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Solomon Systech (International) Limited Solomon Systech (International) Limited 2008 Annual Results Announcement 25 March 2009 Hong Kong Table of contents Summary Financial Review Business Review Outlook SSIL 2008 Annual

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Solomon Systech (International) Limited Solomon Systech (International) Limited 2008 Annual Results Announcement

25 March 2009 Hong Kong

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SSIL 2008 Annual Results Announcement 25Mar2009

Table of contents

Summary Financial Review Business Review Outlook

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Summary

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Unit shipment 115 mu Sales US$92.8 million Net loss US$23.4 million Basic loss per share 7.5 HK cents Final dividend per share 3 HK cents Book to Bill ratio 0.82

Results summary

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Financial Review

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Profit and loss

Twelve months ended 31 Dec YoY (US$ million) 2008 2007 Change

Sales 92.8 165.0

  • 44%

Gross profit 16.9 39.5

  • 57%

Gross margin 18.2% 23.9% Book to Bill ratio 0.82 0.64 Net (loss) / profit (23.4) 10.2 Net margin

  • 25.2%

6.2%

(HK cents)

(Loss)/earnings per share*

  • 7.5

3.3 Dividends per share 3.0 3.0

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Profit and loss delta analysis ’08 vs ’07

  • ‘07 Net Profit:
  • ’08 Net Loss
  • Operating Expense
  • Investment Impairment
  • Interest Income
  • Tax Expense
  • Financial Assets at Fair Value
  • Inventory Provision
  • Gross Profit with Lower Sales

US$10.2m US$17.8m US$4.7m US$1.2m US$4.9m US$4.6m US$3.4m US$3.0m US$23.4m

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SSIL 2008 Annual Results Announcement 25Mar2009

Balance sheet

(US$ million) As at 31 Dec 2008 As at 31 Dec 2007 YoY Change

Total assets 162.3 202.4

  • 20%

Total borrowings Nil Nil N/A Shareholders’ funds 143.8 172.1

  • 16%

(HK cents)

Net cash 110.9 137.8

  • 20%

Shareholders’ funds per share 46 55

  • 16%

Net cash per share 35 44

  • 20%
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Net cash delta analysis ’08 vs ‘07

Net Cash @ 31st Dec:

US$110.9m (’08) vs $137.8m (‘07)

  • US$26.9m

Major Cash Outflow

Dividend Payout:

  • US$ 6.3m

Strategic Investment

  • US$ 5.6m

Plant, Property & Equipment

  • US$ 4.9m

Financial Assets

  • US$17.7m

Major Cash Inflow

Interest Received

+ US$ 5.3m

Business Operating Activities

+ US$ 2.8m

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Business Review

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Blended average selling price

2008 blended ASP = US$0.81, down 15% YoY

1.54 1.96 1.5 1.11 0.95 0.81 0.5 1 1.5 2 2.5 2003 2004 2005 2006 2007 2008 Blended Unit ASP (US$)

  • 50%

0% 50% 1H04 2H04 1H05 2H05 1H06 2H06 1H07 2H07 1H08 2H08 Blended ASP Change HoH YoY

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Unit shipment by product line

  • Mono & Color STN:

45 mu

  • m-TFT:

37 mu

  • OLED:

25 mu

  • New Display:

8 mu

  • Display System:

Initial shipment Balanced shipment in different product applications.

Note: Others include PDA drivers, large display drivers, LED drivers and PCBA

50 100 150 200 250 300 2003 2004 2005 2006 2007 2008 IC unit shipment (mu) mono STN CSTN m-TFT OLED New Display System Others 71 157 263 230 173 115 0% 20% 40% 60% 80% 100% 2003 2004 2005 2006 2007 2008 Unit shipment distribution mono STN CSTN m-TFT OLED New Display System Others

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2008 End Product Examples

GPS

Mobile Display, OLED Display and New Display

Mobile Phone

Business, Market and Application Diversification

MP3 Health Care Product

Display System Solution

Mobile Digital TV Smart Phone Electronic Shelf Label Mobile Phone

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Outlook

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Display System

Solution Businesses

Display System

Solution

Green Power

Display Panel

Electronics Businesses

Mobile Display OLED Display New Display

  • 1. Business Transformation

From IC component To application system solution

Display IC LED Lighting MDTV System

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  • 2. Market Application Transformation

From mobile phone

Mobile Phone Mobile Digital TV (MDTV) Electronic Shelf Label Health Care Product MP3 Players Portable Media Player (PMP) LED Lighting GPS

To consumer electronics and industrial applications

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IC component Sales

  • 3. Revenue Transformation

From single To multiple revenue streams

Solution Sales

Software Printed Circuit Board

Assembly

Modules Royalty Design service fees

End Product Sales Recurring S/W income

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2007

IC engineer:

94%

software engineer: 6% IDH:

  • 4. Expertise Transformation

From IC know-how To software and system design expertise

2008

IC engineer:

85%

software engineer: 15% IDH:

2

% is of the total R&D engineers IDH: Independent Design House

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Business alignment

Display System Solution BU and IDHs Green Power BU with investment in LED suppliers

Organizational effectiveness

2009 operating cost reduction > 20%

Operational efficiency

  • 5. Effectiveness Transformation

Continuous improvement

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Thank You

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