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Hi All,
I am new here. I have also been doing some research on Adampak. 50% of revenue comes from stickers to HDD. It will be an impt driver for some time. But I think the co. is trying to diversify away as well.
I have a few questions which I hope whoever had researched deeply could answer
1. Of the 700mn units of HDD sold every year, what is Adampak's market share? What is the market share of the 2 closest competitors?
2. How much price decline does its client ask for per quarter? Or has the pricing been stable?
3. Which are the new areas that the firm intends to diversify?
4. Bargaining power with its suppliers?
Thanks!
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http://8percentpa.blogspot.com
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22-10-2010, 09:21 AM
(This post was last modified: 22-10-2010, 09:26 AM by Musicwhiz.)
Hi 8percentpa!
Welcome to Value Buddies, I've been reading your blog consistently, keep up the good work! Value investing blogs are generally much more rare...... 
Just curious though, which SGX-listed companies do you own? I note you did not mention your portfolio on your blog.
Thanks! 
Oh sorry, forgot to mention - dydx can help you with your queries I think. He has researched into Adampak for quite a while now!
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Hi MW,
I am been thinking about blogging individual stock analysis, as there is only so much you can write about value philosophy and ideas.
I haven't really done a detailed portfolio analysis like you over the years. I think you have really done a great job with you blog. I am a very frequent visitor there as well.
Some of the stocks I own include Singtel, SMRT and SBS Transit. I usually go for the big caps.
Adampak and Viz looks interesting, but small caps comes with a lot of other issues.
Sadly as much as I like investing, I don't have the luxury of time to do detailed analysis, read thru a lot of reports, deal with rights issue etc.
Hence I prefer to buy stocks that I know can give some decent dividend, a bit of capital appreciation and won't go bust. Well at least up til now.
Hopefully I find the impetus to buy some of these interesting small caps in time.
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these questions can be best asked during the AGM..i bet the directors will be happy to answer your queries..pls share with us..
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http://h20435.www2.hp.com/t5/The-Next-Be...ba-p/58341
The new HP tablet. Using 64gb flash. Its just a matter of time all new pc and laptop will use flash disk.
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possible..however when that time flash disk completely overshaow hdd, my adampak holding (held since ipo) would probably literally be free by netting off against consistent yearly dividends received..presently my purchase price net against dividends is close to 0.10..i guess 'literally free' will happen within a few year times..hopefully hdd should still be around ;p
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The tablet PC is just yet another type of PC, just like the desktop, laptop, palmtop - all still in demand and volume production - which came before it. Whether flash drives can completely replace HDDs will depend on whether flash drives are able to prevail over HDDs in all key technical aspects, and also in economics - i.e. cost per GB - and prices. What is quiet certain is that both flash drives and HDDs will continue to evolve and advance technically, and as demand for digital data storage continues to grow globally and diversify into more and new areas of usage and in our modern society, the battle between the 2 will continue. What is also quite certain is that the IT revolution will continue to spread globally, and eventually even poor countries will be buying more and more low-price PCs and other gadgets, and that simply means HDDs as the lowest-cost digital data storage devices will be in demand for a long time, even if flash derives succeed in prevailing over HDDs in certain techical aspects.
I think it is also relevant and important to bear in mind that Adampak's business has proven resilience - i.e. it can continue to operate profitably even under very tough economic/market conditions or even after a sudden external shock. Q1-FY09 - after a global financial crisis which started in Q3-08 leading to a short global recession which lasted till end Q2-09 - which was the worst quarter ever and the bottom of the last crisis, is a great proof of Adampak's resilience.....
http://info.sgx.com/webcoranncatth.nsf/V...60025C684/$file/AdampakLimited_Results1Q2009.pdf?openelement
In Q1-FY09, Adampak's revenue fell a sharp 31.2% yoy to only USD9.651m, and NP fell a sharper 62% yoy to USD624k, but the business continued and managed to generate solid FCF to the tune of USD1.1m.
Of course, Adampak's business and profit have since rebounded strongly and smartly.
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The just released Q3-FY10 results have no surprises. Despite the recent sharp fall in the USD (against nearly all other currencies) - which has led to a USD240k net forex loss (presumably a portion of which is of translational nature) in Q3 - Adampak and its rock-solid business has again delivered admirably.....
http://info.sgx.com/webcoranncatth.nsf/V...80031C004/$file/ResultsQ3_2010.pdf?openelement [Results announcement]
http://info.sgx.com/webcoranncatth.nsf/V...80031C004/$file/PressRelease3Q2010.pdf?openelement [Press release]
This is a little pleasant surprise though - in Q3 Adampak booked another gain of USD61k on disposal of plant & equipment which brought in sales proceeds of USD99k (extracted from the Cash Flow Statement). This again indicates the conservatism that exists in Adampak's way of managing its affairs and accounting, as even its old and written down production equipment have been sold for a good profit quite consistently.
Looking at Adampak's bulging net cash reserve, again I start to imagine another increase in the coming FY10 Final dividend (last FY09: $0.015/share).
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Adampak is conducting a Q3-FY10 Results Briefing for analysts, fund managers and investors, at 3 p.m. today (18Nov10), and has just released the related presentation slides via SGX ahead of the meeting.....
http://info.sgx.com/webcoranncatth.nsf/V...F000F4995/$file/ResultsBriefing3Q2010.pdf?openelement
As usual, there are lots of useful data on Adampak's operating performance.
Operating margins of the underlying business continues to improve, and Slide #4 gives a very clear summary on that.
I bet such positive results and operating performance will move some analysts to upgrade this counter again.
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(25-09-2010, 03:43 PM)dydx Wrote: Is Adampak overly exposed or relying on the HDD sector to grow? Not really, as other customer segments like non-HDD electronics (including telecommunication devices), other consumer goods (e.g. brown/white goods, like TVs, refrigerators, etc), pharmaceutical/medical products, logistics, retail, etc., have continued to provide a regular flow of business volume. HDD just happens to be the 'prettiest girl' for now!
The most marvellous thing about the world usage of pressure-sensitive, adhesive materials is that it is ever-increasing. To appreciate this point, we must take a close look at Adampak's comprehensive range of products, and apply some imagination to understand their wide applications in our modern world.....
http://www.adampak.com.sg/Products/Index.htm
I've taken a look at the wide range of goods (not just HDD) that require Adampak's (as well as Zephyr and Brady Corp) products. Going forward, i do also foresee that there will always be a demand for them. In fact, to be simplistic, the demand should increase with the ever increasing range of goods produced.
dydx, thanks for highlighting this company!
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