Solomon Systech International Ltd revenue growth accelerated from 8.9% in 2014 to 18.0% in 2015
23/03/2016 • About Solomon Systech International Ltd (
$2878) • By InTwits
Solomon Systech International Ltd reported 2015 financial results today. Overall the company's long term financial model is characterised by the following facts:
- Solomon Systech International Ltd doesn't have a profitable business model yet: 2015 ROIC is -7.3%
- The company operates at negative EBITDA Margin: -10.5%
- Solomon Systech International Ltd motivates its personel by high Stock Based Compensation (SBC): average SBC/Revenue for 2011-2015 was 0.0%. On average EBITDA Margin was -11.7% for the sames years0
- Solomon Systech International Ltd has low CAPEX intensity: 5 year average CAPEX/Revenue was 1.7%. At the same time it's a lot of higher than industry average of 38.8%.
- CAPEX is quite volatile: 1.9 in 2015, 0.47 in 2014, 0.38 in 2013, 0.23 in 2012, 2.0 in 2011
- The company has unprofitable business model: ROIC is at -7.3%
- It operates with high leverage: Net Debt/EBITDA is 82.7x while industry average is 0.8x
Below you can find a comprehensive analysis of the key data driving the company's performance and stock price.
Solomon Systech International Ltd ($2878) key annual financial indicators
| mln. $ | 2011 | 2012 | 2013 | 2014 | 2015 | 2015/2014 |
|---|
P&L
|
|---|
| Revenue | 51.600 | 65.123 | 55.150 | 60.072 | 70.902 | 18.0% |
| Gross Profit | 15.756 | 25.144 | 20.996 | 20.796 | 23.218 | 11.6% |
| SG&A | | 11.363 | 11.222 | 11.065 | 11.886 | 7.4% |
| EBITDA | -11.291 | -4.291 | -6.419 | -5.968 | -7.463 | 25.1% |
| Net Income | -17.591 | -1.370 | 1.334 | -3.005 | -6.435 | 114.1% |
Balance Sheet
|
|---|
| Cash | 51.660 | 36.816 | 12.181 | 25.013 | 26.099 | 4.3% |
| Short Term Debt | 0.099 | 0.098 | 0.097 | 0.089 | 0.083 | -6.7% |
| Long Term Debt | 0.579 | 0.500 | 0.402 | 0.288 | 0.187 | -35.1% |
Cash flow
|
|---|
| Capex | 1.969 | 0.231 | 0.377 | 0.473 | 1.853 | 291.8% |
Ratios
|
|---|
| Revenue growth | -39.1% | 26.2% | -15.3% | 8.9% | 18.0% | |
| EBITDA growth | 15,802.8% | -62.0% | 49.6% | -7.0% | 25.1% | |
| Gross Margin | 30.5% | 38.6% | 38.1% | 34.6% | 32.7% | -1.9% |
| EBITDA Margin | -21.9% | -6.6% | -11.6% | -9.9% | -10.5% | -0.6% |
| Net Income Margin | -34.1% | -2.1% | 2.4% | -5.0% | -9.1% | -4.1% |
| SG&A, % of revenue | | 17.4% | 20.3% | 18.4% | 16.8% | -1.7% |
| CAPEX, % of revenue | 3.8% | 0.4% | 0.7% | 0.8% | 2.6% | 1.8% |
| ROIC | -11.2% | -5.3% | -6.6% | -5.8% | -7.3% | -1.5% |
| ROE | -13.9% | -1.2% | 1.1% | -2.6% | -5.8% | -3.2% |
Revenue and profitability
The company's Revenue surged on 18.0% in 2015. Revenue decline was accompanies by EBITDA margin decline. EBITDA Margin decreased on 5.5 pp from -8.7% to -14.2% in 2015.
Gross Margin decreased slightly on 1.9 pp from 34.6% to 32.7% in 2015. SG&A as a % of Revenue decreased slightly on 1.7 pp from 18.4% to 16.8% in 2015.
Net Income marign decreased on 4.1 pp from -5.0% to -9.1% in 2015.
Capital expenditures (CAPEX) and working capital investments
In 2015 Solomon Systech International Ltd had CAPEX/Revenue of 2.6%. Solomon Systech International Ltd's CAPEX/Revenue increased on 2.3 pp from 0.35% in 2012 to 2.6% in 2015. Average CAPEX/Revenue for the last three years was 1.4%.
Return on investment
The company operates at negative ROIC (-7.33%) and ROE (-5.75%). ROIC decreased slightly on 1.5 pp from -5.8% to -7.3% in 2015. ROE decreased on 3.2 pp from -2.6% to -5.8% in 2015.
Leverage (Debt)
Debt level is 82.7x Net Debt / EBITDA and Debt / EBITDA. Net Debt / EBITDA didn't change in 2015. Debt dropped on 28.4% in 2015 while cash increased on 4.3% in 2015.
Appendix 1: Peers in Semiconductors
Below we provide Solomon Systech International Ltd benchmarking against other companies in Semiconductors industry for the last 5 years. We show data for the top-5 companies by key financial metric together with the median value for all the companies in the industry.
