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2878

Solomon Systech (International) SEHK:2878 Stock Report

Last Price

HK$0.43

Market Cap

HK$1.1b

7D

-11.2%

1Y

-38.7%

Updated

30 Sep, 2022

Data

Company Financials
2878 fundamental analysis
Snowflake Score
Valuation2/6
Future Growth0/6
Past Performance6/6
Financial Health5/6
Dividends1/6

2878 Stock Overview

Solomon Systech (International) Limited, an investment holding company, operates as a fabless semiconductor company.

Solomon Systech (International) Competitors

Price History & Performance

Summary of all time highs, changes and price drops for Solomon Systech (International)
Historical stock prices
Current Share PriceHK$0.43
52 Week HighHK$0.96
52 Week LowHK$0.42
Beta1.28
1 Month Change-35.08%
3 Month Change-25.00%
1 Year Change-38.73%
3 Year Change139.01%
5 Year Change22.54%
Change since IPO-76.61%

Recent News & Updates

Sep 19
Under The Bonnet, Solomon Systech (International)'s (HKG:2878) Returns Look Impressive

Under The Bonnet, Solomon Systech (International)'s (HKG:2878) Returns Look Impressive

There are a few key trends to look for if we want to identify the next multi-bagger. Amongst other things, we'll want...

Jun 10
Solomon Systech (International) Limited's (HKG:2878) Business Is Trailing The Market But Its Shares Aren't

Solomon Systech (International) Limited's (HKG:2878) Business Is Trailing The Market But Its Shares Aren't

There wouldn't be many who think Solomon Systech (International) Limited's ( HKG:2878 ) price-to-earnings (or "P/E...

Shareholder Returns

2878HK SemiconductorHK Market
7D-11.2%-3.7%-4.4%
1Y-38.7%-34.6%-28.8%

Return vs Industry: 2878 underperformed the Hong Kong Semiconductor industry which returned -34.8% over the past year.

Return vs Market: 2878 underperformed the Hong Kong Market which returned -29.1% over the past year.

Price Volatility

Is 2878's price volatile compared to industry and market?
2878 volatility
2878 Average Weekly Movement11.4%
Semiconductor Industry Average Movement6.6%
Market Average Movement6.4%
10% most volatile stocks in HK Market12.6%
10% least volatile stocks in HK Market3.1%

Stable Share Price: 2878 is more volatile than 75% of Hong Kong stocks over the past 3 months, typically moving +/- 11% a week.

Volatility Over Time: 2878's weekly volatility (11%) has been stable over the past year, but is still higher than 75% of Hong Kong stocks.

About the Company

FoundedEmployeesCEOWebsite
1999311Raymond Wanghttps://www.solomon-systech.com

Solomon Systech (International) Limited, an investment holding company, operates as a fabless semiconductor company. The company primarily designs, develops, and sells display integrated circuits (IC) products and system solutions. It offers passive matrix organic light emitting diode display ICs; active-matrix organic light emitting diode display ICs; organic light emitting diode display and lighting driver ICs; and bistable display driver ICs.

Solomon Systech (International) Fundamentals Summary

How do Solomon Systech (International)'s earnings and revenue compare to its market cap?
2878 fundamental statistics
Market CapHK$1.09b
Earnings (TTM)HK$273.42m
Revenue (TTM)HK$1.58b

4.0x

P/E Ratio

0.7x

P/S Ratio

Earnings & Revenue

Key profitability statistics from the latest earnings report
2878 income statement (TTM)
RevenueUS$201.84m
Cost of RevenueUS$121.49m
Gross ProfitUS$80.35m
Other ExpensesUS$45.52m
EarningsUS$34.83m

Last Reported Earnings

Jun 30, 2022

Next Earnings Date

n/a

Earnings per share (EPS)0.014
Gross Margin39.81%
Net Profit Margin17.26%
Debt/Equity Ratio0.2%

How did 2878 perform over the long term?

