash per share 51 48 6% * Per share figures are based on the adjusted weighted average number of ordinary shares in issue for the period (2005: 2,445,135,773 and 2004 restated: 2,204,501,037) SSIL 2005 Annual Results 13 Mar 2006 P. 7

www.solomon-systech.com HKFRS 2 – – Share based payments Share based payments HKFRS 2 • The first year adoption of HKFRS2 • Its impact on financials is summarized below: Impact on 2005 2006E 2007E Expense (as % of revenue) 0.8% a ~1.5% b ~2.0% b Dilution (increase in no. of shares) ~0.2% ~0.2% ~1.0% * The dollar value impact on expense is reflected as a percentage of 2005 revenue (US$394 million) Note (a): Actual provision for equity compensation Note (b): Forecast impact on expense assuming revenue remains unchanged SSIL 2005 Annual Results 13 Mar 2006 P. 8

www.solomon-systech.com Historical financials Historical financials Sales Net Profit US$m US$m 400 80 300 60 200 40 100 20 0 0 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 SSIL 2005 Annual Results 13 Mar 2006 P. 9

www.solomon-systech.com Historical financials Historical financials Earnings Per Share Return on equity HK cents 28 60% 24 50% 20 40% 16 30% 12 20% 8 10% 4 0 0% 2001 2002 2003 2004 2005 2001 2002 2003 2004 2005 * Return on equity (“ROE”) is calculated by dividing the net profit for the year by simple average of shareholders’ funds at the beginning and end of the year. SSIL 2005 Annual Results 13 Mar 2006 P. 10

www.solomon-systech.com www.solomon-systech.com Business Review Business Review Business Review Business Review SSIL 2005 Annual Results 13 Mar 2006 P. 11

www.solomon-systech.com Units shipment by product line Units shipment by product line 300 250 MI SC. Units (million) 200 L-TFT OLED 150 m-TFT CSTN 100 MONO 50 0 2001 2002 2003 2004 2005 Note: TFT denotes large display driver ICs. Miscellaneous includes graphics controller, display ICs for PDA and other applications SSIL 2005 Annual Results 13 Mar 2006 P. 12

www.solomon-systech.com Blended average selling price (ASP) Blended average selling price (ASP) 2.0 1.5 US$ 1.0 0.5 0.0 2001 2002 2003 2004 2005 SSIL 2005 Annual Results 13 Mar 2006 P. 13

www.solomon-systech.com Gross margin and market share Gross margin and market share Gross margin SSIL market share (RHS) 50% 25% 40% 20% 30% 15% 20% 10% 10% 5% 0% 0% 2001 2002 2003 2004 2005 Assumptions: (1) The percentage of mobile phone with dual display versus the total mobile phone shipment – 15% (2001), 20% (2002), 23% (2003), 27% (2004) and 30% (2005) respectively (2) The percentage of the Group’s display ICs used in mobile phones – 90% (2001 – 2004), 85% (2005) (3) Mobile phone shipment in million units – 417 (2001), 439 (2002), 521 (2003), 713 (2004) and 813 (2005) SSIL 2005 Annual Results 13 Mar 2006 P. 14

www.solomon-systech.com What we delivered in 2005 What we delivered in 2005 New Products, New Applications & New Customers • m-TFT display ICs for 3G phone Mobile display • OLED display ICs for MP3, MP4 • TFT driver ICs for LCD TV, Large display monitor and notebook • Flexible and microdisplay ICs New display for portable applications SSIL 2005 Annual Results 13 Mar 2006 P. 15

www.solomon-systech.com Awards in 2005 Awards in 2005 Corporate Level: Dec Caring Company Award 2005 Grand Winner – Best of Hong Kong, 19 th Annual International ARC Awards Sep Mar Employer Of The Year Award Financial Performance: Dec Red Herring Global Small Cap 100 Dec Outstanding Financial Performance by a Public Fabless Company Award Oct Honorable mentions, Grand Prix for Best Overall Investor Relations – Small to Mid-Cap, IR Magazine Awards 2005 Technological Innovation: Dec Deloitte Technology Fast 500 Asia Pacific (ranked: 121) Nov Deloitte Technology Fast 50 China (ranked: 26) Oct Leading Product Winners (Analog & Mixed Signal ICs), EDN China Innovation Award 2005 Oct Grand Award and Gold Award for Outstanding Innovation and Technology Products SSIL 2005 Annual Results 13 Mar 2006 P. 16

www.solomon-systech.com www.solomon-systech.com O O O O utlook utlook utlook utlook SSIL 2005 Annual Results 13 Mar 2006 P. 17

www.solomon-systech.com General views on 2006 General views on 2006 Market • Healthy mobile phones growth • Strong demand for LCD TVs and consumer electronics • Seasonality factor and slow MP3 market in Q1 Products • Continued growth in mobile display ICs • High volume L-TFT driver ICs • Production of new display ICs Customers • Mobile + PC / TV + consumer electronics • Taiwan / China + Japan / Korea Price • Constant lower price expectation from customers Cost • Balanced to tight wafers supply • Costs saving from yield improvement & die-shrink • Competitive landscape shifting from global to regional Competition players Most favorable Most unfavorable SSIL 2005 Annual Results 13 Mar 2006 P. 18

www.solomon-systech.com Expected units growth for 2006 Expected units growth for 2006 MONO CSTN m-TFT OLED L-TFT MISCELLANEOUS 0 - 50% 50 - 100% >100% Growth SSIL 2005 Annual Results 13 Mar 2006 P. 19

www.solomon-systech.com Thank You Thank You Thank You Thank You Solomon Systech (International) Limited Solomon Systech (International) Limited Stock code: 2878 Stock code: 2878 SSIL 2005 Annual Results 13 Mar 2006 P. 20