Deswell Industries (DSWL) Message Board

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Technology Stocks : Deswell Industries (DSWL)

DSWL 3.440

+5.2%

Oct 31 9:30 AM EST

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To: Shane M who wrote (1413)	12/19/2005 8:26:02 AM
From: Rock	Read Replies (1) of 1418

I'm with Shane on this one. The bad manager issue feels weird to me but with Deswell's strong record of open and honest management, I can be patient with a single incident. I think the big business issue is that the plastics division expanded at a time when oil prices (i.e. resin prices) went through the roof. Obviously, competition was too tough for them to pass on the costs and so they were forced to choose between bad deals or no deals. Wisely, they chose the latter but it's no guarantee that things will get better. China is brutal place if you're product isn't something that the rank and file co's cannot follow, technically. Personally, I think that Deswell's mistake was not so much the expansion but the failure to hedge their exposure to crude. They've been fortunate that Kwanasia has had a strong run to partially offset the Jetcrown difficulties.

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