香港交易及結算所有限公司及香港聯合交易所有限公司對本公告的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任何部份內容而產生或因倚賴該等內 容而引致的任何損失承擔任何責任。 （於開曼群島註冊成立之有限公司） （股份代號：2878） 2022年全年業績公佈 財務摘要 • 銷售額上升約13.5%至190.8百萬美元。 • 毛利為65.5百萬美元，下跌2.7%。 • 毛利率為34.3%，下跌5.7個百分點。 • 本公司擁有人應佔溢利淨額為27.8百萬美元，增長16.8%。 • 每股盈利為1.1美仙（8.6港仙）。 • 董事會不建議派付2022年12月31日止年度之末期股息。 ...

Financial Performance - Revenue for the six months ended June 30, 2022, was US$108.5 million, representing a 45.1% increase from US$74.8 million in the same period of 2021[9]. - Gross profit for the same period was US$42.2 million, up 45.0% from US$29.1 million year-on-year[9]. - Profit attributable to owners of the parent reached US$21.8 million, a significant increase of 103.2% compared to US$10.7 million in the prior year[9]. - Earnings per share for the period was US$0.87, which is a 102.3% increase from US$0.43 in the previous year[9]. - Total comprehensive income for the period was US$21.9 million, compared to US$10.6 million in the prior year[17]. - The company reported a profit for the period of US$21,760,000 for the six months ended June 30, 2022, compared to US$10,710,000 for the same period in 2021, representing a substantial increase of 103.5%[25]. - The group's profit attributable to owners of the parent for the period was $21,760,000, compared to $10,710,000 for the same period in 2021, representing a 103% increase[102][104]. - Basic earnings per share increased to $0.0087 for the six months ended June 30, 2022, from $0.0043 in the same period of 2021[102][104]. Assets and Liabilities - Total assets as of June 30, 2022, amounted to US$168.6 million, reflecting a 20.5% increase from US$139.9 million at the end of 2021[8]. - Shareholders' funds increased to US$105.9 million, a rise of 22.1% from US$86.7 million as of December 31, 2021[8]. - Total non-current assets decreased to US$17,676,000 as of June 30, 2022, from US$18,323,000 as of December 31, 2021, representing a decline of 3.5%[21]. - Total current assets increased significantly to US$150,888,000 as of June 30, 2022, compared to US$121,590,000 as of December 31, 2021, marking an increase of 24.1%[21]. - Total current liabilities rose to US$61,381,000 as of June 30, 2022, up from US$51,633,000 as of December 31, 2021, indicating an increase of 18.5%[21]. - Net current assets improved to US$89,507,000 as of June 30, 2022, compared to US$69,957,000 as of December 31, 2021, reflecting a growth of 28.0%[21]. - Net assets increased to US$105,882,000 as of June 30, 2022, from US$86,707,000 as of December 31, 2021, showing a rise of 22.0%[21]. - Trade receivables as of June 30, 2022, amounted to $27,389,000, an increase from $24,112,000 as of December 31, 2021[115]. - Trade and bills payables increased to $25,916,000 as of June 30, 2022, compared to $23,919,000 as of December 31, 2021, reflecting an increase of approximately 8.4%[124]. - Accrued expenses and other payables totaled $59,512,000 as of June 30, 2022, up from $50,149,000 as of December 31, 2021, representing a growth of about 18.5%[124]. Cash Flow - Net cash flows from operating activities increased to $20,076,000 for the six months ended June 30, 2022, compared to $7,640,000 in the same period of 2021, representing a growth of 163%[30]. - Net cash flows from investing activities were $2,043,000, a significant improvement from a net outflow of $711,000 in the prior year[30]. - The company reported a net increase in cash and cash equivalents of $21,472,000 during the period, compared to an increase of $3,925,000 in the same period last year[30]. - Cash and cash equivalents rose to US$47,420,000 as of June 30, 2022, compared to US$24,757,000 as of December 31, 2021, an increase of 91.5%[21]. - Cash and cash equivalents at the end of the period totaled $46,420,000, down from $54,634,000 at the end of June 2021, reflecting a decrease of 15%[30]. Dividends - The company did not recommend the payment of an interim dividend for the six months ended June 30, 2022[10]. - The company did not pay any dividends during the current period, contrasting with $2,570,000 paid in the same period of 2021[30]. - The company did not declare an interim dividend for the six months ended June 30, 2022, compared to no interim dividend declared for the same period in 2021[110][113]. Research and Development - Research and development costs for the period were US$14.9 million, compared to US$12.1 million in the same period last year[15]. Market and Industry Trends - The semiconductor market is expected to continue healthy growth, driven by demand across various industries including automotive and home appliances[189]. - The ongoing chip shortage and geopolitical tensions have disrupted global supply chains and increased inflationary pressures[187]. - The home gaming console market is experiencing robust growth, with leading brands launching enhanced touch and display functionalities[188]. - Electronic shelf labels (ESL) are set to revolutionize the retail industry, improving staff efficiency and enhancing the shopping experience[188]. - The pandemic has accelerated the demand for smart home appliances and IoT devices, further boosting the semiconductor industry's growth[180]. - The global semiconductor market is expected to maintain a healthy growth momentum despite ongoing challenges such as inflation and geopolitical instability[192]. Strategic Focus - The company aims to optimize and adjust its product mix to meet stringent customer requirements for quality and functionality, leveraging economies of scale and solid relationships with upstream foundries for cost control[195][198]. - The company is focused on developing next-generation solutions that are versatile, efficient, and cost-effective, utilizing research resources and proprietary patents accumulated over the past two decades[196][199]. - The company recognizes the challenges posed by higher-than-expected inflation, which is driving up production and business costs[194][198]. - The company is committed to providing value-added products and solutions to cater to fast-changing market trends and emerging technologies[195][198]. - The company is positioned to capitalize on niche markets that can provide higher profit margins through innovative solutions[196][199]. - The Group's strategy of adjusting the product mix to focus on better customer experiences has proven effective in driving performance[181]. - The Group secured stable upstream supply by leveraging relationships with key foundries, ensuring capacity to meet rising product demand[181].

