More on my conversation with Mr. Lau,
Thinking a little more clearly today. I'm rereading my post from yesterday and decided to make additional comments on it.
I sincerely hope that the calls to Mr. Lau are kept to a minimum so that he will remain accessible. I do think it would be good for someone on this thread to contact him about this time in the Q from here on, but not to bother him in between.
I have the impression that he has had little investor contact since he made the IPO tour in '95 and actually welcomed my call. One would think an analyst covering Deswell would be in regular contact, but apparently they haven't been. I suppose it's too much to ask of an analyst on salary to make phone calls at 2:00 AM.
Mr. Lau seemed to find the analyst lowering the rating unbelievable. It shocked him and prompted definite responses. I think it might have caused him to tell me more than he normally would because of it. The conversation took a definite turn after I told him about it.
Two things he said stood out - increased sales, machinery from Toshiba. Both were said quietly as part of his comments, neither seemed to be deliberate, almost as if he were thinking out loud. They were very loud to me, making it hard for me to listen for a moment.
The "big increase in sales" was made as part of his comments on current operations. I took it to mean this Q. With them adding equipment last Q and more this, it fairly obvious there's been an increase in orders.
"from Toshiba" was a part of him thinking about additions this Q. As I think about it now, it appears there was machinery available from Toshiba and they debated about 1) buying all of it and chosing to only buy some or 2) leased it rather than buying. It appeared the equipment was already in China and they have started using.
To me, this comment is major. It may mean Deswell can get contracts from Toshiba. It definitely means that they have contact. It also may mean (see an earlier post of mine) that Japanese and some other SE Asia companies are being forced to liquidate, with Deswell, Namtai, and other companies with strong cash in a good position to take advantage of their problems.
Most of our questions were answered directly or indirectly. I'm sorry I was unable to get comments on Namtai because I know many on the thread would have liked to know his thoughts. I just couldn't find a place to work it into the conversation. I almost tried toward the end, but had the strong impression that he wanted to end the call.
I personally feel we have found a good place to put our monies. Mr. Lau is not a politician and doesn't play games. I deal with upper management people on a regular basis and am not easily impressed, but my take on Mr. Lau is most favorable.
For what it's worth,
Ron |
