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  • xkmfx xkmfx Jul 8, 2010 7:48 PM Flag

    Here it is.

    OK I will bite on this open invitation to respond....

    Firstly, let me copy my original post and CLARIFY FURTHER (Start of Expansion of points in CAPITALS):

    Hard to make case to invest based on asset value ie cash and land, when underlying business is evaporating. I CONTINUE TO FIRMLY BELIEVE THIS! Anyway, liquidation academic as I doubt Koo would ever allow this. However, it does go to motivation of a buyer more than liquidation. However, I also believe that Koo would try to block any purchase attempt anyway with his substantial wealth through lawsuits etc. By the way, if Koo disappeared and good new mgmt I would look to invest here again.

    Firstly, land is not owned in China only leased. Also, doubt any takers to buy.

    CLEARLY MY ORIGINAL STATEMENT IMPLIES EVEN THOUGH LEASED THAT THE LEASES ARE TRADE ABLE. So I don't disagree here with the post from Taiwan. Leases in China are 50 years and Nam Tai's leases probably have around 30 years left so they are trade able.
    HOWEVER, I ALSO STATE UNLIKELY ANY TAKERS. What do I mean here:
    Manufacturers, given labor dispute (refer to the biggest EMS FOXCONN suicides and labor issues as examples) and rate escalation, are moving into more rural China and out altogether (FOXCONN moving work load into TAIWAN and VIETNAM as examples). So I do not think any commercial takers!
    Can it be converted to residential...maybe with a lot of work but even here value and demand is greatly reduced.

    Second, most of cash is trapped in China.

    WHAT DO I MEAN BY TRAPPED. Say Nam Tai elected to distribute cash to shareholders. As it leaves China there would be a 20% penalty imposed assuming all paperwork handled properly...this is not a given. Also Nam Tai has enjoyed a very low tax rate on profit by reinvesting in China...this element is totally trapped ie cannot come out but must be used in CHINA (I don't know how much of the $200M this represents but probably a significant amount)

    So if uninspired incompetent management cannot figure out a business strategy in China little value here!

    SO LEASES AND CASH ARE OF COURSE USABLE IN CHINA IF the MGMT CAN FIGURE OUT WHAT FOR...I HAVE NO FAITH HERE!!!!! I do agree that one of the best uses of cash was the buy back of Hong Kong sub. However, this certainly used up all none China cash so what is remaining I believe has the restrictions stated above. And yes the Yaun is a golden currency if one has uses for it in China.

    Also, by uninspired, I mean that Nam Tai has had significant cash for a long time and outside of Hong Kong listing buy back have not figured out a way to use it effectively to generate EBIDTA. And NO NO NO...integrating into flexible printed circuit production is not what I would call smart. The Wuxi facility I understand is empty of workload after significant investment.

    HOPE THIS IS NOT TO COMPLEX FOR YOU ALL TO UNDERSTAND. I have tried to keep it simple. Anyway, I tier of posting on this board and this is absolutely last one!

    However, will peak in periodically to see what you all are saying. If I see signs of a turnaround I will through some money back in....

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