In the "better late than never" category, here are my notes from the Deswell annual meeting in NYC last September, which I posted elsewhere but not on SI at the time. I thought they might be of interest to some, even though some of the discussion at the meeting (Nam Tai, warrants) turned out different.
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Subject: Re: Annual meeting
Date: 9/30/97 10:38 PM Eastern Standard Time
Some random notes from the DSWLF annual meeting:
Representing Deswell were Mr. Lau, Mr. Seung and Mr. Lam. There were a couple of PR guys there too, and a grand total of 4 shareholders. Actually, 5 shareholders, since Mr. Koo of Nam Tai was there too. Brief presentation by management, nothing new. Here are some notes from the Q&A session:
Currency fluctuations in Asia have not affected, and likely will not affect Deswell, as they are paid in HK$ and US$. China and HK have a massive amount of US$ to defend the HK$, so they do not believe there will be any problems.
Kwanasia (electronics) is expected to grow faster than Jetcrown (plastic injection molding). More factory space is expected to be needed in 1999, especially for Kwanasia. (There was a comment about seeking approval for a 250,000sf facility for Kwanasia in Dongguan, but I'm not sure if it's been approved by the government yet.)
New customers include Harmon International (audio equipment) and V-Tech (cordless phones). Relations are strong with existing customers. (as evidenced by the presence of Mr. Koo from Nam Tai) Customers care more about quality and dependability than just low cost, so no pressure on Deswell margins. Deswell tries to help redesign components to lower production costs, and passes on some of the savings to the customers.
Deswell will be developing a web page, as part of their marketing efforts.
Behringer has set up a joint venture to sell audio equipment in China. Their sales are expected to double by 1999, resulting in increased business for Deswell.
No plans to redeem warrants at the moment.
On a side note, refreshments were inferior to the Nam Tai annual meeting. All they had was coffee and water. Not even a soda or a bowl of pretzels. As a shareholder, I am glad they watch their expenses, but next year I'm going to bring my own refreshments. :-)
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