Financial Performance - The Group's sales revenue increased by 38.6% year-on-year to US$168.1 million in 2021[17] - Profit attributable to owners of the parent rose from US$11.7 million in 2020 to US$23.8 million in 2021, representing an increase of over 103.0%[17] - Gross profit increased by 87.6% to US$67.3 million, with a gross margin of 40.0%, up from 29.6% in the previous year[7] - The Group achieved a sales revenue of $168.1 million in 2021, an increase of over 38.6% compared to 2020[34] - Profit attributable to the owners of the parent increased by over 103.0% to $23.8 million, with earnings per share rising to 1.0 US cents, up 100% from 2020[34] - The average gross profit margin improved significantly by 10.4 percentage points to 40.0% in 2021 from 29.6% in 2020[34] - Total expenses for the year amounted to about US$45.1 million, representing an increase of 48.0% compared to US$30.5 million in 2020[123] - Product R&D costs amounted to US$30.4 million, an increase of 80.3% from US$16.9 million in 2020, with a R&D costs to sales ratio of 18.1%[124] - Solomon Systech reported a significant increase in revenue, achieving a total of HKD 1.2 billion for the fiscal year 2021, representing a growth of 15% year-over-year[166] - Solomon Systech anticipates continued growth, projecting a revenue increase of 10-15% for the next fiscal year, driven by new product launches and market expansion strategies[166] Asset and Shareholder Information - Total assets grew by 48.5% to US$139.9 million as of December 31, 2021[8] - Shareholders' funds increased by 36.8% to US$86.7 million as of December 31, 2021[8] - The Group maintained a net cash position with a gearing ratio of 0.002 as of December 31, 2021[135] - Total cash and cash equivalents were US$41.8 million as at December 31, 2021, down from US$51.0 million in 2020[137] Operational Efficiency and Market Strategy - The current ratio decreased to 2.35 from 2.83 in the previous year, indicating a slight decline in liquidity[9] - The book-to-bill ratio improved to 1.5 from 1.4, suggesting a positive outlook for future orders[7] - The Group focuses on higher gross profit products and strategic partnerships with internationally renowned brands to adapt to market needs[18] - The Group aims to maintain healthy growth and capture new opportunities amid rapid technological advancements and changing consumer demands[18] - The Group is focusing on high-margin products and has adjusted its product mix accordingly to meet market demand[34][40] - The Group's business structure and product portfolio have become more mature and diversified, enabling it to capture opportunities from changing consumption patterns and technological advancements[26][28] - The Group is focused on optimizing resource management and enhancing operational efficiency while maintaining strict financial discipline[50] Product Development and Innovation - The Group launched the world's first TDDI chips targeting IoT and wearable devices, expanding its OLED Display ICs business to smart home appliances[24][25] - The Group has over 660 patent rights registered worldwide, supporting continuous innovation and maintaining market leadership[43] - The Group plans to increase investment in R&D for next-generation display IC solutions to capitalize on the growing demand in wearable devices and game console controllers[51] - The Group's MIPI solutions for display are ready for production and expected to reach the market in Q2 2022, showcasing its commitment to high-resolution and low-power display technologies[73] - The Group is developing a new ESL IC solution that supports seven colors, aimed at increasing revenue and global visibility[88] - The Group aims to leverage its high-speed and high-resolution display IC technology to develop enhanced AR and VR products, targeting the Metaverse market potential[88] Workforce and Corporate Governance - As of December 31, 2021, the Group had a total workforce of 326 employees, a decrease from 341 employees in 2020[89] - Approximately 67% of the Group's employees are engineers specializing in product design and development[93] - About 89% of the Group's employees hold a bachelor's degree or above, with 32% holding a master's degree or higher[93] - The Group dedicated over 1,086 man-hours to training and development in 2021, covering both technical and soft skill training[100] - The company has adopted corporate governance principles emphasizing a quality board, effective internal controls, and stringent disclosure practices, complying with all applicable Code Provisions for the year ended December 31, 2021[189] - The Board consists of one Executive Director, three Non-executive Directors, and three Independent Non-executive Directors, ensuring a diversity of views for effective decision-making[198] - The management is committed to continuously improving corporate governance practices, observing developments in Hong Kong and overseas, particularly in the UK and USA[188] Community Engagement and Corporate Social Responsibility - The Group actively participated in "Barrier Busters 2021," an event aimed at raising awareness of the challenges faced by people with disabilities[101] - The Group participated in the Community Chest Virtual Walk for Millions, which took place from 9 January to 23 January 2022[107] - The Group's commitment to corporate social responsibility is integrated into its corporate culture, focusing on sustainable development and community support[108]

