Solomon Systech (International) Ltd. (2878) AI Stock Analysis

• Market Cap: HK$1.10B
• Dividend Yield: N/A
• Average Volume (3M): 17.82M
• Price to Earnings (P/E): 21.3
• Beta (1Y): 1.76
• Revenue Growth: -25.16%
• EPS Growth: -51.97%
• Country: HK
• Employees: 379
• Sector: Technology
• Sector Strength: 88
• Industry: Semiconductors
• EPS (TTM): 0.01
• Shares Outstanding: 2,497,752,400
• 10 Day Avg. Volume: 10,768,600
• 30 Day Avg. Volume: 17,815,300
• PEG Ratio: -0.33
• Price to Book (P/B): 1.18
• Price to Sales (P/S): 1.42
• P/FCF Ratio: 9.07
• Enterprise Value/Market Cap: N/A
• Enterprise Value/Revenue: N/A
• Enterprise Value/Gross Profit: N/A
• Enterprise Value/Ebitda: N/A
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: Hold
• Number of Analyst Covering: 0
• EPS Forecast (FY): N/A
• Revenue Forecast (FY): N/A

• Rating: 56 Neutral
• Price Target: HK$0.50 ▲(13.64% Upside)

The overall stock score is primarily influenced by strong balance sheet health, but is significantly impacted by declining financial performance and bearish technical indicators. The valuation is moderate, but the lack of dividend yield and uncertain cash flow data add to the risks.

Solomon Systech (International) Ltd. Business Overview & Revenue Model

Company Description

Solomon Systech (International) Ltd. (2878) is a leading provider of innovative display and touch solutions, primarily serving the consumer electronics, automotive, and industrial sectors. The company specializes in the design and development of integrated circuit (IC) products, including display drivers, touch controllers, and related technologies. With a strong focus on R&D, Solomon Systech aims to deliver advanced solutions that enhance the performance and functionality of display systems across various applications.

How the Company Makes Money

Solomon Systech generates revenue primarily through the sale of its semiconductor products, including display drivers and touch controller ICs. The company operates on a business model that involves designing and manufacturing customized solutions for its clients, which allows for higher margins. Key revenue streams include direct sales to original equipment manufacturers (OEMs) and partnerships with electronic product manufacturers. Additionally, Solomon Systech benefits from long-term relationships with major clients in the consumer electronics and automotive industries, which provide a steady flow of orders. The company also invests in R&D to develop new technologies, enabling it to stay competitive and create additional revenue streams through licensing agreements for its intellectual property.

Solomon Systech (International) Ltd. Financial Statement Overview

Summary

The company shows strong balance sheet health with low debt and high equity, but declining revenue and profit margins pose challenges. The absence of 2024 cash flow data adds uncertainty to liquidity assessments.

Income Statement

The company's income statement shows a mixed performance. Gross profit margin improved slightly in 2024 at 33.54%, up from 30.26% in 2023. However, net profit margin has declined significantly to 8.93% in 2024 from 12.70% in 2023, indicating reduced profitability. Revenue growth has been negative since 2022, with a decrease of 25.89% in 2023 and 25.90% in 2024, suggesting a challenging market environment. EBIT and EBITDA margins have also decreased, reflecting pressure on operating efficiencies.

Balance Sheet

The balance sheet indicates strong liquidity with a high level of cash and short-term investments. The debt-to-equity ratio is low at 0.02 in 2024, showcasing minimal leverage risk. Return on Equity (ROE) has decreased to 7.39% in 2024 from 15.31% in 2023, indicating less efficient use of equity. However, the equity ratio remains robust at 83.73%, reflecting solid financial stability.

Cash Flow

Cash flow analysis is limited due to missing data for 2024. The free cash flow was strong in 2023 with a growth rate of 143.81% from 2022, but the absence of data in 2024 raises concerns about sustainability. The operating cash flow to net income ratio was above 1 in prior years, indicating good cash generation, but 2024 lacks this data, clouding current assessments.

Breakdown	TTM	Dec 2024	Dec 2023	Dec 2022	Dec 2021	Dec 2020
Income Statement
Total Revenue	97.46M	113.44M	153.15M	190.84M	168.12M	121.26M
Gross Profit	36.38M	38.05M	46.34M	65.47M	67.25M	35.84M
EBITDA	2.05M	5.99M	22.34M	27.72M	24.25M	7.17M
Net Income	6.66M	10.13M	19.44M	27.83M	23.78M	11.71M
Balance Sheet
Total Assets	176.49M	163.71M	157.43M	158.26M	139.91M	94.24M
Cash, Cash Equivalents and Short-Term Investments	112.51M	104.24M	82.86M	45.56M	24.76M	50.83M
Total Debt	3.96M	3.31M	3.16M	3.42M	2.71M	1.07M
Total Liabilities	35.37M	26.66M	30.50M	49.08M	53.21M	30.68M
Stockholders Equity	141.12M	137.04M	127.00M	109.25M	86.76M	63.44M
Cash Flow
Free Cash Flow	11.02M	17.79M	36.72M	15.05M	-7.52M	32.99M
Operating Cash Flow	13.33M	20.04M	37.81M	17.59M	-5.98M	34.14M
Investing Cash Flow	1.88M	4.44M	-865.00K	-2.17M	-1.25M	-128.00K
Financing Cash Flow	1.46M	-265.00K	-1.11M	7.80M	-20.18M	-1.24M

Solomon Systech (International) Ltd. Technical Analysis

• Technical Analysis Sentiment: Negative
• Last Price: 0.44
• 50DMA: Negative
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Positive

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2878, the sentiment is Negative. The current price of 0.44 is below the 20-day moving average (MA) of 0.46, below the 50-day MA of 0.51, and below the 200-day MA of 0.47, indicating a bearish trend. The MACD of -0.02 indicates Negative momentum. The RSI at 34.47 is Neutral, neither overbought nor oversold. The STOCH value of 11.11 is Positive, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for HK:2878.

Solomon Systech (International) Ltd. Peers Comparison

Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
Sector *	61 Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
0085	61 Neutral	HK$2.94B	7.07	17.96%	6.67%	-18.35%	-6.00%
1385	59 Neutral	HK$46.87B	63.14	7.85%	0.22%	12.62%	-4.75%
0522	58 Neutral	$29.49B	120.33	1.55%	0.67%	-0.64%	-39.74%
2878	56 Neutral	HK$1.10B	21.26	4.98%	―	-25.16%	-51.97%
1347	51 Neutral	HK$155.90B	629.57	0.12%	0.23%	19.15%	-94.32%
8490	41 Neutral	HK$86.78M	―	-41.46%	―	-26.02%	-4977.27%