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

Solomon Systech (International) Ltd.

(HKEX:2878)

Select Model

Rating:51Neutral

Price Target:HKD 0.21▲(0.49% Upside)

Action:reiterated

Date:10/06/26

The score is held back primarily by weakening operating performance and sharply deteriorating cash generation (including slightly negative free cash flow). Technicals also remain bearish with the stock below key moving averages and negative momentum. The main offsetting positive is a notably strong, low-leverage balance sheet, but valuation remains hard to assess given the negative P/E and no dividend yield data.

Positive Factors

Low financial leverageVery low leverage gives Solomon Systech substantial solvency protection and financial flexibility. The company is less exposed to interest burdens and refinancing pressure, preserving capacity to fund product development, withstand cyclical weakness, and pursue opportunities without relying heavily on additional debt.

Negative Factors

Revenue contraction and operating lossTwo consecutive years of revenue decline, combined with a shift to operating losses, indicate weakening demand or execution across the current business base. If sustained, lower scale can reduce operating leverage, pressure profitability, and make recovery dependent on renewed product or customer growth.

Solomon Systech (International) Ltd. (2878) vs. iShares MSCI Hong Kong ETF (EWH)

Market Cap: HKD 514.54M
Dividend Yield: ―
Average Volume (3M): 1.05M
Price to Earnings (P/E): -16.4
Beta (1Y): 0.99
Revenue Growth: -6.32%
EPS Growth: -159.42%
Country: Hong Kong
Employees: 279
Sector: Technology
Sector Strength: 61
Industry: Semiconductors

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

Company Description

Solomon Systech (International) Limited functions as an investment holding entity and a fabless semiconductor enterprise. The company's core activities revolve around the engineering, development, and distribution of integrated circuits (ICs) and sys...

How the Company Makes Money

Solomon Systech primarily makes money by selling display-related semiconductor IC products it designs (as a fabless company, it typically outsources wafer fabrication and packaging/testing to third-party foundries and OSAT providers). Revenue is gene...

Solomon Systech (International) Ltd. Financial Statement Overview

Summary

Overall fundamentals are mixed: the balance sheet is strong (very low leverage and high flexibility), but profitability has weakened with revenue declines and a swing to operating losses in 2025. Cash flow is a key concern as operating cash flow fell sharply and free cash flow turned slightly negative despite positive net income, increasing earnings-quality risk.

Income Statement

56Neutral

Balance Sheet

82Very Positive

Cash Flow

41Neutral

Financial statement breakdown
Breakdown	TTM	Dec 2025	Dec 2024	Dec 2023	Dec 2022	Dec 2021
Income Statement
Total Revenue	90.94M	93.26M	113.44M	153.15M	190.84M	168.12M
Gross Profit	25.47M	32.65M	38.05M	46.34M	65.47M	67.25M
EBITDA	-6.20M	525.00K	7.63M	22.34M	29.08M	25.50M
Net Income	-3.92M	4.03M	10.13M	19.44M	27.83M	23.78M
Balance Sheet
Total Assets	164.06M	164.70M	163.71M	157.43M	158.26M	139.91M
Cash, Cash Equivalents and Short-Term Investments	110.47M	106.90M	104.24M	82.86M	45.56M	24.76M
Total Debt	1.79M	2.43M	3.31M	3.16M	3.42M	2.71M
Total Liabilities	24.85M	22.84M	26.66M	30.50M	49.08M	53.21M
Stockholders Equity	139.20M	141.86M	137.04M	127.00M	109.25M	86.76M
Cash Flow
Free Cash Flow	-3.91M	-112.17K	17.79M	36.72M	15.05M	-7.52M
Operating Cash Flow	-3.27M	2.25M	20.04M	37.81M	17.59M	-5.98M
Investing Cash Flow	-573.29K	-2.32M	4.44M	-865.00K	-2.17M	-1.25M
Financing Cash Flow	-2.69M	-1.40M	-265.00K	-1.11M	7.80M	-20.18M

Solomon Systech (International) Ltd. Technical Analysis

Technical Analysis SentimentNegative

Last Price0.21

Price Trends

50DMA0.24Negative

100DMA0.27Negative

200DMA0.34Negative

Market Momentum

MACD-0.01Positive

RSI34.00Neutral

STOCH17.10Positive

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 0.21 is below the 20-day moving average (MA) of 0.22, below the 50-day MA of 0.24, and below the 200-day MA of 0.34, indicating a bearish trend. The MACD of -0.01 indicates Positive momentum. The RSI at 34.00 is Neutral, neither overbought nor oversold. The STOCH value of 17.10 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

Overall Rating

UnderperformOutperform

Sector (61)

Financial Indicators

HK:2878 against its peers
Name	Overall Rating	Market Cap	P/E Ratio	ROE	Dividend Yield	Revenue Growth	EPS Growth
HK:3986	75Outperform	HKD 214.10B	15.99	29.28%	0.27%	181.29%	771.19%
HK:6809	68Neutral	HKD 211.26B	55.28	19.49%	0.32%	40.03%	―
HK:0501	65Neutral	HKD 120.55B	32.33	9.88%	0.16%	7.37%	―
Sector *	61Neutral	$37.18B	12.37	-10.20%	1.83%	8.50%	-7.62%
HK:1385	58Neutral	HKD 35.24B	39.11	14.45%	0.31%	21.04%	115.77%
HK:2878	51Neutral	HKD 514.54M	-16.41	-2.79%	―	-6.32%	-159.42%

* Technology Sector Average

Performance Comparison

HK:2878 and its peers over the selected period
Ticker	Company Name	Price	Change	% Change
HK:2878	Solomon Systech (International) Ltd.	0.21	-0.28	-57.96%
HK:1385	Shanghai Fudan Microelectronics Group Co Class H	21.62	-20.56	-48.74%
HK:0501	Omnivision Integrated Circuits Group, Inc. Class H	73.45	-48.19	-39.62%
HK:3986	Giga Device Semiconductor Inc. Class H	315.00	92.62	41.65%
HK:6809	Montage Technology Co., Ltd. Class H	207.60	32.94	18.86%
HK:3277	Gpixel Changchun Microelectronics Inc Class H	43.22	-26.56	-38.07%

Solomon Systech (International) Ltd. Corporate Events

Solomon Systech Renews Connected Distribution Deal with CEACI

Oct 28, 2026

Solomon Systech (International) Ltd. has renewed its existing sales and distribution arrangements with connected party CEACI by signing a new 2027 Products Sales and Distribution Agreement, effective from 1 January 2027 to 31 December 2029, under whi...

Solomon Systech Renews Connected EDA Tool Licences With CEC Subsidiary

Oct 22, 2026

Solomon Systech has renewed licenses for electronic design automation tools with HES, a subsidiary of substantial shareholder China Electronics Corporation, for its SSL-China and SSL-SZ units. The three-year agreements, running from 30 October 2026 t...

Solomon Systech Slides into Loss as Margins Tighten in First Half 2026

Aug 21, 2026

Solomon Systech reported interim revenue of US$43.7 million for the six months ended 30 June 2026, a 4.8% decline from the prior year as gross profit fell to US$12.0 million and margin compressed to 27.4%. The group swung to a loss attributable to sh...

Solomon Systech Sets Board Meeting to Review Interim Results and Dividend

Aug 3, 2026

Solomon Systech (International) Ltd. has scheduled a board meeting for 21 August 2026 to review and approve the unaudited consolidated interim results for the six months ended 30 June 2026. The board will also consider the potential declaration of an...

Glossary

BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Oct 06, 2026

Solomon Systech (International) Ltd. AI Stock Analysis