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

To: peter michaelson who wrote (860)	8/2/1998 10:13:00 AM
From: Ron Bower	Respond to of 1418

peter, Welcome. Familiar with your posts on Value Investing and I'm not surprised to see you interested in Deswell. Your posts there reflect the investment style of many on this thread. I suggest you contact IR for Investor packet. It will answer most of your questions about products and the operation in more detail than the thread has gone into. As near as I can determine, the high margins may have little to do with 'competitive barriers'. I'm not absolutely sure that there are any non-competition arrangements in China. This was posted on another thread (approval from the government to make a new product for Mita) and I've been unable to verify. I, we, have made the mistake of assuming it was true without researching more fully. So far, I have found no truth to it, but that doesn't mean it isn't. IMO - Deswell's high margins are a result of an advantage in labor costs (that is now less), of highly efficient technology equipment, to a centralized operation, to low taxes, and to a talented and experienced management team that are also the majority stockholders. Salaries for management are low (by US standards) and it contributes to the bottom line. Management's primary source of income is the untaxed dividends. Please continue to ask questions as the threads gotten a little complacent in recent months. FWIW, Ron