See historical performance and comparison

Dividends

2.3%

Current Dividend Yield

7%

Payout Ratio
We’ve recently updated our valuation analysis.

Valuation

Is 2878 undervalued compared to its fair value, analyst forecasts and its price relative to the market?

Valuation Score

2/6

Valuation Score 2/6

  • Price-To-Earnings vs Peers

  • Price-To-Earnings vs Industry

  • Price-To-Earnings vs Fair Ratio

  • Below Fair Value

  • Significantly Below Fair Value

  • Analyst Forecast

Key Valuation Metric

Which metric is best to use when looking at relative valuation for 2878?

Other financial metrics that can be useful for relative valuation.

2878 key valuation metrics and ratios. From Price to Earnings, Price to Sales and Price to Book to Price to Earnings Growth Ratio, Enterprise Value and EBITDA.
Key Statistics
Enterprise Value/Revenue0.5x
Enterprise Value/EBITDA2.7x
PEG Ration/a

Price to Earnings Ratio vs Peers

How does 2878's PE Ratio compare to its peers?

2878 PE Ratio vs Peers
The above table shows the PE ratio for 2878 vs its peers. Here we also display the market cap and forecasted growth for additional consideration.
CompanyPEEstimated GrowthMarket Cap
Peer Average8x
85 China Electronics Huada Technology
4.7xn/aHK$1.3b
6939 MEGAIN Holding (Cayman)
5.7xn/aHK$274.9m
1305 Wai Chi Holdings
3.8xn/aHK$262.4m
8490 Niche-Tech Group
17.8xn/aHK$148.2m
2878 Solomon Systech (International)
4xn/aHK$1.1b

Price-To-Earnings vs Peers: 2878 is good value based on its Price-To-Earnings Ratio (4x) compared to the peer average (8x).


Price to Earnings Ratio vs Industry

How does 2878's PE Ratio compare vs other companies in the Asian Semiconductor Industry?

Price-To-Earnings vs Industry: 2878 is good value based on its Price-To-Earnings Ratio (4x) compared to the Asian Semiconductor industry average (15.3x)


Price to Earnings Ratio vs Fair Ratio

What is 2878's PE Ratio compared to its Fair PE Ratio? This is the expected PE Ratio taking into account the company's forecast earnings growth, profit margins and other risk factors.

2878 PE Ratio vs Fair Ratio.
Fair Ratio
Current PE Ratio4x
Fair PE Ration/a

Price-To-Earnings vs Fair Ratio: Insufficient data to calculate 2878's Price-To-Earnings Fair Ratio for valuation analysis.


Share Price vs Fair Value

What is the Fair Price of 2878 when looking at its future cash flows? For this estimate we use a Discounted Cash Flow model.

Below Fair Value: 2878 (HK$0.44) is trading above our estimate of fair value (HK$0.15)

Significantly Below Fair Value: 2878 is trading above our estimate of fair value.


Analyst Price Targets

What is the analyst 12-month forecast and do we have any statistical confidence in the consensus price target?

Analyst Forecast: Insufficient data to show price forecast.


Discover undervalued companies

Future Growth

How is Solomon Systech (International) forecast to perform in the next 1 to 3 years based on estimates from 0 analysts?

Future Growth Score

0/6

Future Growth Score 0/6

  • Earnings vs Savings Rate

  • Earnings vs Market

  • High Growth Earnings

  • Revenue vs Market

  • High Growth Revenue

  • Future ROE


6.5%

Forecasted Semiconductors industry annual growth in earnings

In this section we usually present revenue and earnings growth projections based on the consensus estimates of professional analysts to help investors understand the company’s ability to generate profit. But as Solomon Systech (International) has not provided enough past data and has no analyst forecast, its future earnings cannot be reliably calculated by extrapolating past data or using analyst predictions.

This is quite a rare situation as 97% of companies covered by SimplyWall St do have past financial data.


