Share Options - As of June 30, 2023, the weighted average exercise price of unexercised share options was HK$0.684, with a total of 30,150,000 options remaining[3]. - During the period, 1,300,000 share options were exercised at a weighted average subscription price of HK$0.2181, generating approximately US$37,000 in cash before expenses[15]. - The company granted 5,900,000 share options during the period at an average exercise price of HK$0.470[3]. - The average closing price of the company's ordinary shares on the exercise date of share options was HK$0.49[37]. - The company had 354,297 dilutive share options outstanding for the six months ended June 30, 2023, compared to 1,283,976 in the same period of 2022[27]. - The total number of share options granted during the year is 30,150 thousand units[200]. - The total number of share options exercised during the year is 5,900 thousand units[200]. - The total number of share options lapsed/forfeited during the year is 1,300 thousand units[200]. - The total number of share options held as of June 30, 2023 is 27,150 thousand units[200]. - The exercise price per share for options granted on June 22, 2022 is HK$0.530[200]. - The exercise price per share for options granted on March 24, 2023 is HK$0.546[200]. - The exercise price per share for options granted on May 25, 2023 is HK$0.463[200]. - The vesting period for options granted on June 22, 2022 is from June 22, 2022 to June 21, 2023[200]. - The exercise period for options granted on May 25, 2023 is from May 25, 2023 to May 25, 2025[200]. - The total number of share options held on June 30, 2023 is 30,150 thousand units[200]. Financial Performance - Revenue for the six months ended June 30, 2023, was US$85.3 million, a decrease of 21.4% compared to US$108.5 million in the same period of 2022[63]. - Gross profit for the same period was US$27.9 million, down 33.8% from US$42.2 million year-over-year[63]. - Profit attributable to owners of the parent was US$13.2 million, reflecting a decline of 39.5% from US$21.8 million in the prior year[63]. - Earnings per share decreased to 0.53 US cents, a drop of 39.1% compared to 0.87 US cents in the previous year[63]. - Profit before tax decreased to $13,165,000, a decline of 39.5% from $21,771,000 in the previous year[66]. - Profit for the period was $13,165,000, compared to $21,758,000 in the same period last year, representing a decrease of 39.5%[67]. - Total comprehensive income for the period was $10,731,000, down from $21,871,000, a decrease of 51.0%[67]. - The profit for the period ending June 30, 2023, is reported at US$13.165 million, compared to US$21.760 million for the same period in 2022, indicating a decrease of approximately 39.5%[97]. Assets and Liabilities - Total assets increased to US$160.2 million, a slight rise of 1.2% from US$158.3 million at the end of 2022[62]. - Shareholders' funds rose to US$120.2 million, marking a 10.1% increase from US$109.2 million at the end of 2022[62]. - Cash and cash equivalents at the end of the period were US$70.874 million, up from US$46.420 million in the previous year[54]. - Total current assets increased to $151,435,000 from $146,126,000, reflecting a growth of 3.5%[69]. - Net current assets rose to $111,800,000, compared to $97,739,000, indicating an increase of 14.3%[69]. - Total assets less current liabilities amounted to $120,575,000, up from $109,876,000, a growth of 9.5%[69]. - The total liabilities related to contracts decreased from US$6,346,000 at the end of 2022 to US$5,773,000 as of June 30, 2023[9]. - Trade payables as of June 30, 2023, amounted to US$13,935,000, a decrease from US$15,807,000 as of December 31, 2022[9]. - The ageing analysis of trade payables showed that 1-30 days overdue payables were US$7,715,000, while those overdue by 61-90 days were US$1,311,000[13]. - Trade receivables as of June 30, 2023, amounted to US$17,678,000, down from US$19,227,000 as of December 31, 2022, reflecting a decrease of approximately 8.06%[33]. - The impairment provision for trade receivables was US$173,000 as of June 30, 2023, slightly improved from US$214,000 in the previous year[33]. - The company reported a reversal of impairment losses of US$41,000 during the period[7]. Dividends - No interim dividend was declared for the six months ended June 30, 2023, consistent with the previous year[30]. - The company does not recommend the