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http://infopub.sgx.com/Apps?A=COW_CorpAn...or3Q15.pdf

Jelek... shows how volatile its business model can be

(28-03-2015, 10:37 AM)BlueKelah Wrote: [ -> ]Hopefully they can secure orders from other smartphone companies. It seems starting this year sony is looking to either sell off or slim down their smartphone division. Their six monthly release of xperia line will become a yearly release now. Good move by sony as the six monthly.release was just ridiculous.  However this might impact cdw business, though hard to say since they were constrained by lack of parts which means orders are flowing in.

Just wanted to update...
we were talking about Sony being the end client for CDW, but I think that's wrong.
CDW cannot publicly say it, but the major client is likely to be SHARP.

(10-12-2015, 11:12 PM)GFG Wrote: [ -> ]

(28-03-2015, 10:37 AM)BlueKelah Wrote: [ -> ]Hopefully they can secure orders from other smartphone companies. It seems starting this year sony is looking to either sell off or slim down their smartphone division. Their six monthly release of xperia line will become a yearly release now. Good move by sony as the six monthly.release was just ridiculous.  However this might impact cdw business, though hard to say since they were constrained by lack of parts which means orders are flowing in.

Just wanted to update...
we were talking about Sony being the end client for CDW, but I think that's wrong.
CDW cannot publicly say it, but the major client is likely to be SHARP.

Even after reaching 52wk lows, it does look like its going to get much more ugly for CDW.
I really like CDW management and think they're competent and doing their best.
It's really a case of good management in a very tough business environment and there's not much they can do about it.
Sharp is in talks to offload their LCD business, and there's no guarantee that the new owner will continue ordering from CDW.
Even if they do, they'd press CDW very hard on the costs. That's the big problem with having a single client accounting for 69% of your revenue.
On top of that, Xiaomi, which is the end client in turn for Sharp's LCDs for smartphones, is having a poor 2015, with 2016 looking bad too.
They have revised number of smartphone sales from 100m down to 80m, and now even 80m looks unlikely.

(24-08-2015, 08:14 PM)krowten Wrote: [ -> ]With the drop in price today, the yield is > 10% at the last closing price of $0.148.

Market cap is $70.3m with $60.8m of cash and $13.4m of borrowing.

Getting attractive.

I've done quite a bit of work on CDW and I'm afraid i'll have to disagree on this.
The yield is not a good way to assess because it can change anytime.
Currently, it does look like CDW has adequate cash to support the yield, and they do have a good track record of gradually maintaining and increasing their dividends.
But the more important thing is to look at the mid to long term prospects.
If anything happens to their major end client, it is very hard for CDW to even survive if they lose that 1 contract. The yield for sure, goes out of the window in this scenario.
I don't think $0.148 is attractive at this stage until there's more visibility to CDW's prospects.
I'll be rooting for them.

I have this in my watchlist since March 2014 when the price is still 14c. I have not vested in it as, back then,  I foreseen unsustainable dividend yield, coupled with the reduction of interest from the major shareholders, as well as the generous share options scheme for the top managements. Indeed I was wrong for the last 2 years, where we witnessed a maximum potential of 60% returns not counting the dividends. Though share price has now came down to the price I first observed, I did not get excited to join the boat this time, as to me the business moats now is not as good as before as can see from the quarterly results, I am still holding my opinion that the yield is not sustainable, and sudden overturn in profit and margin can happen any time. 

Lastly, in view of the widely expected financial crisis, I would choose to avoid high beta stocks now unless there is more than sufficient mos.

business moat analysis is only for big cap companies, small caps no need to analyse too much, business only tens of million, no such thing as moat.

SHARP may close shop, but just means less profit for CDW. There might be a big cut in revenue and profits but overall should be still profitable if not breakeven.

being in a very net cash position, short term the company will be ok, they can sell off factory/land from any loss making operations and downsize. 

Longer term can only speculate, anything can happen, they could go into manufacturing something else which will bring growth like what memtech did. After all they are a manufacturing company. They could get some contracts from JDI which does the iphone screens too. And their investment into new curved backlight thingie could kick off if the curvy edge type of phone starts coming into vogue.


now with such poor market sentiment and almost cash value, is good time to buy on dips, especially if it goes to cash value level or below. Limited downside. Problem is whether anyone wants to sell...

*starting to accumulate again*

(14-12-2015, 01:29 PM)valuebuddies Wrote: [ -> ]I have this in my watchlist since March 2014 when the price is still 14c. I have not vested in it as, back then,  I foreseen unsustainable dividend yield, coupled with the reduction of interest from the major shareholders, as well as the generous share options scheme for the top managements. Indeed I was wrong for the last 2 years, where we witnessed a maximum potential of 60% returns not counting the dividends. Though share price has now came down to the price I first observed, I did not get excited to join the boat this time, as to me the business moats now is not as good as before as can see from the quarterly results, I am still holding my opinion that the yield is not sustainable, and sudden overturn in profit and margin can happen any time. 

