So ... Am I too late to the party?
After reading some stuff, I wonder if I could get your input on a few questions I have. This company has some hot technology and items to offer, one being the "efficiency" their products provide. I'm sure glad someone mentioned them to me :o)
1. The last 10Q mentions two customers that comprise a significant portion of POWI's business. Do we know who they are, either I missed it or they are known as Company A and Company B? I suspect they may be Taiwanese, since the 10Q also shows that same quarter sales for Taiwan jumped from 16% to 26% of total foreign sales.
2. Products - Should POWI sell plenty of the TOP200 switchers instead of the TOP100, since they can operate from 85V to 265V (hence globally), or do you expect sales of TOP100 to occur in the USA, since the range in voltage is not required? How much do the TOP100 and TOP20 sell for?
3. Matsushita and Oki manufacture for POWI. I read that the OKI deal is just about up, and they are re-negeotiating the contract. Would you expect that they will be able to secure a better price, now that the industry is in a slump? If so, wouldn't it make sense to secure a long-term contract, if prices are low?
4. Drivers - Market drivers appear to be mobility, efficiency, and reduction in manufacturing costs for users of POWI products. Government drivers appear to be energy conservation, namely Energy Star and Blue Angel? What exactly is Blue Angel, have you heard of it before, it is new to me?
5. Demand - USB is going to be big, I know another company that stands to perform well based on this, I think you do too. USB in monitors, printers, multi-function products make me think that USB could become a primary portion of POWI's business in the future.
Cellular phones are due to explode, once the larger and more reliable digital network is fully in place. In the 10Q, I noted a statement that POWI received "strong initial orders from two new customers with major programs". Any idea if this is cell phone related, set-top box, or ... ?
PC and TV standy-by power also looks promising, is this related to Blue Angel?
6. Trends - "95% of PC's in 1998 will have USB" - Dataquest
7. Money - In Dec. 97 POWI had $25,553M cash and $3,455M in short-term investments. In Mar 98, POWI had $5,569M cash and $23,416 in short term investments. What's going on there, becasue that is a lot of money they moved around. I would suspect they would not invest that much in short-term, unless they are very confident of the move. To me it looks encouraging, at least on the surface.
8. Tax Rate - 25%. Is this expected to change, or can we play with this rate for a while, since they are an IPO, or for any other matter?
9 Gross margins - I like the 44.7% gross profit margin. I also like that R&D spending was up 45%, especially the part that said most was attributable to hiring engineers. I like that, because it can contribute to long-term investment security.
10. How much does the $/yen exchange rate affect POWI? I read about that in the 10Q, is it a serious factor, medium factor, or is it minor? Would it affect gross margins by more than 10%, if there was a huge shift in the exchange rate, I don't understand this very well.
11. This looks like a perfect buyout candidate, is that a possibility in the future? If so, how would you expect it to affect the share price?
Thank you! What can I say, I was surfing the web last night, and I got a little curious :o)
Regards, JB
P.S. I'm in as of 06/24/98. |
