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

• Market Cap: HK$1.21B
• Dividend Yield: N/A
• Average Volume (3M): 5.45M
• Price to Earnings (P/E): 15.3
• Beta (1Y): 1.82
• Revenue Growth: -26.17%
• EPS Growth: -48.28%
• Country: HK
• Employees: 379
• Sector: Technology
• Sector Strength: 98
• Industry: Semiconductors
• EPS (TTM): <0.01
• Shares Outstanding: 2,497,752,400
• 10 Day Avg. Volume: 8,282,300
• 30 Day Avg. Volume: 5,446,733
• PEG Ratio: N/A
• Price to Book (P/B): 0.00
• Price to Sales (P/S): 0.00
• P/FCF Ratio: 0.00
• 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: HK$0.46
• Price Target Upside: -4.97% Downside
• Rating Consensus: Moderate Buy
• Number of Analyst Covering: 1

• Rating: 70 Outperform
• Price Target: HK$0.50 ▲(4.17% Upside)

The stock's overall score is driven by strong technical indicators and a solid balance sheet, despite challenges in profitability and revenue growth. The absence of 2024 cash flow data and lack of earnings call insights add uncertainty, but the reasonable P/E ratio supports the valuation.

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 solutions. The company operates primarily in the consumer electronics sector, providing advanced display IC products and system solutions that cater to a wide range of applications, including smartphones, tablets, televisions, and wearables. Solomon Systech is recognized for its innovative technologies in OLED, LCD, and microdisplay driver ICs, serving a global clientele with a strong emphasis on quality and performance.

How the Company Makes Money

Solomon Systech generates revenue primarily through the sale of its integrated circuit products and solutions to original equipment manufacturers (OEMs) and other companies in the consumer electronics industry. The company's key revenue streams include the provision of display driver ICs, touch panel controller ICs, and other related semiconductor products. Solomon Systech's earnings are significantly influenced by its strategic partnerships with leading technology firms and its ability to innovate and adapt to the rapidly changing demands of the electronics market. Additionally, the company's focus on research and development allows it to maintain a competitive edge, ensuring sustained revenue growth through the continuous introduction of new and improved products.

Solomon Systech (International) Ltd. Financial Statement Overview

Summary

The financial performance is mixed. The balance sheet is strong with low debt and high equity, indicating financial stability. However, declining revenue and profit margins on the income statement, along with missing 2024 cash flow data, raise concerns about profitability and liquidity.

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: 0.48
• 50DMA: Positive
• 100DMA: Positive
• 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 0.48 is above the 20-day moving average (MA) of 0.46, above the 50-day MA of 0.45, and above the 200-day MA of 0.48, indicating a neutral trend. The MACD of <0.01 indicates Negative momentum. The RSI at 54.30 is Neutral, neither overbought nor oversold. The STOCH value of 53.85 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	HK$39.61B	43.19	9.53%	0.28%	-2.25%	-22.43%
2878	70 Outperform	HK$1.21B	15.35	7.58%	―	-26.17%	-48.28%
0522	65 Neutral	$28.72B	117.19	1.55%	0.88%	-0.64%	-39.74%
0085	65 Neutral	HK$3.67B	6.25	25.76%	4.97%	-22.20%	-14.43%
Sector *	57 Neutral	HK$14.25B	9.67	-0.60%	4.59%	7.04%	-42.47%
1347	51 Neutral	HK$86.57B	372.25	0.42%	0.38%	-2.06%	-83.44%
8490	46 Neutral	HK$98.06M	68.18	-21.90%	―	-8.34%	-8828.57%

Solomon Systech (International) Ltd. Corporate Events

Solomon Systech Announces Board Meeting to Review Interim Results

Solomon Systech (International) Ltd. has announced a board meeting scheduled for August 13, 2025, to review and approve the company’s unaudited consolidated interim results for the first half of the year, and to consider the payment of an interim dividend. This meeting is significant as it will provide insights into the company’s financial health and potential shareholder returns, impacting its market positioning and stakeholder interests.

Solomon Systech Enhances Governance with Nomination Committee Guidelines

Solomon Systech (International) Ltd. has outlined the terms of reference for its Nomination Committee, which is responsible for overseeing the nomination process for the company’s board of directors. The committee, consisting of at least three members with a majority being Independent Non-Executive Directors, is tasked with reviewing the board’s structure and composition, nominating candidates for board positions, and ensuring the independence of directors. This initiative aims to enhance corporate governance and strategic alignment within the company.

Solomon Systech Announces Leadership Changes with New Board Chairman

Solomon Systech (International) Ltd. announced a significant leadership change with the resignation of Mr. Ma Yuchuan as a non-executive director, chairman of the board, and chairman of the nomination committee, effective July 29, 2025. Mr. Ma’s departure is due to a change in his job engagements, and he leaves without any disputes or claims against the company. The company expressed gratitude for his contributions. Concurrently, Mr. Yang Kun has been appointed as the new non-executive director and chairman, bringing substantial industry experience from his previous roles in various technology companies. This leadership transition is expected to influence the company’s strategic direction and strengthen its market position.

Solomon Systech Announces Board Composition and Roles

Solomon Systech (International) Ltd. has announced the composition of its board of directors and their respective roles within the company. The board includes a mix of executive, non-executive, and independent non-executive directors, each serving on various committees such as the Audit, Remuneration, Nomination, and Investment Committees. This announcement provides clarity on the leadership structure and governance of the company, which is crucial for stakeholders to understand the decision-making framework and oversight mechanisms in place.

Solomon Systech Issues Profit Warning Amid Product Launch Delays

Solomon Systech (International) Ltd. has issued a profit warning, indicating a significant decrease in its unaudited consolidated profit for the first half of 2025, compared to the same period in 2024. The decline is attributed to a drop in average selling prices and shipment quantities due to delays in new product launches, as well as increased research and development costs. Despite these challenges, the company maintains a stable gross profit margin and anticipates a rebound in shipment volumes following the launch of new products, supported by its ongoing commitment to R&D.

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.