Financial Performance - Revenue for the six months ended June 30, 2021, was $74.8 million, an increase of 27.7% from $58.6 million in the same period of 2020[8]. - Gross profit for the same period was $29.1 million, representing a 92.4% increase from $15.1 million year-over-year[8]. - Profit attributable to owners of the parent reached $10.7 million, up 143.1% from $4.4 million in the prior year[8]. - Earnings per share increased to 0.43 US cents, a rise of 138.9% compared to 0.18 US cents in the previous year[8]. - Total comprehensive income for the period was $10.6 million, compared to $4.3 million in the same period of 2020[15]. - The Group's profit for the period attributable to owners of the parent was US$10,710,000, representing an increase of 143.5% compared to US$4,406,000 in the first half of 2020[95]. Assets and Equity - Total assets as of June 30, 2021, were $113.3 million, reflecting a 20.2% increase from $94.2 million at the end of 2020[8]. - Shareholders' funds increased to $72.0 million, a 13.4% rise from $63.4 million in the previous year[8]. - Total non-current assets increased to US$10,327,000 as of June 30, 2021, compared to US$7,450,000 as of December 31, 2020, reflecting a growth of 38%[19]. - Total current assets rose to US$102,980,000 as of June 30, 2021, up from US$50,827,000 at the end of 2020, representing a 102% increase[19]. - Total equity attributable to owners of the parent increased to US$71,957,000 as of June 30, 2021, compared to US$63,432,000 at the end of 2020, marking a rise of 13%[19]. Liabilities - Total current liabilities amounted to US$39,455,000 as of June 30, 2021, compared to US$30,680,000 at the end of 2020, indicating a rise of 29%[19]. - The Group's net trade receivables, including other receivables, totaled US$22,138,000, up from US$15,288,000, marking a 44.8% increase[110]. - Trade payables rose to US$17,554,000 as of June 30, 2021, compared to US$15,717,000 at the end of 2020, indicating a growth of 11.7%[117]. - Contract liabilities increased significantly to US$6,572,000 from US$2,598,000, representing a growth of 153.5%[117]. Cash Flow - Net cash flows from operating activities decreased to $7,640,000 for the six months ended June 30, 2021, down from $16,290,000 in the same period of 2020, representing a decline of approximately 53.1%[27]. - Cash and cash equivalents at the end of the period increased to $54,634,000, up from $33,418,000 at the end of June 2020, marking a growth of 63.2%[27]. - The company reported a net increase in cash and cash equivalents of $3,925,000 for the first half of 2021, a decrease from $15,359,000 in the same period of 2020, indicating a decline of 74.5%[27]. Research and Development - Research and development costs for the period were $12.1 million, up from $7.9 million in the same period last year[13]. - The Group aims to develop new micro-LED products and achieve technological breakthroughs in micro-LED and mini LED markets[199]. - Research and development efforts will focus on advancing e-paper products to seven colors or full color to meet growing market demand[196]. Market and Sales - Sales for the six months ended June 30, 2021, amounted to US$74,828,000, representing a 27.7% increase from US$58,574,000 in the same period of 2020[63]. - Revenue from Hong Kong was US$40,220,000, up 28.5% from US$31,281,000 in 2020, while revenue from Taiwan increased by 22.3% to US$14,112,000 from US$11,539,000[69]. - New Display ICs generated US$31,696,000 in revenue, a significant increase of 94.8% compared to US$16,298,000 in the first half of 2020[74]. - The Group's PMOLED display driver IC orders continued to grow steadily, driven by increased demand for handheld healthcare devices[186]. - The sales of New Display business significantly contributed to the overall sales growth during the review period[187]. Share Capital and Options - The issued capital increased to US$32,083,000 as of June 30, 2021, from US$31,977,000 at the end of 2020, showing a slight increase of 0.3%[23]. - The number of outstanding share options at the end of the period was 12,900,000, with a weighted average exercise price of HK$0.478[131]. - A total of 5,400,000 share options were granted on June 1, 2021, with an exercise price of HK$0.840 per share[144]. Industry Trends - The semiconductor industry maintained growth momentum due to the recovery of global economies, particularly in mainland China, driving demand for IC-driven products and solutions[176]. - Future growth opportunities are expected as demand for chip-based products surges in a post-COVID-19 environment, particularly in 5G communications and high-speed bandwidth applications[182]. - The global chip shortage began in the second half of 2020, with increased orders from sectors such as automotive and consumer electronics, leading to longer-term commitments from customers[178].

