Paul, David, & all contributors to thread,
Paul, With the exception of the British Pound, the $HK has been the most stable currency to the $US. While others have had major drops, including the European currencies, the $HK has barely moved. Even others considered stable, like the $Taiwan, have lost. I'm not sure that the high value of the $HK isn't actually detrimental to Deswell. This morning I read that the $PRC Yuan is likely to be devalued. This could have a major positive effect on Deswell, particularly with them getting into labor intensive assembly.
Couldn't agree more with your comments on customers selling in their own currency and impact of $HK, raw material costs, etc.
David, Agree about Asian markets and stock weakness. The Hang Seng seems to be firming with the only weakness being real estate and banks. We sure do come to different conclusions on next Q. You predict flat revs and margins while I've concluded an increase in revs with lower margins. I believe the higher revs and lower margins would come from the new assembly work. My current thoughts are $3.5M (.65EPS) on $22M. If there's a devaluation of the Yuan, Deswell made entry into assembly at a very good time.
Some of Wednesday's trading was mine. The weakness in warrants to the common prompted me to trade positions, sell-300>17.25/buy-1000<4.50. Gives me 67% more rights with +/- same monies invested. Felt it to be a good market play to rising prices and don't mind an <$18.00 position if they get called.
I really feel fortunate to be on a list with so many knowledgable people. Each post makes one sit back and think. While there's no hype, it bothers me that no one is finding negatives. With the market action, it keeps me wondering why Deswell is selling, IMO, so far below value? I know that's it's an uninformed market reaction to the Asian situation, but there should be more buyers seeing the value.
Hope everyone had a Good Thanksgiving,
Ron
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