payment of an interim dividend for the six months ended June 30, 2023[64]. - The company did not declare or pay any dividends for the year ended December 31, 2022[28]. Market Performance - Sales in Hong Kong and Mainland China amounted to US$46,427,000, down from US$62,675,000, reflecting a decline of 26%[132]. - The Group's sales in Taiwan decreased by 47.3% to US$9,899,000 from US$18,734,000[132]. - Sales in Japan increased by 31.1% to US$11,968,000 compared to US$9,092,000 in the previous year[132]. - The Group's sales in Europe rose by 65.5% to US$12,600,000 from US$7,618,000[132]. - Revenue from new display ICs was US$39,847,000, down from US$49,731,000 in the previous year, representing a decline of 19.0%[156]. - The largest customer contributed US$32,566,000 in sales, accounting for over 10% of the Group's total revenue, compared to US$43,146,000 from the largest customer in the same period last year[159]. Financial Management - The current ratio improved to 3.82 from 3.02, indicating better short-term financial stability[44]. - The debt to equity ratio remained low at 0.00, down from 0.013, reflecting a strong equity position[44]. - The fair value of financial instruments approximates their carrying amounts due to their short-term nature, indicating effective liquidity management[94]. - The Group's cash and cash equivalents, along with other financial assets, have been assessed to have fair values closely aligned with their carrying amounts, ensuring stability in financial reporting[94]. - The Group has not identified any significant impact on its financial position or performance due to the recent accounting policy changes[88]. - The Group did not make any provision for Hong Kong profits tax due to available tax losses from prior years[179]. Operational Insights - The company specializes in the design, development, and sales of integrated circuits for various display applications, indicating ongoing focus on innovation and market expansion[74]. - The Group has maintained a single operating segment focused on the design, development, and sales of proprietary IC products and system solutions[148]. - The Group's operating segments are assessed by the Executive Director and senior management to allocate resources effectively[126]. - The Group has applied amendments to HKAS 1 and HKAS 12 since January 1, 2023, which are expected to impact annual consolidated financial statements but did not affect interim financial information[111][115]. - The Group has adopted new and revised HKFRSs, including HKFRS 17 for insurance contracts, which may impact future financial reporting[108].

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） 截至2023年6月30日止6個月 中期業績公告 財務摘要 • 銷售額下跌約21.4%至85.3百萬美元 • 毛利為27.9百萬美元，毛利率為32.7% • 本公司擁有人應佔期內溢利淨額為13.2百萬美元 • 每股盈利為0.53美仙（等同於4.11港仙） ...

Financial Performance - In 2022, the Group's sales revenue grew by 13.5% to US$190.8 million, and profit attributable to owners of the parent increased by 16.8% to US$27.8 million[25]. - In 2022, the Group's sales revenue increased by 13.5% to $190.8 million, with a profit attributable to shareholders rising by 16.8% to $27.8 million[29]. - Revenue for 2022 was US$190.8 million, representing a 13.5% increase from US$168.1 million in 2021[48]. - Gross profit decreased to US$65.5 million in 2022, down 2.7% from US$67.3 million in 2021, resulting in a gross margin decline of 5.7 percentage points to 34.3%[48]. - The Group's earnings per share increased by 10% to $0.011 in the reporting year[29]. - Shareholders' funds rose by 26.0% to US$109.2 million in 2022, up from US$86.7 million in 2021[63]. - Total assets as of December 31, 2022, were US$158.3 million, a 13.2% increase from US$139.9 million in 2021[63]. - The current ratio improved to 3.02 in 2022 from 2.35 in 2021, indicating better short-term financial health[63]. Market Trends and Challenges - The semiconductor market is expected to shrink further in 2023 due to declining demand for chips in smartphones and personal computers[20]. - The semiconductor industry entered a destocking phase in the second half of 2022, with expectations for the global chip market to shrink further in 2023 due to declining demand for semiconductors in smartphones and personal computers[31]. - The consumer electronics market is expected to face short-term growth challenges due to weakened consumer demand and the rebound effect from the