Financial Performance - Total sales reached US$121.3 million, representing a year-on-year increase of approximately 12.0%[15] - Profit attributable to owners of the parent was US$11.7 million, a significant recovery from a loss of US$27.3 million in 2019[11] - The Group achieved a turnaround from loss to profit, driven by an increase in average gross profit margin and total gross profit due to changes in product sales mix, effective cost control, and the sale of non-current assets[30] - The company reported a total revenue of US$121.3 million for the year ended December 31, 2020, representing a 12% increase compared to US$108.3 million in 2019[94] - The gross margin amount for the year ended December 31, 2020, was US$35.8 million, a jump of over 68.1% from US$21.3 million in 2019[94] - The company achieved a turnaround from a loss of US$27.3 million in 2019 to a profit of US$11.7 million in 2020[94] - The overall book-to-bill ratio for the year ended December 31, 2020, was 1.4, compared to 1.1 in 2019[94] - The increase in gross profit was attributed to a change in product sales mix and strong demand for higher margin Advance Display products[94] Operational Highlights - Total shipments amounted to 379.4 million units, reflecting a year-on-year increase of 22.9%[15] - The Group's total unit shipments increased by 22.9% to 379.4 million units in 2020, compared to 308.7 million units in 2019[64] - Advanced Display (AD) products saw a significant growth of approximately 82.2%, with unit shipments reaching 245.8 million units in 2020, up from 134.9 million units in 2019[66] - The Group's LD business experienced a 35.6% year-on-year decline in total shipments, totaling approximately 78.9 million units in 2020, down from 122.6 million units in 2019[76] - Revenue from mobile display (MD) products increased by approximately 6.8% year-on-year, reaching around 54.7 million units in 2020, compared to 51.2 million units in 2019[76] Research and Development - The Group invested approximately US$16.9 million in R&D, representing about 55% of total operating expenses and 13.9% of total revenue for the year[78] - The Group was granted 28 patents and filed 15 patents in 2020, enhancing its competitive advantage with a total of around 650 patents[78] - The Group is focused on enhancing its R&D capabilities to support next-generation products and protect intellectual property[18] - New product development efforts include the introduction of innovative semiconductor solutions aimed at enhancing display and touch technologies, with an expected launch in Q1 of the next fiscal year[132] Market Strategy - The semiconductor industry is expected to grow steadily in 2021, driven by advancements in technology and increased demand for smart devices[27] - The Group is committed to becoming a leading global semiconductor company, focusing on the design, development, and sales of integrated circuit chip products and system solutions[31] - The Group has formulated strategies to enhance supply-chain resilience to secure production capacity amid economic challenges[39] - The Group has shifted focus to the smart home appliances market, successfully completing design-in projects for products like smart electric toothbrushes and smart thermostats[70] - The Group is promoting a new bistable display driver IC for medium-sized ESL panels (2.6 to 4 inches) targeting the European and U.S. markets[71] Corporate Governance - The company has a strong board with diverse expertise in technology, finance, and market development, enhancing its strategic decision-making capabilities[120] - The board includes members with advanced degrees in engineering, economics, and law, reflecting a well-rounded leadership team[119] - The company has adopted a Board Diversity Policy to enhance transparency and governance, focusing on a range of diverse perspectives in member selection[144] - The Board consists of three Independent Non-executive Directors, representing more than one-third of the Board, meeting the minimum requirements under Rule 3.10(1) and Rule 3.10A of the Listing Rules[186] - The Company has implemented a Service Term Policy limiting the terms of Non-executive Directors and Independent Non-executive Directors to no more than nine consecutive years[189] Employee and Social Responsibility - The company organized various activities in 2020 to promote employee well-being and work-life balance[91] - The Group actively participated in the "Greater Bay Area Youth Employment Scheme" to recruit and retain talents in innovation and technology[46] - The company is committed to fulfilling its corporate social responsibility and will publish its ESG report for 2020[94] - As of December 31, 2020, the Group had a total workforce of 341 employees, with approximately 88% holding a bachelor's degree or above[84] Future Outlook - The company provided a positive outlook for the next fiscal year, projecting revenue growth of BB% driven by new product launches and market expansion strategies[132] - The Group anticipates high demand for its P2P gaming monitor products in 2021, with challenges related to wafer capacity for large size DDI products[81] - Demand for mobile devices in China has gradually recovered, boosting revenue from MD products related to TDDI and DDI[76] - The Group's bistable display driver IC business is expected to maintain strong growth momentum in 2021, driven by retail automation and increased consumer demand during the pandemic[81]

