Please read the detail on ZOMX below because in my view it directly relates to the QFAB opportunity. My point is made at the end.
I have experience with another small cap company called Zomax, which has a sterling balance but is faced with shrinking revenues and a tough environment overall. They are in the business of manufacturing/service outsourcing.
In short, they did a good job downsizing the business in response to the tough environment. They kept cash flow about break even and managed to protect the substantial cash reserve on the balance sheet, even though revenues dropped at a fast pace (40-50%)over a two-year period.
The investment proposition for ZOMX was very similar to QFAB - strong balance sheet, declining revenues, tough industry and macroeconomic factors. However, with proper management, one could say the future would likely be brigher some day. I thought they could to ride out the storm with the strong balance sheet, and my plan was hold onto the investment for the long-term. This type of investment obviously has high risk overall, but a great expected return - very similar to QFAB.
When you consider the price, you don't need a lot of upside. I this stock had the price of Google, I'd expect a ton of upsdide.
Their situation is tough, but who know's - maybe the Chinese JV will produce some income. Cheap furniture is the hot part of the market now. They may be able to find some good niche markets as they said.
I don't think it will ever be a growth story, but all they need is a slim profit for the stock price to recover nicely.