Discover growth companies

Past Performance

How has Solomon Systech (International) performed over the past 5 years?

Past Performance Score

6/6

Past Performance Score 6/6

  • Quality Earnings

  • Growing Profit Margin

  • Earnings Trend

  • Accelerating Growth

  • Earnings vs Industry

  • High ROE


54.4%

Historical annual earnings growth

Earnings and Revenue History

Quality Earnings: 2878 has high quality earnings.

Growing Profit Margin: 2878's current net profit margins (17.3%) are higher than last year (13.1%).


Past Earnings Growth Analysis

Earnings Trend: 2878 has become profitable over the past 5 years, growing earnings by 54.4% per year.

Accelerating Growth: 2878's earnings growth over the past year (93.3%) exceeds its 5-year average (54.4% per year).

Earnings vs Industry: 2878 earnings growth over the past year (93.3%) exceeded the Semiconductor industry 73.3%.


Return on Equity

High ROE: 2878's Return on Equity (32.9%) is considered high.


Discover strong past performing companies

Financial Health

How is Solomon Systech (International)'s financial position?

Financial Health Score

5/6

Financial Health Score 5/6

  • Short Term Liabilities

  • Long Term Liabilities

  • Debt Level

  • Reducing Debt

  • Debt Coverage

  • Interest Coverage

Financial Position Analysis

Short Term Liabilities: 2878's short term assets ($150.9M) exceed its short term liabilities ($61.4M).

Long Term Liabilities: 2878's short term assets ($150.9M) exceed its long term liabilities ($1.3M).


Debt to Equity History and Analysis

Debt Level: 2878 has more cash than its total debt.

Reducing Debt: 2878's debt to equity ratio has reduced from 0.3% to 0.2% over the past 5 years.

Debt Coverage: 2878's operating cash flow is negative, therefore debt is not well covered.

Interest Coverage: 2878 earns more interest than it pays, so coverage of interest payments is not a concern.


Balance Sheet


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Dividend

What is Solomon Systech (International) current dividend yield, its reliability and sustainability?

Dividend Score

1/6

Dividend Score 1/6

  • Notable Dividend

  • High Dividend

  • Stable Dividend

  • Growing Dividend

  • Earnings Coverage

  • Cash Flow Coverage


2.30%

Current Dividend Yield

Dividend Yield vs Market

Solomon Systech (International) Dividend Yield vs Market
How does Solomon Systech (International) dividend yield compare to the market?
SegmentDividend Yield
Company (Solomon Systech (International))2.3%
Market Bottom 25% (HK)3.0%
Market Top 25% (HK)8.9%
Industry Average (Semiconductor)2.5%
Analyst forecast in 3 Years (Solomon Systech (International))n/a

Notable Dividend: 2878's dividend (2.3%) isn’t notable compared to the bottom 25% of dividend payers in the Hong Kong market (2.98%).

High Dividend: 2878's dividend (2.3%) is low compared to the top 25% of dividend payers in the Hong Kong market (8.91%).


Stability and Growth of Payments

Stable Dividend: Too early to tell whether 2878's dividend payments have been stable as they only just started paying a dividend.

Growing Dividend: Too early to tell if 2878's dividend payments are increasing as they only just started paying a dividend.


Earnings Payout to Shareholders

Earnings Coverage: With its low payout ratio (7.2%), 2878's dividend payments are thoroughly covered by earnings.


Cash Payout to Shareholders

Cash Flow Coverage: 2878 is paying a dividend but the company has no free cash flows.


Discover strong dividend paying companies

Management

How experienced are the management team and are they aligned to shareholders interests?

1.7yrs

Average management tenure


CEO

Raymond Wang (56 yo)

3.5yrs

Tenure

US$743,000

Compensation

Mr. Wah Chi Wang, also known as Raymond, serves as Chief Executive Officer at Solomon Systech (International) Limited. He serves as Executive Director at Solomon Systech (International) Limited since March...