Financial Performance - Revenue for the six months ended June 30, 2020, was $58.6 million, a 3.5% increase from $56.6 million in the same period of 2019[9] - Gross profit increased to $15.1 million, representing a 51.7% increase compared to $10.0 million in the previous year[9] - Net profit for the period was $4.3 million, a significant recovery from a net loss of $9.6 million in the same period of 2019[9] - Earnings per share improved to 0.18 US cents, compared to a loss of 0.39 US cents per share in the previous year[9] - The total comprehensive income for the period was $4.3 million, compared to a loss of $9.7 million in the same period of 2019[19] - The Group's profit before tax for the period was US$4,406,000, a significant improvement compared to a loss of US$9,569,000 in the first half of 2019[98] - The increase in profits was attributed to a higher average gross profit margin and a decrease in operating expenses due to effective cost controls implemented in the last quarter of 2019[165] - Revenue for the Group rose around 3.5% year-on-year to approximately US$58.6 million[196] Assets and Liabilities - Total assets as of June 30, 2020, were $84.7 million, reflecting a 10.1% increase from $76.9 million at the end of 2019[8] - Shareholders' funds increased to $55.7 million, an 8.6% rise from $51.3 million at the end of 2019[8] - Total current assets increased to $47,849,000 as of June 30, 2020, compared to $43,130,000 at the end of 2019, reflecting a growth of approximately 6.3%[23] - Total non-current assets decreased to $8,028,000 as of June 30, 2020, from $8,954,000 at the end of 2019, indicating a decline of approximately 10.3%[23] - Non-current liabilities decreased to $255,000 as of June 30, 2020, from $775,000 at the end of 2019, showing a reduction of approximately 67%[23] Cash Flow and Investments - Net cash flows from operating activities for the six months ended June 30, 2020, were $16,290,000, significantly up from $3,739,000 in the same period of 2019, representing a growth of over 335%[32] - Cash and cash equivalents at the end of the period reached $33,418,000, an increase from $24,556,000 at the end of June 2019, marking a rise of approximately 36%[32] - The company’s cash flows from investing activities showed a net outflow of $384,000 for the six months ended June 30, 2020, compared to a net inflow of $8,200,000 in the same period of 2019, highlighting a shift in investment strategy[32] - Capital expenditures for the first half of 2020 totaled US$626,000, up from US$59,000 in the same period of 2019, indicating a substantial increase in investment[84] Research and Development - Research and development costs were $7.9 million, down from $14.0 million in the previous year, indicating a focus on cost management[16] - The Group maintained its research and development budget, prioritizing innovation to secure a competitive edge in the long term[174] - In 2020, the Group expects to commence mass production of Passive matrix OLED (PMOLED) Touch and Display Driver Integration (TDDI) IC and the world's first N-Color Active Matrix Electrophoretic Display (AMEPD) Driver IC[175] - Resources were deployed to expedite the production of specialized IC solutions for healthcare products, such as oximeters and infrared thermometers, in response to increased global demand due to the pandemic[167] Market and Sales - Revenue from Hong Kong decreased to US$31,281,000 in 2020 from US$36,887,000 in 2019[73] - Revenue from Mainland China increased significantly to US$5,658,000 in 2020 from US$2,936,000 in 2019[73] - Advanced Display ICs revenue rose to US$29,056,000 in 2020, up from US$20,272,000 in 2019[77] - Other ICs revenue, which mainly comprises Mobile Touch and Mobile Display products, reached US$16,088,000 in 2020, compared to US$15,189,000 in 2019[77] - Sales to a subsidiary of China Electronics Corporation (CEC) amounted to US$8,480,000 for the six months ended June 30, 2020, up from US$7,193,000 in the same period of 2019, showing a year-over-year growth of approximately 17.9%[140] Shareholder and Equity Information - The company did not declare an interim dividend for the six months ended June 30, 2020[11] - The Group's total equity attributable to owners of the parent increased to $55,660,000 as of June 30, 2020, compared to $51,273,000 at the end of 2019, reflecting a growth of about 8.5%[25] - The company had 13,300,000 valid share options outstanding as of June 30, 2020, a decrease from 15,560,000 at the end of 2019[124] - The company granted a total of 2,000,000 share options on July 17, 2020, with an exercise price of HK$0.2454 per share, reflecting a strategic move to incentivize employees[131] Challenges and Strategic Focus - The business environment in the first half of 2020 was challenging, with Hong Kong's total exports of goods experiencing a year-on-year decline of 9.9% in real terms[194] - The semiconductor industry is facing challenges due to the U.S.-China trade dispute, affecting the export of technology-related goods[179] - The Group plans to adopt a prudent approach for 2021 due to uncertainties in demand and the healthcare sector[186] - The Group is exploring opportunities to unlock market potential and maximize returns for shareholders[191]

