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Stocks Z / Zindart Limited ADR


Subject:  Re: Why so low? Date:  7/19/1999  5:47 PM
Author:  badgley Number:  3 of 8

I think one of the reasons that the stock's valuation is so low is that its market cap. is less than $100m. Apparently this puts it below the radar screen for a lot of brokers, who should otherwise be covering this company. I agree that it's in an interesting area (I own a few shares in it, to reveal my bias).
The Asian manufacturers of toys and collectibles will continue to dominate the production business, as it's impossible to match their production costs, given the amount of labor required to make today's detailed models and figures. The question then becomes how good are their relations with the major toy/model comapnies, and Zindart has been doing business with (amongst others) Mattel, Ertl and Hot Wheels, for a number of years. I think they announced that Mattel were moving some of their small diecast work to their own factories in Thailand, but replacing it with higher margin larger diecast work. However, this was enough to halve the stock price, a typical over-reaction. The financial yearend nos. (to Mar 31 1999) were okay, altho'the earnings per share growth was dliuted by the shares they issued to take over a printing and packaging concern called Hua Yang last year.
They look a very sound company and have professional management, contributed by the American venture capitalists who brought it public two years ago.
Hope this helps
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