Top companies by Revenue growth, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Phoenitron Holdings Ltd ($8066) | | -7.2% | 4.0% | 243.8% | 405.3% |
| Jun Yang Solar Power Investments Ltd ($397) | | -81.0% | 256.8% | 1.1% | 168.9% |
| Shanghai Fudan Microelectronics Group Co Ltd ($1385) | | 15.5% | 16.0% | 3.3% | 23.2% |
| Shunfeng International Clean Energy Ltd ($1165) | | -46.3% | 44.4% | 275.6% | 22.4% |
| Semiconductor Manufacturing International Corp ($981) | | 29.0% | 21.6% | -4.8% | 13.5% |
| |
|---|
| Median (17 companies) | -6.7% | -14.0% | 3.8% | 11.7% | -0.9% |
|---|
| Solomon Systech International Ltd ($2878) | | 26.2% | -15.3% | 8.9% | 18.0% |
Top companies by Gross margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Heng Xin China Holdings Ltd ($8046) | 46.3% | 42.1% | 57.6% | 75.0% | 35.1% |
| China Jinhai International Group Ltd ($139) | -92.8% | | -7.8% | 73.3% | -69.1% |
| PacMOS Technologies Holdings Ltd ($1010) | 68.1% | 68.8% | 65.7% | 65.7% | 57.5% |
| Intel Corp ($4335) | 62.5% | 62.1% | 59.8% | 63.7% | 62.6% |
| Hanergy Thin Film Power Group Ltd ($566) | 62.8% | 71.4% | 80.3% | 57.3% | |
| |
|---|
| Median (22 companies) | 18.0% | 22.1% | 23.7% | 29.5% | 31.0% |
|---|
| Solomon Systech International Ltd ($2878) | 30.5% | 38.6% | 38.1% | 34.6% | 32.7% |
Top companies by EBITDA margin, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| China Ruifeng Renewable Energy Ltd ($527) | 13.4% | 9.1% | 37.2% | 88.0% | |
| Hanergy Thin Film Power Group Ltd ($566) | 46.0% | 66.0% | 73.9% | 43.7% | |
| Intel Corp ($4335) | 43.6% | 41.5% | 38.6% | 42.8% | 41.0% |
| Shunfeng International Clean Energy Ltd ($1165) | 5.9% | -11.8% | 9.5% | 40.5% | 26.3% |
| Semiconductor Manufacturing International Corp ($981) | 26.9% | 34.3% | 35.5% | 34.5% | 33.3% |
| |
|---|
| Median (22 companies) | 12.5% | 9.3% | 9.5% | 7.1% | 10.3% |
|---|
| Solomon Systech International Ltd ($2878) | -21.9% | -6.6% | -11.6% | -9.9% | -10.5% |
Top companies by CAPEX/Revenue, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Jun Yang Solar Power Investments Ltd ($397) | 390.5% | 671.1% | 25.9% | 78.9% | 104.2% |
| Han Tang International Holdings Ltd ($1187) | 1.8% | | | 55.2% | 0.3% |
| Semiconductor Manufacturing International Corp ($981) | 70.6% | 23.5% | 35.1% | 33.2% | 55.0% |
| Comtec Solar Systems Group Ltd ($712) | 22.2% | | 30.2% | 18.7% | |
| Intel Corp ($4335) | 19.9% | 20.7% | 20.3% | 18.1% | 13.2% |
| |
|---|
| Median (22 companies) | 10.6% | 4.7% | 5.5% | 7.0% | 6.3% |
|---|
| Solomon Systech International Ltd ($2878) | 3.8% | 0.4% | 0.7% | 0.8% | 2.6% |
Top companies by ROIC, %
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| ASM Pacific Technology Ltd ($522) | 52.1% | 12.3% | 9.2% | 21.9% | 13.7% |
| Shanghai Fudan Microelectronics Group Co Ltd ($1385) | 22.2% | 25.5% | 22.7% | 21.1% | 20.9% |
| Intel Corp ($4335) | 32.4% | 23.7% | 17.1% | 20.6% | 17.7% |
| Hanergy Thin Film Power Group Ltd ($566) | 9.3% | 14.1% | 15.1% | 19.3% | |
| Shunfeng International Clean Energy Ltd ($1165) | 5.9% | -13.0% | 1.5% | 17.4% | 5.0% |
| |
|---|
| Median (22 companies) | 2.7% | -0.8% | 0.6% | 3.1% | 0.9% |
|---|
| Solomon Systech International Ltd ($2878) | -11.2% | -5.3% | -6.6% | -5.8% | -7.3% |
Top companies by Net Debt / EBITDA
| Top 5 | FY2011 | FY2012 | FY2013 | FY2014 | FY2015 |
|---|
| Solargiga Energy Holdings Ltd ($757) | 5.9x | | 13.8x | 4.4x | 9.0x |
| Shunfeng International Clean Energy Ltd ($1165) | 8.2x | | 25.8x | 3.4x | 5.7x |
| Semiconductor Manufacturing International Corp ($981) | 1.9x | 1.3x | 1.0x | 1.0x | 0.5x |
| Intel Corp ($4335) | 0.1x | 0.2x | 0.4x | 0.5x | 0.3x |
| ASM Pacific Technology Ltd ($522) | -0.4x | -0.5x | -0.8x | -0.1x | 0.2x |
| |
|---|
| Median (10 companies) | -0.0x | 0.2x | 0.4x | 0.2x | 0.1x |
|---|