Financial Performance - Revenue increased by approximately 10% to US$108.3 million, with total shipments reaching 308.7 million units, representing a 4% year-on-year increase[19][25] - Gross profit was US$21.3 million, a decrease of about 24% from the previous year, resulting in a gross margin of 19.7%, down 9 percentage points[13][20] - The net loss for the year was US$27.8 million, primarily due to a decrease in gross margin and provisions for slow-moving inventories[20][25] - The total assets decreased to US$76.9 million from US$107.0 million in the previous year[13] - A net loss of US$27.8 million was recorded in 2019, compared to a net loss of US$13.8 million in 2018, primarily due to reduced market demand and inventory provisions[70][75] - The gross margin decreased by 9 percentage points to 19.7% in 2019, down from 28.7% in 2018, resulting in a gross profit of US$21.3 million[71][76] - Total expenses rose to US$53.8 million in 2019, an increase of 10% from US$48.7 million in 2018, due to non-recurring expenses related to business restructuring[72][77] - The Group recorded a net finance income of US$1,000 in 2019, a decrease from US$2.0 million in 2018, reflecting lower interest and dividend income[82] - For the year ended December 31, 2019, the Group recorded a pretax loss of US$28.2 million, compared to a loss of US$13.8 million in 2018, primarily due to impairment of intellectual properties and goodwill[84] Strategic Initiatives - The company has made significant progress in new product development and established partnerships with internationally renowned brands to capture market share[18] - A long-term strategic development framework was formulated to respond to dynamic macroeconomic conditions and optimize capital structure[21][22] - The Group aims to significantly improve overall financial performance by 2020 through restructuring its mobile touch business and reducing ongoing expenses[48] - The Group's strategic initiatives include diversification of businesses and expansion into key areas such as ePaper and microelectronics[53] - The Group aims to enhance its competitive edges and achieve sustainable growth by accelerating technological innovations and enriching its product portfolio[62][66] - The Group plans to explore more markets for MD products despite the impairment of related assets[82] - The Group aims to become one of the largest display chip suppliers in Mainland China, leveraging the new point-to-point display driver IC for high-end UHD and 8K TVs[118] Research and Development - The Group's research and development resources are being fully utilized to achieve synergy effects and support business growth in the Mainland market[52] - R&D expenditure decreased from US$31.5 million to US$24.7 million, a drop of 21.6% year-on-year, with R&D costs representing 22.8% of sales[72][77] - The Group dedicated over 3,712 man-hours to training and development in 2019, covering various areas including industrial and technical training[135] - The Group's product R&D teams possess expertise in various technologies, enabling them to respond promptly to market needs and maintain competitive advantages[127] - The Group aims to enrich its intellectual property portfolio by allocating more resources for patent applications, leveraging its competitive advantage of over 600 patents[127] - The Group was granted 17 patents during the year, almost doubling the figure from the previous year, and filed 8 additional patents covering various display designs and applications[127] Market and Economic Conditions - The global economic uncertainties and trade tensions have impacted the semiconductor industry, prompting some customers to shift production bases to countries like Vietnam and Thailand[44] - The semiconductor industry is recovering, and the Group remains confident in future business development strategies despite global economic uncertainties[61][66] - The COVID-19 epidemic led to delays in shipments, directly affecting overall revenue in Q1 2020[4] - The epidemic is classified as a non-adjusting event after the financial year-end, with no adjustments made to the consolidated financial statements for the year ended December 31, 2019[7] Corporate Governance - The Company has complied with all applicable Code Provisions in the Corporate Governance Code for the year ended December 31, 2019, maintaining high standards of corporate governance[182] - The Company has adopted a Board Diversity Policy since 2013, focusing on various perspectives including gender, age, and cultural background in the selection of Board members[191] - The Board of Directors consists of two Executive Directors, three Non-executive Directors, and three Independent Non-executive Directors, ensuring a diverse range of perspectives for effective decision-making[190] - The Company has established its own written guidelines for Directors and relevant employees regarding securities transactions, ensuring compliance with insider trading regulations[185] - The company emphasizes the importance of independent directors in its governance framework[197] Future Outlook - Future outlook indicates a projected revenue growth of 15% for the next fiscal year, driven by new product launches and market expansion strategies[161] - The company is investing in R&D for new technologies, with a budget allocation of $10 million for the upcoming year[162] - Market expansion efforts include entering three new international markets, aiming for a 20% increase in market share[161] - A new product line is expected to launch in Q2 2024, anticipated to contribute an additional $5 million in revenue[162] - The company has set a performance guidance of achieving a gross margin of 40% for the next quarter[160] Employee and Management - As of December 31, 2019, the Group had a total workforce of 284 employees, with around 41% based in Hong Kong and the rest in Mainland China, Japan, Korea, and Taiwan[130] - Approximately 87% of the Group's employees hold a bachelor's degree or above, and around 41% have earned a master's degree or higher academic qualifications[132] - The management team includes professionals with backgrounds in automotive electronics, wireless communication, and semiconductor products[168][172] - The company has a strong management team with extensive experience in finance, engineering, and human resources[171][172]