previous overheating of the electronics industry[131]. - The semiconductor industry is projected to continue de-stocking in the first half of 2023, with more opportunities for downstream collaboration in product development anticipated in the second half as COVID-19 restrictions ease in mainland China[141]. Product Development and Innovation - The Group commenced mass production of Active Matrix Electrophoretic Display (AMEPD) driver ICs for Advanced Color e-Paper (ACeP) products in 2022, with a launch of Spectra™ 3100 scheduled for 2023[2]. - The Group launched the IC-SSD2363, the world's first small-sized passive matrix micro-LED display driver, in Q1 2023, targeting applications in wearable devices and home appliances[3]. - The Group's new generation electronic ink platform, Spectra™ 3100, is expected to launch in 2023, enhancing growth potential for new display IC business[90]. - The Group is co-developing a human interface display platform targeting mass production in the second half of 2023[102]. - The Group continues to expand its product portfolio by launching new PMOLED display ICs with built-in Character ROMs[42]. - The Group's large display IC solutions support applications in monitors, notebooks, and large-size TVs across various resolutions including HD, FHD, QHD, and UHD 4K/8K[46]. - The Group is preparing to capitalize on the global economic recovery, actively seeking opportunities despite ongoing market challenges[140]. - The Group emphasizes the importance of novel product development to keep pace with rapid technological advancements and market trends[106]. - The Group plans to focus on developing AR and VR products to capture opportunities in the Metaverse[111]. Strategic Focus and Market Position - The Group remains the world's largest manufacturer of display driver ICs for PMOLED display products, maintaining a dominant market share in terms of units shipped in 2022[30]. - The Group has strategically adjusted its product mix to focus on high-demand areas such as electronic shelf labels, smart home products, and industrial applications[30]. - The Group aims to enhance its R&D capabilities and diversify its product portfolio to capture opportunities arising from the digital economy[11]. - The Group has secured orders for game controller ICs and MIPI Bridge ICs to be delivered in 2024, ensuring stable income and cash flow[10]. - The demand for game console controller ICs is rapidly increasing, with successful manufacturing orders secured into 2024, contributing significantly to the Group's sustainable revenue base[104]. - Solomon Systech is shifting resources towards smart home devices and industrial appliances in response to favorable demand in these sectors[79]. Cost Management and Pricing Strategy - The Group adjusted the average unit price of some products in 2022 to maintain competitiveness amid changing market conditions[25]. - The average selling price of some products was adjusted in 2022 to maintain competitiveness amid market changes[29]. - The Group adjusted the average selling price of its products in response to rising raw material prices and production costs[98]. - Despite the easing of supply chain issues and chip shortages, raw material costs remain under pressure, prompting the Group to focus on cost control and the development of high value-added products[139]. Corporate Governance - The Remuneration Committee confirmed the remuneration policy for Executive Directors and reviewed their performance in 2022[171]. - The Nomination Committee consists of one Non-executive Director and three Independent Non-executive Directors, ensuring a majority of independent members[172]. - The Remuneration Committee meets at least once a year to review and approve compensation arrangements for Executive Directors and senior management[190]. - The remuneration bands for Executive Directors include 3 individuals earning up to HK$1,000,000, 4 earning between HK$1,500,001 and HK$2,000,000, 1 earning between HK$2,000,001 and HK$2,500,000, and 1 earning between HK$5,500,001 and HK$6,000,000[193]. - The Board has adopted a nomination policy to ensure a balance of skills, experience, and diversity among Directors[197]. - The Group is currently revisiting accounting policy disclosures to ensure consistency with amendments to HKAS 1 effective from January 1, 2023[200].

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]