Robert: Yes, the HK market is very sensitive to US market
fluctuations, as you know, especially given that their HK$
is pegged to the US$ and, therefore, at the mercy of our
fluctuating interest rates, etc. I still remain quite bullish
on Playmates Toys. The price recently rose from HK$1.90 to
HK $2.85 in a matter of days. This is a re-tracement
of some 50%, something one might expect in the way of a
normal correction. Also noteworthy is that when price
moves down, it does on diminished volume. Should price
fall below HK$2.00, a splendid buying opportunity
might arise. After all, Playmates is already at
decidedly low levels for a now profitable toy company.
That being said, I am betting that Playmates will surprise
the market with final half 1996 results, usually reported
come March. Apparently, their "Star Trek" line is doing very
well on the heels of the blockbuster movie; the "Primal Rage"
toys is still quite strong and selling well. With the exception
of "Flash Gordon", other lines are holding their own.
Game video sales are good. At Toy Fair in February,
Playmates will unveil their toy line based on the hit
PBS children's show "Comfy Couch" supposedly more popular
than Sesame Street in the Canadian TV market. As noted
new "Space Jam" toys will also be unveiled among others,
doubtlessly. The wild card, of course, is the Lucas license
for the new Star Wars trilogy. Currently, this toy
license is yet open, and Playmates is aggressively bidding for it.
Should it win that most coveted of licenses, the aftermath
would, indeed, be breathtaking. |
