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  • john429a john429a Feb 13, 2012 1:09 PM Flag


    The biggest negative is probably that things seem to have been pushed back a couple of months..... Not the end of the world as nothing has fundamentally changed..... And that the wage inflation that everybody has been talking about actually has a # in this report.....

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    • I think it's a big overreaction considering how undervalued the stock is. Way below book value on a stock that's not losing money, doesn't have debt, has strong growth prospects this year, and has a strong dividend.

      I think that the biggest problem with this earnings release was not so much what they said as how they said it. They are planning to nearly double revenues this year, and yet there was no sense of optimism in the text. It could have been written a lot better.

      Currency, labor cost, the property issues, the fact that customers could cancel at any time, the fact that order quantities are unknown, all those are boilerplate as astral tsar said. I don't think they should have even mentioned some of those things unless there was new reason to.

      The things that aren't just boilerplate are that there was a strike this quarter that required severance pay to get rid of workers -- unfortunate, but presumably it won't be a recurring event. Also, most importantly, as John said the Wuxi expansion project has been pushed back from beginning of January to sometime in March. That's too bad, but it's still going forward, and the Shenzhen project is also still supposed to begin in July. They didn't say whether they have a contract yet for Shenzhen.

      I wish they would learn to express mildly bad news a bit better so that it doesn't sound like the end of the world.

      • 2 Replies to jaretwilson
      • They always sound negative in their press releases. And they always stress the risks out there. Yes, they aren't the best marketing company out there in terms of selling themselves to investors, but at the same time, the reason they seem so negative is because they are ultra conservative. A reason to why they rairly lose money. During the financial crisis 3 years ago, they were around the break even mark when most other companies started to bleed red ink.

        23% wage incrrease is what everybody else is dealing with in China. Not just nam Tai. At the end of the day, cost of products will go up as their really isn't any other place to be making this sort of products. You also have to consider that the quality of chinese manufacturing is improving, as well as productivity. Worrying about someones salary going up from $1 an hour to $1.23 per hour (just a guess... probably much worse than that) really isn't a major issue.... their quality and productivity is more important. Just look at their customers.... primairly japanese companies.... they have very high standards to who they outsource.... that should tell you something...

      • I agree there are strong growth prospects but I think you guys have a too broad description of the meaning of boilerplate. Wages up 23%, effect of recent appreciation of the Renminbi, land that was paid for 5 years ago and still can't be used - does not meet the definition of boilerplate (inconsequential, formulaic or stereotypical language) in my mind.