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

• Market Cap: €1.12B
• Dividend Yield: N/A
• Average Volume (3M): 4.88M
• Price to Earnings (P/E): 14.2
• Beta (1Y): 1.76
• Revenue Growth: -26.17%
• EPS Growth: -48.28%
• Country: HK
• Employees: 379
• Sector: Technology
• Sector Strength: 86
• Industry: Semiconductors
• EPS (TTM): 0.03
• Shares Outstanding: 2,497,752,400
• 10 Day Avg. Volume: 4,642,600
• 30 Day Avg. Volume: 4,875,666
• PEG Ratio: -0.58
• Price to Book (P/B): 1.10
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 11.56
• Enterprise Value/Market Cap: 0.04
• Enterprise Value/Revenue: 0.07
• Enterprise Value/Gross Profit: 1.07
• Enterprise Value/Ebitda: 0.77
• 1Y Price Target: N/A
• Price Target Upside: N/A
• Rating Consensus: N/A
• Number of Analyst Covering: 0

• Rating: 70 Outperform
• Price Target: HK$0.50 ▲(11.11%Upside)

The robust balance sheet and reasonable valuation are the main strengths supporting the stock's score. However, declining profitability and the lack of current cash flow data are significant concerns. Positive technical indicators suggest short-term potential, but long-term growth relies on addressing profitability issues.

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

Company Description

Solomon Systech (International) Ltd. (2878) is a leading semiconductor company specializing in the design, development, and sales of integrated circuit products. The company primarily focuses on display IC products and system solutions, serving sectors such as consumer electronics, industrial applications, and automotive electronics. Their core products include display driver ICs, touch panel controllers, and microcontrollers.

How the Company Makes Money

Solomon Systech (International) Ltd. generates revenue primarily through the sale of its semiconductor products, including display driver ICs and touch panel controllers. The company partners with original equipment manufacturers (OEMs) and other technology firms to integrate its IC solutions into various electronic devices, such as smartphones, tablets, TVs, and industrial displays. Revenue is earned through both direct sales and long-term agreements with these partners. Additionally, the company invests in research and development to innovate new products and maintain a competitive edge, which can lead to additional revenue streams through new product offerings.

Solomon Systech (International) Ltd. Financial Statement Overview

Summary

Despite strong balance sheet health with low debt and high equity, the declining revenue and profit margins in the income statement and the lack of 2024 cash flow data indicate financial challenges. The company must address profitability issues to sustain its financial health.

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

Solomon Systech (International) Ltd. Technical Analysis

• Technical Analysis Sentiment: Positive
• Last Price: 0.45
• 50DMA: Positive
• 100DMA: Negative
• 200DMA: Negative
• MACD: Negative
• RSI: Neutral
• STOCH: Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For HK:2878, the sentiment is Positive. The current price of 0.45 is above the 20-day moving average (MA) of 0.43, above the 50-day MA of 0.41, and below the 200-day MA of 0.47, indicating a neutral trend. The MACD of 0.01 indicates Negative momentum. The RSI at 57.44 is Neutral, neither overbought nor oversold. The STOCH value of 72.73 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Positive 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
1385	77 Outperform	$36.51B	40.69	9.53%	0.37%	-2.25%	-22.43%
2878	70 Outperform	€1.12B	14.24	7.58%	―	-26.17%	-48.28%
0085	66 Neutral	HK$2.84B	4.84	25.76%	7.50%	-22.20%	-14.43%
1347	61 Neutral	HK$68.99B	295.69	0.42%	0.47%	-2.06%	-83.44%
0522	58 Neutral	$24.08B	69.43	2.23%	2.42%	-9.99%	-51.96%
Sector *	56 Neutral	$3.16B	4.94	-5.68%	5.81%	7.96%	-51.05%
8490	39 Underperform	HK$84.66M	68.18	-21.90%	―	-8.34%	-8828.57%

Solomon Systech (International) Ltd. Corporate Events

Solomon Systech’s AGM Resolutions Approved by Shareholders

Solomon Systech (International) Ltd. announced that all resolutions proposed at their Annual General Meeting on June 17, 2025, were approved by shareholders. These resolutions included the re-election of directors, re-appointment of auditors, and granting mandates for share repurchase and issuance, reflecting strong shareholder support and potentially enhancing the company’s governance and financial flexibility.

Solomon Systech Announces 2025 AGM with Key Resolutions

Solomon Systech (International) Limited has announced its upcoming Annual General Meeting (AGM) scheduled for June 17, 2025, in Hong Kong. The meeting will address several key resolutions, including the re-election of directors, the re-appointment of the independent auditor, and the authorization for the board to fix their remuneration. Additionally, the company seeks approval for a general mandate to repurchase shares and to issue additional shares, reflecting strategic moves to enhance shareholder value and operational flexibility.