Baidu, Inc. Message Board

what do you want ? the stock has had a great Apple related run recently - long term shareholders more than doubled their money within a few months. But with Apple now losing the smartphone wars big time Nam Tai is the first to be eliminated from the supply chain. Given the tons of bad news from Apple and related suppliers it was quite clear that the outlook for Nam Tai would be very weak so this one was a great short going into earnings.

With the future focus of the company shifting to developing its campus property the risk profile has changed dramatically as no one knows how much money and time it will take to earn some returns and if this will ever happen. The dividend will be eliminated in 2014 to save moeny for the property development.

with rapidly reduced EMS operations and huge cash needs for campus development the company won't be able to produce positive earnings for some time going forward so there won't be any incentive for investors to own the stock.

yeah - it must have been exactly this "overly conservative nature of this company" which lead management to project quarterly revenues of around $900 mln for the second half of the year on the last conference call before the desaster started.

with regards to the new order taken directly from the press release:

"This new purchase order does not alter the customer's decision to eventually transfer its future orders to other suppliers with lower assembling charge. This order only offers temporary relief for the Company and does not guarantee that any new future order will be awarded. In addition, the customer may cancel any or all of this purchase order with payment of a cancellation fee to the Company."

despite the great market which makes shorts in any weak stock run for cover these days I still believe that this one should move much lower over time as there won't be any earnings for an elevated time frame. The upcoming elimination of the dividend for 2014 will be the inflection point for shorts here.

you just don't get it - their cash earnings are in RMB while they need US-Dollar to pay the dividend and the coupon.

looking at your logic the company shouldn't have needed the bond anyway so even for you things can't add up here.

it's much more disturbing that you are asking this question despite the CFO explained this matter in a detailed manner on the conference call - if you don't want to listen to the replay just read the transcript

some things still don't add up here - it doesn't make sense to pay a generous dividend to shareholders when at the same they need to borrow these dollars at a brutal interest rate. Also the company expects to shift to an aggressive growth mode so again payouts to shareholders aren't justified here. They were actually talking of spending the WHOLE cash balance and then some for acquiring land rights in China these year which clearly will worsen the risk profile considerably.

The bond requires more than $27 mln in annual interest payments - wonder how they will get the dollars required for payment AND dividends withouth further borrowing. Would sell the stock here.

actually I bit was just me buying 8k shares late in after hours so don't count on the after hours price.

while I am not really sure what will happen to the share price given the recent run in the stock and the below estimates guidance I think analysts will continue to support the company in their notes out early tomorrow - except for the guy from Morgan Stanley who clearly didn't buy management's comments and explanations but he already downgraded the stock following the weak Q4 report and guidance so there's not much danger from this side.
to be honest the conference call was nothing to write home about just like the Q1 report and especially Q2 guidance. The biggest positive takeaways were the comeback of the retail business and the ongoing strong international performance in EMEA as well as in Asia.

actually there were quite a lof of negatives on the call but nobody really seemed to care:

- stock based compensation to move up substantially to the 5% (!!!) of revenue number for the year - obviously key executives needed some incentive to stay given the decline in the stock price
- even more alarming they talked about equity compensation for executives who have recently LEFT the company - would have liked some analyst to step in and ask about this
- cash is down for the quarter
- stepping up investments
- making big adjustments to their business strategy as strong and more innovative competition from Facebook and Google continues to take its toll on the company's revenues
- reiterated view of no gross margin expansion and perhaps even contraction going forward
- outright denied a possible sale of the company

Bottom line:

While I don't like the company as the bigger players will dominate the market going froward leaving MM behind the stock clearly looks cheap here and at least full year guidance was maintained this time. Former areas of weakness are doing better now and strategy adjustments might help the company to capture more business going forward.

thanks for correction - will listen to the replay later as I am currently at the ARAY call

and one for the road - think a minute why Innolux is willing to sell off its complete 25% stake asap after holding on to the strategic investment for many years. While the price has tripled the business prospects of HIMX have certainly not. They know very well that the price might rather go back to $2 instead of tripling one more time.

once again declaring victory - another giant gain

even if Himax would be the sole provider for this micro display, the revenue opportunity looks really tiny here as this is a few dollar item.

at 13.25% yield I would be willing to take considerable fraud risk

I don't think the report and guidance will be enough to further propel the stock higher as these type of results and guidance the company consistently reported over the last few years. Would short the stock here.

I don't want to dial in by phone from Germany. There's is also a live webcast but I can't find the link