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Technology Stocks : Deswell Industries (DSWL) -- Ignore unavailable to you. Want to Upgrade?

To: Count de Monie who wrote (677)	4/21/1998 2:14:00 PM
From: Ron Bower	Read Replies (2) \| Respond to of 1418

Count, Wrong on many things. Deswell is a holding company with interests in three companies: Jetcrown (100%) is a plastics company, Kwanasia (51%) circuit board production, and Kwanta (64.9% owned by Kwanasia) metal stamping. Each company operates independently under the guidance of Deswell. The biggest development this past year has been Kwanasia starting to do assembly work. Before, each company was selling individual components to the same customers for assembly elsewhere. This made for a lot of extra shipping. By doing the assembly, the shipping is kept to a minimum except for the small components on the boards. This should be the big growth area in coming years. Jetcrown has customers that it supplies plastic items to (Mita, Shakespeare, Behringer, others), but an increasing portion of their business is to Kwanasia. Kwanta sells some to outside customers, but a major portion of its business is to Kwanasia. They do not sell to the computer market and are not subject to semi flucuations. They have been producing telephones, answering machines, reel cases for Shakespeare, copy machine and printer parts for Mita, various audio equipment components for Behringer (Behringer owns a large amount of Deswell stock), and other items. Most recently, they have entered telecommunications equipment for InterTel and similar equipment for Harmon Industries. Another new account is telephone equipment for V-Tech. They have stated that they plant to concentrate on telecommunications equipment, looking at the future growth of telecom in Asia, South America, Africa, etc, and the new technologies in the US. Their growth is related to low costs from 'state of the art' equipment, low labor and other operating costs, favorable taxation, and other factors. They market to the US and Europe, sell in $US, and keep all cash in $US other than the amounts needed for current expenses. This is from memory but close to what they are doing. Ron