(14-05-2013, 01:25 PM)felixleong Wrote: any of you guys looking at karin too?
Looks good at current price, PE 7 with a juicy yield of 7%, plus its net cash position
14-05-2013, 01:44 PM (This post was last modified: 14-05-2013, 01:46 PM by felixleong.)
ohh paisei I didn't mention about cash flow
I think the earlier posts on page 1 got mention about it.
Overall I think their cashflow is stable and dividend payouts should be sustainable.
The net margin is one that might worry investors,from the past till now they make much higher margins doing component distributions.
However in recent years they have been aggressively trying to grow revenues by doing consumer product distribution and most of the revenues from this segment actually comes from distributing apple products.
One thing about apple is they tend to squeeze downstream very tight, giving distributors very low profit margins. I think net profit margins might come down to as low as 1% but nothing lower than that.. Karin will continue to distribute as long as its profitable, even for a small margin, but if it ever becomes not profitable they would definitely stop distribution of that product.
From Apple's point of view, they do not have much contacts in HK and China, so they really need local distributors to help push the volume out. I do hope this can be maintained as a long term relationship as Karin has really been doing a great job as seen from the revenues.
sorry Apple fanboys... Just based on apple product distribution alone i wouldn't touch this company. Bad move from management especially now that apple is in decline. Apple is currently being owned by samsung and other tech company, without steve job's vision they will just survive until some stupid move from management cause them to lose their cash hoard and earnings..
If karin started distributing samsung products then may be reconsidered
14-05-2013, 02:34 PM (This post was last modified: 14-05-2013, 02:44 PM by felixleong.)
Apple has been losing market share in terms of %
but if you look at total number of ipad & iphone sales, the number has been increasing.
I have attached 2 charts for your easy reference
In china less than 10% of their people use smart phone or tablets, as they become richer more will want to own smart phones or tablets and not all of them will be using samsung.
There's still so much growth in this area selling to these billions of chinese and samsung wouldn't be the only one making profits, a few companies will become very rich from it.
Karin not only distributes apple, if you got time can take a look at
i am invested in this but small position watching it and learning about it.
in my opinion this is like Willas-array + epicenter
for the components distribution they can be in the funk. you are essentially buying Karin's operation, risk management capabilities to manuveur a thin margin industry better than any one else. Willas array pays a consistent dividend as well.
it is not a business that many fundamental investors will look at because of the low margin but what if they gain so much expertise in risk management and operations that no matter how technology changes they are able to distribute? that is their model.
instead of distributing steel like aEH, lee metal, they distribute these components.
as for consumer distributors, in asia, Apple will have a place especiallly in a shopping capital like hong kong. nevertheless, lets not just based on feelings, lets see quantifiable figures first. that should be how investing be most of the time.
the free cash flow will suffer due to working capitals. thus you will see a period where free cash flow is negative. they have improved more due to the move towards distributing consumer product.
still if we look at 2 years horizon, their free cash flow should be ok. in fact testament was in 2009 where they navigate that market conditions pretty well.
(14-05-2013, 04:37 PM)Drizzt Wrote: if you guys are looknig for 6% perhaps can consider that monster with a complicated balance sheet that is known as cm pacific haha.
what happened today? some sort of stock split or exercise of warrants
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