CEO Compensation Analysis

Raymond Wang's Compensation vs Solomon Systech (International) Earnings
How has Raymond Wang's remuneration changed compared to Solomon Systech (International)'s earnings?
DateTotal Comp.SalaryCompany Earnings
Jun 30 2022n/an/a

US$35m

Mar 31 2022n/an/a

US$29m

Dec 31 2021US$743kUS$628k

US$24m

Sep 30 2021n/an/a

US$21m

Jun 30 2021n/an/a

US$18m

Mar 31 2021n/an/a

US$15m

Dec 31 2020US$601kUS$577k

US$12m

Sep 30 2020n/an/a

-US$791k

Jun 30 2020n/an/a

-US$13m

Mar 31 2020n/an/a

-US$20m

Dec 31 2019US$230kUS$206k

-US$27m

Compensation vs Market: Raymond's total compensation ($USD743.00K) is above average for companies of similar size in the Hong Kong market ($USD241.54K).

Compensation vs Earnings: Raymond's compensation has increased by more than 20% in the past year.


Leadership Team

Experienced Management: 2878's management team is not considered experienced ( 1.7 years average tenure), which suggests a new team.


Board Members

Experienced Board: 2878's board of directors are considered experienced (4 years average tenure).


Ownership

Who are the major shareholders and have insiders been buying or selling?


Insider Trading Volume

Insider Buying: Insufficient data to determine if insiders have bought more shares than they have sold in the past 3 months.


Ownership Breakdown

What is the ownership structure of 2878?
Owner TypeNumber of SharesOwnership Percentage
Individual Insiders9,600,0000.4%
Institutions21,585,9490.9%
General Public2,463,166,40298.7%

Dilution of Shares: Shareholders have not been meaningfully diluted in the past year.


Top Shareholders

Top 6 shareholders own 1.25% of the company
OwnershipNameSharesCurrent ValueChange %Portfolio %
0.63%
Dimensional Fund Advisors LP
15,795,949$6.9m1.89%no data
0.22%
Wah Chi Wang
5,600,000$2.4m0%no data
0.18%
State Street Global Advisors, Inc.
4,478,000$1.9m2.38%no data
0.096%
Heung Ying Leung
2,400,000$1.0m0%no data
0.064%
Wei Fu Sheu
1,600,000$696.0k0%no data
0.053%
Bessemer Investment Management LLC
1,312,000$570.7k-53.57%no data

Company Information

Solomon Systech (International) Limited's employee growth, exchange listings and data sources


Key Information

  • Name: Solomon Systech (International) Limited
  • Ticker: 2878
  • Exchange: SEHK
  • Founded: 1999
  • Industry: Semiconductors
  • Sector: Semiconductors
  • Implied Market Cap: HK$1.085b
  • Shares outstanding: 2.49b
  • Website: https://www.solomon-systech.com

Number of Employees


Location

  • Solomon Systech (International) Limited
  • Wireless Centre
  • Unit 607-613, 6th Floor
  • Sha Tin
  • New Territories
  • Hong Kong


Listings

TickerExchangePrimary SecuritySecurity TypeCountryCurrencyListed on
2878SEHK (The Stock Exchange of Hong Kong Ltd.)YesOrdinary SharesHKHKDApr 2004
RZFDB (Deutsche Boerse AG)YesOrdinary SharesDEEURApr 2004

Company Analysis and Financial Data Status

All financial data provided by Standard & Poor's Capital IQ.
DataLast Updated (UTC time)
Company Analysis2022/09/30 00:00
End of Day Share Price2022/09/30 00:00
Earnings2022/06/30
Annual Earnings2021/12/31


Unless specified all financial data is based on a yearly period but updated quarterly. This is known as Trailing Twelve Month (TTM) or Last Twelve Month (LTM) Data. Learn more here.