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Solomon Systech (International) Limited Solomon Systech (International) Limited 2010 Annual Results Announcement 24 March 2011 Hong Kong Table of contents Summary Financial Review Business Review Outlook SSIL 2010 Annual

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Solomon Systech (International) Limited Solomon Systech (International) Limited 2010 Annual Results Announcement

24 March 2011 Hong Kong

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SSIL 2010 Annual Results Announcement 24Mar2011

Table of contents

Summary Financial Review Business Review Outlook

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Summary

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Unit shipment up 53% to 142 million units Sales grew by 37% to US$84.7 million Gross profit grew by 25% to US$25.6 million Net profit US$1.0 million Book to bill ratio for the year was 1.0 Basic earnings per share 0.33 HK cent The Board recommended no final dividend

Results summary

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Financial Review

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Profit and loss

Twelve months ended 31 Dec YoY (US$ million) 2010 2009 Change

Sales 84.7 61.8 +37% Gross profit 25.6 20.4 +25% +52% +51% Gross profit margin 30% 33% Book to Bill ratio 1.0 1.0 Net profit 1.0 0.7 Net margin 1.2% 1.1%

(HK cent)

Earnings per share 0.33 0.22 Dividend per share Nil 1.0

  • All financial figures are rounded up to one or two decimal point
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Financial Remark

Sales 37% Unit shipment 53% YoY Blended ASP 11% YoY Gross profit $25.6m 25% up YoY Operating expenses $28.6m 10% up YoY

  • SG&A up 15% YoY and R&D up 6% YoY

Net profit Key Factors

  • Gross profit margin 30% (‘09: 33%)

Other financial income

  • US$1.6m Gain (’09: US$3.4m Gain)
  • US$1.0m

Strategic investment loss

  • US$1.0m Loss (’09: US$1.9m Loss)

Disposal of long term investment asset

  • US$3.2m Gain (’09: US$0.1m Gain)
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Balance sheet

(US$ million) As at 31 Dec 2010 As at 31 Dec 2009 YoY Change

Total assets 154.2 150.2 3% Total borrowings 0.8 0.8 (2%) Shareholders’ funds 135.0 135.8 (1%)

(HK cents)

Net cash 79.6 92.9 (14%) Shareholders’ funds per share 43 43 Net cash per share 25 29

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Net cash delta analysis ’10 vs ‘09

Net Cash @ 31st Dec:

US$79.6m (’10) vs $92.8m (‘09)

  • US$13.2m

Major Cash Outflow

Business Operating Activities

  • US$ 2.7m

Plant, Property & Equipment

  • US$ 4.1m

Financial Assets Net Increase

  • US$ 5.0m

Dividend Payout

  • US$ 3.2m

Major Cash Inflow

Interest Received

+ US$ 1.6m

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Business Review

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Blended average selling price

2010 blended ASP = US$0.60, down 11% YoY

0.60 0.81 0.67 0.00 0.10 0.20 0.30 0.40 0.50 0.60 0.70 0.80 0.90 2008 2009 2010 Blended Unit ASP (US$)

  • 30%
  • 20%
  • 10%

0% 10% 20% 1H08 2H08 1H09 2H09 1H10 2H10 Blended ASP Change

HoH YoY

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Unit shipment by product line

Total unit shipment 142 million units

20 40 60 80 100 120 140 160 2008 2009 2010

IC unit shipment (mu)

Green Power Display System Solution Large Display Advanced Display Mobile Display

0% 20% 40% 60% 80% 100% 2008 2009 2010

Unit Shipmment Distribution

Green Power Display System Solution Large Display Advanced Display Mobile Display

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Examples of 2010 design-wins

Pico-projector Android Phone

Mobile Display IC Display System Solution

Display Remote Control

Advanced Display IC

MP3 Players

New Customers, New Products, New Applications

Mobile Internet Device

Green Power

LED Street Lamp USB Bank Key Price Tag LED Light Bulb Android Mobile Internet Device Personal Navigation Device LED Spot Light Smartphone

Touch Panel IC

Electronic Guitar

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Outlook

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2011 Outlook

  • Sales
  • Expect new market applications and demand created by the latest electronics advancement

in smartphones and tablet PCs with touch sensing function, and green energy

  • Anticipate growth in diversified business
  • Gain new business through synergies with China based customers
  • Gross profit margin
  • Stay in line with industry
  • Operating expenses
  • Continue monitoring
  • Invest in focused R&D projects
  • 2011 Challenges & Focus
  • Generate revenue with our new products
  • Continue new product and technology development
  • Dedicate strategic effort to expand China business
  • Manage supply chain capacity and lead time
  • Risk
  • Japan 311 earthquake - No impact on delivery for orders on hand but need close monitoring

for the coming months due to unforeseeable changes in supply chain

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Display IC

Mobile Display

Driver IC

Address high growth market segment

like smartphones and tablet PCs of high resolution, medium size display.

Touch Panel IC (Capacitive Touch)

Volume shipment of multi-touch IC

started from 1Q 2011 for smartphone.

A portfolio of new products to come out

Cost effective solutions for simple single

touch applications

Advanced 10 points touch sensing

technology for medium size display Window Mobile and tablet PC applications.

Business Plan

Multi-touch Applications Remote Control with Touch Screen Tablet PCs Smartphone Dimmer Control Tablet Desk Phone

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Display IC (cont’d)

Advanced Display

  • Continue PMOLED leadership and expand

applications from consumer electronics to industrial appliances such as power meter

  • Extend volume shipment of e-Paper IC from

electronic shelf labels to health care product and storage device

Large Display

  • Align to China’s emerging large TFT display

and TV industry

  • Complete qualification for production of TFT

driver ICs

Business Plan

OLED Power Meter LCD TV Health Care Product

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System Solutions

Display System Solution

  • Increase sales of multimedia ICs (MagusCoreTM)

via pico-projector and Android mobile internet device design-wins

  • Extend mobile system solution shipment in vertical

market segments to include senior mobile, GPS tracking system and Android applications

Green Power

  • Generate volume shipment of LED driver ICs and

power modules for retrofit lighting

  • Complete qualification for production of LED

backlight units for monitor / TV applications

Business Plan

Android Mobile Internet Device LED Light Bulb

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Thank You

Solomon Systech (International) Limited Stock code: 2878 www.solomon-systech.com