Solomon Systech (International) Limited Announces 2021 Annual Results
Financial Highlights:
• Revenue increased by approximately 38.6% to US$168.1 million.
• Gross profit was US$67.3 million and jumped by 87.6%.
• Gross margin rose to 40.0%, an increase of 10.4 percentage points.
• Profit attributable to owners of the parent was US$23.8 million and increased by 103.0%.
• Earnings per share was 1.0 US cent (7.8 HK cents).
• Book-to-bill ratio was 1.5.
• The Board proposed a final dividend per share of 1.0 HK cent (approximately 0.1 US cent) for the year ended 31 December 2021.
(HONG KONG, 23 March 2022) Solomon Systech (International) Limited (the “Company’’; SEHK: 2878) announced today the annual results of the Company and its subsidiaries (collectively, the “Group”) for the year ended 31 December 2021. The Group achieved outstanding performance in 2021 with revenue increased to US$168.1 milion and profit attributable to owners of the parent amounted to US$23.8 million, an increase of about 38.6% and 103.0%, respectively, over that of last year. Total shipment reached approximately 395.7 million units. Gross profit rose 87.6% to US$67.3 million in 2021, and gross margin reached 40.0%, representing an increase of 10.4 percentage points. The overall book-to-bill ratio was 1.5.
The good performance of the Group was mainly attributable to the increase in revenue, improvement in gross profit and a stringent control on overall expenses.
Business Review
New Display ICs
During the year under review, the Group’s New Display ICs segment gained a significant growth of 66.6% in shipment quantity, which was mainly brought by sales arising from Electronic Shelf Labels (“ESL”) in the European and the North American markets.
The Group had attained a prominent break-through in the Display IC Solutions for Spectra™ 3100, specialised platform for ESL and retail signage application. Co-developed with E Ink Holdings Inc., the technological stride has placed us in a leading position in this huge market. The Group expects to extensively launch about 10 million units of ESLs driven display ICs in the market starting from 2022, including the top-ranked supermarkets in Europe. Moreover, the Group will commence mass production for Advanced Colour e-Paper (ACeP) products. Our AMEPD driver IC, targeting the e-Signage and e-Reader markets, is also expected to commence mass production soon.
OLED Displays ICs
Revenue from OLED Display ICs segment increased by over 21.0%. The Group is the world’s number one PMOLED display driver IC player with a dominant market share in terms of unit of shipment in 2021. During the year under review, OLED Display IC business benefited from the strong market demand for PMOLED wearable devices, smart home solutions and Internet of Things/Artificial Internet of Things solutions. Meanwhile, the demand for handheld health-care devices for the Group’s IC products had sustained in 2021.
In 2021, the Group launched SSD7317, the world’s first TDDI IC targeting smart home application. The Group is a forerunner in the application of mini/micro-LED IC products, and the business is expected to grow as the global high-end consumer electronics market continues to expand.
Mobile Displays and Mobile Touch ICs
During the year under review, the Mobile Display and Mobile Touch ICs segment reported both increases in shipment quantity of 23.5% and sales revenue of 35.1%, respectively.
The Group launched our first full-colour TDDI specialised for wearables and IoT devices. This IC incorporates the Group’s latest proprietary driving scheme and approximately 5 million units were produced and delivered in 2021. In addition, the game controller IC business had achieved good performance with sizable mass production. The Group has successfully secured manufacturing orders into 2022, a notable contribution to the sustainable revenue base.
Large Display ICs
During the review year, revenue of Large Display ICs segment was lower than that of 2020 as the Group allocated most of its resources for other high-end products.
The Group had launched a high-speed Peer-to-peer (P2P) display driver IC for the 165Hz high-refresh-rate gaming monitor and 8K HDTV. Adopting a novel architecture with I/O speed as fast as 3.6Gbps, this latest offering could increase the Group’s visibility in the blooming high-end entertainment market.
Prospects
The prevalent impact of the Covid-19 pandemic on the global supply chain is further complicated by geopolitical instability. Global chip shortage is expected to last into 2023 or even after, with prices remaining at a relatively high level. Nonetheless, the Group will strive to continuously develop and provide value-added products to customers, despite the ever-increasing pressure in logistics and materials costs.
On the innovation front, the new ESL IC solution supporting seven colours is under development, an anticipated contribution to the Group’s revenue and global visibility. The Group will also synthesise our leadership in e-Paper IC solution in the R&D of novel display IC solutions for e-Reader. Meanwhile, we are co-developing a human interface display platform to leverage the Group’s pioneering technologies in TDDI. Envisioning the market potential of the Metaverse, the Group will capitalise on its expertise in high-speed and high-resolution display IC technology to leverage into the development of enhanced AR and VR products.
Mr. Raymond Wang, Chief Executive Officer of the Company, said, “Capitalising on our innovative technological foresight and the acute market sense, the Group achieved outstanding performance amid the enormous challenges prevailing in the global semiconductor market. Looking into 2022, demand for display IC products is expected to remain strong, and we will continue to create high value-added products to our customers, ultimately maximising returns to our stakeholders.”
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