Adampak

[cookieguy]

yup come down!

please come down hahaa...

[dydx]

Mr Anthony Tay Song Seng (aged 62), a founder, ED, and the largest shareholder holding a 32.24% stake in Adampak, will be re-designated as a Non-Executive Non-Independent Director with effect from 1Jan12.....
http://info.sgx.com/webcoranncatth.nsf/V...6001F2273/$file/Adampak_Redesignation_and_Reconstitution_30122011.pdf?openelement
Mr Chua Cheng Song (CEO) will assume the role and responsibilities of Mr Anthony Tay Song Seng.

Mr Tay's stepping down from his executive role in Adampak should save the company some $500k a year in his cash remuneration package. More importantly, should Mr Tay decide to go for early retirememnt and sell his entire 32.24% stake in Adampak to a 3rd-party, it will trigger a GO for the entire company.

[pianist]

thanks for the nice insight..adampak no matter how i see remains triple AAA in my own internal credit rating. I have no doubt on the capabilities of CEO Mr Chua Cheng Song to assume this additional role.

[Jacmar]

yup come down!

Hi Drizzt, saw your analysis at your blog. I myself have looked at this stock for quite sometime but decided not to go in. couple of reasons:

1. they don't have a DCA. companies like Adampak comes and goes as technology shifted. I asked myself will adampak be around 10 years from now? i cannot give a definite yes unlike a coke. this is why WB don't invest in technology companies for quite sometime until IBM.IBM is building up their DCA when they moved out of the hardware biz.My whole career is in the technology field and i have seen the turnover of technology and companies as fast and furious.

2. hard disk will still have a place but as a share of storage it will diminish over time even though it still enjoys the cost advantage.one thing about technology space is that it is not the just the cost that sometimes wins the game. look at apple product history eg mac computer selling more expensive and that they sell by the loads.

again just my 2 cents worth for the new year.

[dydx]

My whole career is in the technology field and i have seen the turnover of technology and companies as fast and furious.

Adampak as a company and business was first founded in Jan 1979 - i.e. some 33 years ago! - and I guess its history is longer than the average length of career for most working people.

Adampak was first listed on SGX Mainboard in Sep 2004 - i.e. over 7 years ago - and the company has been paying out good and increasing dividends over the years funded from its solid recurrent profits and FCF.

We can all easily read about Adampak's history by reviewing its IPO prospectus and recent ARs.....
http://info.sgx.com/webipo.nsf/ddd103e44...60013e37c/$FILE/Adampak%20Prospectus%20(clean).pdf

Quite clearly, making precision labels does not carry the same risks associated with making high-tech products, and the usage of labels is everywhere in our daily lives and ever increasing. When I visit the supermart to pick up my grocery, I always notice that I would have inadvertently 'consumed' quite a few labels from the loose vegetables (e.g. ginger, tomato, carrot, etc.) that I have to buy every week. When I checked in my bags at Changi Airport last week, there were 4 labels on each of my 2 bags.

[Jacmar]

Quite clearly, making precision labels does not carry the same risks associated with making high-tech products, and the usage of labels is everywhere in our daily lives and ever increasing. When I visit the supermart to pick up my grocery, I always notice that I would have inadvertently 'consumed' quite a few labels from the loose vegetables (e.g. ginger, tomato, carrot, etc.) that I have to buy every week. When I checked in my bags at Changi Airport last week, there were 4 labels on each of my 2 bags.

Exactly becos making precision labels is not very high tech and hence the low barrier to entry.
The type of label that you see in the supermart is not what adampak specialise in. Correct me if i am wrong from those invested in Adampak. they are more into high performance kind of labels eg poyimide base labels that can withstand high temp or those that is clean room types, etc.

[honeyclover]

Adampak still depends a lot on the HDD market, half of its revenue from only two major customers.

vested for its cashflow strength & low gearing.

As to how technology will impact its business, only time will tell.
half of my stock holdings in Adampak cum leverage =x

[FFNow]

What percentage of the overall cost of making a HDD do the labels and die-cut parts constitute?

---

SSD prices are falling faster than HDD (22nd Dec 2011) - http://vr-zone.com/articles/ssd-prices-a...14312.html

[Drizzt]

i should think the overall cost is much much less. but i will not have the actual figure. Jacmar, in 10 years time they should be standing. how strong is another question. i have highlighted the threat of substitutes. this is not the buffett type of business definitely, but it is something that is closely link to how well the management manages. given another set of management and it is likely to get mismanaged.

if you are uncomfortable with this aspect (since buffett always say you would rather be in a business where an idiot can run and wont be killed) then i am afraid adampak is not for u.

vested but very tiny.

[freedom]

my thought is that given Adampak's strong balance sheet, it is no doubt that it can survive a crisis. But is survival enough for an investment? For a company to be a valuable investment, it is also very important that its business can continue to generate profit after its survival of any crisis.

I believe there is still uncertainty about the HDD business of Adampak. Will HDD be obsolete in the near future? Can the sale volume of HDD continue(consumer electronics are using more SSD instead of HDD)? Can the profit of Adampak's HDD continue given that HDD price continues to drop and capacity continues to rise, which will impact HDD producers' (WDC & Seagate) profit and sales volume?