Revenue and Profitability - Revenue increased by approximately 24% to US$56.6 million compared to US$45.7 million in the same period last year[3] - Total revenue for the six months ended June 30, 2019, was US$56,599,000, an increase of 24% compared to US$45,685,000 in the same period of 2018[108] - Gross profit was US$10.0 million, resulting in a gross margin of 17.6%, down from 32.0% in the previous year[3] - Gross profit for the period was US$10.0 million, with a gross margin of 17.6%, down from US$14.6 million and 32.0% in the first half of 2018[194] - The Group reported a loss before tax of US$9,569,000 for the six months ended June 30, 2019, compared to a loss of US$6,266,000 in the same period of 2018[136] - A net loss attributable to the Company's equity holders was reported at US$9.6 million, compared to a loss of US$6.3 million in the same period of 2018[196] Expenses - Selling and distribution expenses were US$1.8 million, while administrative expenses totaled US$6.4 million[7] - Selling and distribution expenses were US$1.8 million, and administrative expenses were US$6.4 million, both representing a decrease from the corresponding period in 2018[194] - Research and development costs were US$14.0 million, reflecting the company's commitment to innovation despite financial losses[7] - Research and development costs amounted to US$14.0 million, a decrease from US$16.6 million in the first half of 2018[196] - Finance income decreased significantly to US$0.327 million from US$2.147 million in the previous year[7] - The Group reported a net finance income of US$0.3 million, down from US$2.1 million in the first half of 2018[196] Financial Position - Total assets decreased to US$98.4 million from US$107.0 million year-over-year[3] - Total non-current assets decreased from $23,213,000 as of December 31, 2018, to $22,855,000 as of June 30, 2019, representing a decline of 1.55%[11] - Current assets increased significantly from $75,537,000 as of December 31, 2018, to $80,891,000 as of June 30, 2019, marking an increase of 7.06%[11] - Total equity attributable to owners of the parent decreased from $78,460,000 as of December 31, 2018, to $68,865,000 as of June 30, 2019, reflecting a decline of 12.28%[13] - The company reported a loss for the period, with accumulated losses reaching $(67,369,000) as of June 30, 2019[13] - The company’s total current liabilities slightly decreased from $27,667,000 as of December 31, 2018, to $27,531,000 as of June 30, 2019, a reduction of 0.49%[11] - The net current assets decreased from $56,130,000 as of December 31, 2018, to $48,006,000 as of June 30, 2019, a decline of 14.49%[11] - The Group's non-current assets totaled US$21,673,000 as of June 30, 2019, slightly down from US$21,907,000 at the end of 2018[111] Cash Flow - Net cash from operating activities improved to $3,739,000 for the six months ended June 30, 2019, compared to a cash outflow of $12,368,000 in the same period of 2018[16] - Cash and cash equivalents at the end of the period rose to $24,556,000, up from $13,395,000 at the beginning of the period, indicating a substantial increase of 83.33%[16] - The net cash from investing activities for the six months ended June 30, 2019, was $8,200,000, compared to $10,413,000 in the same period of 2018[16] Dividends - The company did not declare an interim dividend for the six months ended June 30, 2019[5] - The company reported no dividend declared for the year ended December 31, 2018, and also resolved not to declare an interim dividend for the six months ended June 30, 2019[143][145] Lease Accounting - The Group adopted new and revised HKFRSs for the first time for the current period, with no significant financial impact except for HKFRS 16 Leases[29] - HKFRS 16 requires lessees to account for all leases under a single on-balance sheet model, which did not affect the Group's financials as a lessor[34] - The Group adopted HKFRS 16 using the modified retrospective method with an initial application date of January 1, 2019, without restating comparative information for 2018[35] - The Group recognized lease liabilities of US$3,238,000 as of January 1, 2019, based on the present value of remaining lease payments discounted at an incremental borrowing rate of 5.5%[53] - The total assets increased by US$3,238,000 due to the adoption of HKFRS 16, reflecting the increase in right-of-use assets[52] - The Group's lease liabilities increased due to the transition to HKFRS 16, reflecting the recognition of lease liabilities[52] Shareholder Information - The company had 2,480,252,351 shares issued and fully paid as of June 30, 2019, unchanged from the previous period[158] - The weighted average number of ordinary shares for diluted loss per share calculation remained stable at 2,480,028,242 shares for both periods[141] - The company granted 2,000,000 share options in May 2019 to the newly appointed Acting Chief Executive Officer[160] - The company granted 2,000,000 share options on May 9, 2019, with a total share option value of HK$118,000 (US$15,000) and an exercise price of HK$0.248[165] Market and Customer Information - Solomon Systech (International) Limited specializes in fabless semiconductor design, development, and sales for various smart devices, including smartphones and healthcare devices[18] - The Group operates in a single segment focused on the design, development, and sales of proprietary IC products and system solutions for various