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

To: Ron Bower who wrote (853)	7/31/1998 12:20:00 AM
From: j rector	Read Replies (2) \| Respond to of 1418

>>A devaluation of the Chinese yuan would lower their costs and devaluation of the $HK would effect cash assets. Ron, are you sure DSWLF keeps cash in HK$? I would have thought it would be in US$.

To: Ron Bower who wrote (853)	7/31/1998 10:18:00 AM
From: jmt	Respond to of 1418

Ron: >>>According to the Annual Report the primary currency is $HK. A devaluation of the Chinese yuan would lower their costs and devaluation of the $HK would effect cash assets.>>> I may need to go back to the books for this one. Functional currency for affiliate home country operations, Reporting currency for financials driven by main source of revenue and expense. But this does not mean revenues are in $HK. And the functional currency could be yuan, translated for the annual report into the reporting currency. I will be happy to try to get aa answer on this. I do not know if NY IR is close enough to operations for an answer. Any thoughts on who to contact. In reading ahead the person asks if assets are in US dollars. Great question. If I were Deswell and even suspected a currency issues, as close to 50% of the assets are cash, plant them in the US if there are no currency restrictions. Also what % of the receivables are in US dollars. A devaluation may not hurt if these conditions exist. Using the cash for dividends or share repurchase also would not be a bad idea. jmt