David,
I've been following VTech's news and stock price. It has moved from $HK 28.00 range to current level around 31.00 over the last month or so. One of the few gainers on the Hang Seng.
I was surprised by today's action since we have some positive events taking place that improve Deswell's opportunities and competitiveness.
The yen is trading much higher to the $US, at 119+ as I write this. THis means the $HK and the Rmb (yuan) have also fallen due to the peg. It somewhat removes any advantage the devalued yen may have given to Japanese competitors. When one adds the tax and incentive revisions China has given to exporters versus the high taxes in Japan, it would appear that the advantage now lies with China companies.
China has also revised rules on foreign companies operating in China selling within the mainland. In the past, these companies have had restraints on mainland sales and these have been relaxed. I will have to look at it further to see if Deswell can benefit, but it does look like an improved situation for VTech and Mita.
It's getting interesting. Japan has intended to export their way out of debt but the stronger yen will hurt them, Japan's banks are in serious trouble, Japanese and Asian companies are going bankrupt putting further pressures on the banks, tighter money availability puts more pressure on Asian companies with debt, causing additional bankruptcies, etc. A downward cycle with no bottom in sight.
Who wins? Debt free companies with ample cash that play it close to the vest and wait for the opportunities. As it all falls apart, they will be the survivors with new customers and the ability to grow.
JMHO,
Ron
|
