I do think this news is significant for NMO as well.
Having said that, I am concerned there may be some things here "between-the-lines", so let me play the "devil's advocate for a second".
Pure "speculation" on my part suggests:
(a) Pabst Brewing Company, USA, does not think they can directly collect royalties from their Chinese beer brewing plants due to the current political situation.
(b) Having a Canadian company (NMO) collect the Royalities for them is a superior political move, that might be acceptable to China. I think the Chinese partners in most of the Chinese breweries are government.
(c) Even NMO has difficulty in collecting revenue from two of the three breweries that it has part ownership of.
(d) NMO gets exclusive brewing & distribution rights from Pabst Brewing Company, but the past has shown it is not always easy to collect on money made in China. I don't think it is any means certain that Chinese breweries will "honor" the exclusive rights that NMO has.
So I think it is good news, but it is not the same as getting such an exclusive contract in North America.
I think the closer China comes to entering the World Trade organization (do I have the name right??), the better it is for NMO. The current step back, with the mistaken, and stupid, NATO bombing of the Chinese embassy, has not helped companies like NMO.
Don't get me wrong on the above. I am bullish on NMO, I own shares in NMO, but I don't think all is rosy yet. I'm still pondering if I should load up on more shares, or wait for further down in a market correction where all shares fall. |