applications[94] - The Group's products were primarily sold to customers located in Hong Kong and Taiwan during the review period[97] - The largest customer contributed US$20,142,000 and the second largest contributed US$7,196,000, both exceeding 10% of total revenue for the period[117] Financial Instruments - The Group's financial instruments' fair values are assessed to be reasonable and appropriate at the end of the reporting period[78] - The Group's financial asset at fair value through profit or loss, specifically the call option over non-controlling interests, had a fair value of US$343,000 as of 30 June 2019, down from US$467,000 at the end of 2018, indicating a fair value loss of US$124,000[90] - The volatility used in the valuation of the call option is 50%, with a higher volatility leading to a higher fair value[79] - The risk-free interest rate for the valuation of the call option ranged from 1.43% to 1.5% as of 30 June 2019, compared to 1.18% to 3.01% at the end of 2018[79] - The price-to-sales ratio for the call option was 0.61 as of 30 June 2019, down from 0.72 at the end of 2018, suggesting a decrease in the perceived value of sales relative to the option[79]

Financial Performance - Revenue increased by approximately 19% to US$98.1 million in 2018, compared to US$82.5 million in 2017[6] - Gross profit was US$28.2 million, a decrease of about 3.9% from the previous year, with a gross margin of 28.7%, down 6.9 percentage points[7] - The Group recorded a net loss of US$13.8 million in 2018, compared to a net loss of US$10.3 million in 2017[6] - Total sales and shipments increased by around 19% and 37% to approximately US$98.1 million and 295.8 million units respectively[9] - The Group's total sales for the year ended December 31, 2018, were US$98.1 million, an increase from US$82.5 million in 2017, representing a growth of approximately 19.5%[34] - A net loss of US$13.8 million was recorded in 2018, compared to a net loss of US$10.3 million in 2017, indicating an increase in losses of approximately 34.3%[34] Cash and Financial Position - The Group's net cash position and financial assets at FVTPL remained healthy at around US$22.2 million as of December 31, 2018[9] - Total cash and cash equivalents as of 31 December 2018 amounted to US$13.4 million, down from US$23.3 million in 2017[51] - The Group disposed of approximately 60% of its net investment in financial assets to meet cash requirements during 2018[44] - The FVTPL Portfolio is expected to provide a stable stream of income, consisting mainly of marketable bonds and mutual funds[50] Operational Highlights - The Group's revenue growth was primarily driven by strong performance in bistable display driver ICs and large panel display driver ICs[26] - The PMOLED TDDI IC is expected to start mass production in 2019, contributing to future revenue streams[20] - Solomon Systech China has significantly increased its business share with key customer Panda-FPD, contributing to overall revenue growth[19] - The Group has achieved design wins for electronic shelf labels and mobile touch controller ICs with leading manufacturers, enhancing its customer base[20] - The Group launched several new products in 2018, including the significant PMOLED Touch and Display Driver Integration (TDDI) IC, expected to be a key revenue driver in 2019 and beyond[54] Research and Development - The Group's R&D expenditure in 2018 was approximately US$31.5 million, representing about 64.7% of total expenses and 32.1% of total revenue for the year[87] - The Group has been granted 9 patents and filed 23 patents in 2018, strengthening its intellectual property portfolio for future business growth[90] - The Group's bistable display driver IC business is projected to maintain strong growth momentum in 2019, driven by the trend towards unmanned stores and retail automation[77] Employee and Corporate Culture - As of December 31, 2018, the Group employed a total of 409 staff worldwide, with 332 being technical engineering staff[332] - Approximately 87% of the Group's employees hold a bachelor's degree or above, and around 43% have earned a master's degree or higher[332] - The Group dedicated over 4,300 man-hours to training and development in 2018, covering various areas including industrial and technical training[101] - The Company organized a range of activities in 2018 to promote employee well-being and work-life balance, including leisure activities for employees and their families[102] Corporate Governance - The company has adopted corporate governance principles emphasizing a quality board, effective internal controls, and stringent disclosure practices[144] - The Company has established its own written guidelines for directors and relevant employees regarding securities transactions[146] - The Company has a commitment to maintaining high standards of corporate governance as critical for long-term business success[144] - The Board consists of two Executive Directors, three Non-executive Directors, and three Independent Non-executive Directors, ensuring a diverse range of views for effective decision-making[152][157] Strategic Initiatives - The company provided guidance for the next fiscal year, projecting revenue growth of 10% to 12%[121] - New product launches are expected to contribute an additional $200 million in revenue, with a focus on innovative semiconductor technologies[122] - The company is expanding its market presence in Southeast Asia, targeting a 30% market share by 2025[123] - The management team emphasized a commitment to sustainability, with plans to reduce carbon emissions by 40% over the next five years[128]