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

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solomon systech international limited 2005 annual results
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Solomon Systech (International) Limited 2005 Annual Results - - PowerPoint PPT Presentation

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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

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

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SSIL 2005 Annual Results 13 Mar 2006

Table of contents Table of contents

  • Summary
  • Financial review
  • Business review
  • Outlook
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SSIL 2005 Annual Results 13 Mar 2006

Summary Summary Summary Summary

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SSIL 2005 Annual Results 13 Mar 2006

  • 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%

Growing from strength to strength Growing from strength to strength

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SSIL 2005 Annual Results 13 Mar 2006

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

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SSIL 2005 Annual Results 13 Mar 2006

Profit and loss Profit and loss

30% 14.6 19.0 Dividends per share 19% 20.5 24.3 Earnings per share*

(HK cents)

32% 57.9 76.3 Net profit 24% 96.6 119.6 Gross profit 28% 308.2 394.1 Sales

Change 2004 2005 (US$ million) YoY Twelve months ended 31 Dec

* 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)

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SSIL 2005 Annual Results 13 Mar 2006

Balance sheet Balance sheet

(HK cents)

17% 176.8 207.0 Shareholders’ funds 18% 136.7 161.4 Net cash 6% 48 51 Net cash per share 6% 62 66 Shareholders’ funds per share N/A Nil Nil Total borrow ings 8% 250.1 270.3 Total assets

Change As at 31 Dec 2004 As at 31 Dec 2005 (US$ million)

* 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)

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SSIL 2005 Annual Results 13 Mar 2006

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

  • The first year adoption of HKFRS2
  • Its impact on financials is summarized below:

~1.0% ~0.2% ~0.2% Dilution (increase in no. of shares) ~2.0%b ~1.5%b 0.8%a Expense (as % of revenue) 2007E 2006E 2005 Impact on

* 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

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SSIL 2005 Annual Results 13 Mar 2006

Historical financials Historical financials

Sales

100 200 300 400 2001 2002 2003 2004 2005 US$m

Net Profit

20 40 60 80 2001 2002 2003 2004 2005 US$m

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SSIL 2005 Annual Results 13 Mar 2006

Historical financials Historical financials

Return on equity

0% 10% 20% 30% 40% 50% 60% 2001 2002 2003 2004 2005

Earnings Per Share

4 8 12 16 20 24 28 2001 2002 2003 2004 2005 HK cents * 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.

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Business Review Business Review Business Review Business Review

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SSIL 2005 Annual Results 13 Mar 2006

Units shipment by product line Units shipment by product line

50 100 150 200 250 300 2001 2002 2003 2004 2005 Units (million) MI SC. L-TFT OLED m-TFT CSTN MONO

Note: TFT denotes large display driver ICs. Miscellaneous includes graphics controller, display ICs for PDA and other applications

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SSIL 2005 Annual Results 13 Mar 2006

Blended average selling price (ASP) Blended average selling price (ASP)

0.0 0.5 1.0 1.5 2.0 2001 2002 2003 2004 2005 US$

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SSIL 2005 Annual Results 13 Mar 2006

Gross margin and market share Gross margin and market share

0% 10% 20% 30% 40% 50% 2001 2002 2003 2004 2005 0% 5% 10% 15% 20% 25% Gross margin SSIL market share (RHS)

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)

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SSIL 2005 Annual Results 13 Mar 2006

What we delivered in 2005 What we delivered in 2005

Mobile display New display Large display

  • m-TFT display

ICs for 3G phone

  • OLED display ICs

for MP3, MP4

  • Flexible and

microdisplay ICs for portable applications

  • TFT driver ICs

for LCD TV, monitor and notebook

New Products, New Applications & New Customers

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SSIL 2005 Annual Results 13 Mar 2006

Awards in 2005 Awards in 2005

Corporate Level: Dec Caring Company Award Sep 2005 Grand Winner – Best of Hong Kong, 19th Annual International ARC Awards 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

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O utlook O utlook O utlook O utlook

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SSIL 2005 Annual Results 13 Mar 2006

  • Competitive landscape shifting from global to regional

players

  • Balanced to tight wafers supply
  • Costs saving from yield improvement & die-shrink
  • Constant lower price expectation from customers
  • Mobile + PC / TV + consumer electronics
  • Taiwan / China + Japan / Korea
  • Continued growth in mobile display ICs
  • High volume L-TFT driver ICs
  • Production of new display ICs
  • Healthy mobile phones growth
  • Strong demand for LCD TVs and consumer electronics
  • Seasonality factor and slow MP3 market in Q1

Competition Cost Price Customers Products Market

General views on 2006 General views on 2006

Most favorable Most unfavorable

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Expected units growth for 2006 Expected units growth for 2006

0 - 50% 50 - 100% >100% MONO CSTN m-TFT OLED L-TFT Growth MISCELLANEOUS

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SSIL 2005 Annual Results 13 Mar 2006

Thank You Thank You Thank You Thank You

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