Lastly, in view of the widely expected financial crisis, I would choose to avoid high beta stocks now unless there is more than sufficient mos.

For the record, I'm still vested (small stake of 400 lots, no change from earlier posts) so I guess I'm talking AGAINST my own books here.

The business environment for CDW is really tough this year, and likely next as well.
Like I said, I've done a lot of work on CDW recently and they are undergoing a very tough time.
I think VB brothers who just merely look at the cash on its balance sheet, and (what is a favorite of most people) div yield, will be sorely misled.
Here's a very quick summary of the macro environment:
CDW supplies light guide panels ---> SHARP which in turn supplies LCD panels ---> mainly to Xiaomi. Also the 3rd supplier (in ranking) to Apple.
Closest japanese competitor is Japan Display.
Unfortunately for ALL the japanese LCD providers, the korean and chinese competitors have really undercut them, and they're all suffering. The MRQ analysis in SHARP's financials shows their LCD division is falling off a cliff. To top it off, in reality it's worse for CDW as CDW mainly supplies for the smartphone portion of the LCD division and SHARP's bigger LCD panels (eg. TVs) actually did better than the smaller panels (smartphones). So the combined figure given by SHARP for their LCD division (Even though its bad enough) is actually worse for the smartphone LCD component.
These figures pretty much coincide with the end client too: Xiaomi is having a mediocre year, and they have revised down their projections for total smartphone sales twice this year. And yet the latest report is that they are likely to miss even the latest projection. (80million units)
On top of that, in the mrq, SHARP has indicated that they will be presurrizing their suppliers to control costs, and all this relates to more margin compression for CDW.
Now, all this is not as important as the last factor: SHARP is now exploring a complete sale / joint venture for its LCD division. This is likely to be with JDI, but unfortunately JDI themselves are suffering. Foxconn (Taiwanese) is actually a better fit IMO, and they are keen too but this is unlikely to happen as Japan wants to keep SHARP's superior LCD technology within Japan. Which is really unfortunate IMO because combining 2 bad apples doesnt make it better.
Even with JDI, they are still going to find it hard to compete with the korean and chinese counterparts. BTW, Sharp has just gotten its 2nd bailout so a lot of this divestment talk is forced upon them. Sharp's CEO had earlier in the year declared that the LCD division will stay within Sharp, but has now done a turnabout and is considering sale or JV.
If the LCD is sold, there is no guarantee that CDW will get orders. Even if they do, the new owners will likely negotiate tougher terms for CDW.
It's how turnarounds are done. Nobody buys over a failing/loss making entity, and goes back to work status quo etc. Before a final deal is done, the new owners would've done due diligence, and figured out a plan to try to make it profitable again. This more often than not, esp in this case, involves consolidation of suppliers and pressurizing suppliers using economies of scale. 
So CDW may be either cut, or they may get more orders, but with lower margins.
Normally this is not a death sentence for the company, especially one which is financially strong (Currently!)
But if Sharp account for 69% of the revenue, it is basically a death sentence.

Now for the positives:
- Sharp used to account for at 1 point, 76% of revenues and CDW management has said then that they'll try to diversify their revenue base. It has steadily dropped over the past 2 years to a current 69% so they have been doing what they said they'd do. Also, they've been trying to further diversify, you can see "other revenue" steadily increasing although it is still negligible currently. There's a tiny component that's related to some F&B business.
- Balance sheet is strong. As others mentioned, the business now has net cash, minimal debt, is free cash flow generative, discount to book value blah blah blah.
Here is where I think a bit of portfolio philosophy is needed. Sure, the business is great from a fundamental analysis point of view, but we have to remember that in certain industries, mainly tech related (CDW is considered within such an industry as its main revenue and main client is exposed to the sector heavily), macro factors are very important. The fundamental factors that are mentioned, is more likely due to a "built up" of past successes if i can put it that way.
- Management is honest and open. They have talked about such challenges repeatedly in the financial releases. There is also some discomfort about their management options issued (at a low exercise price of $0.105) but as I mentioned in an earlier post, it is not unreasonable as the price is around the share price when it was issued, and there's a fairly long gestation period. Sure, the main SH Kunikazu Yoshimi has sold shares in mid of 2014, but he has stepped down from management and it is not unusual or unfair to sell once they retire.
- Sharp has just launched in the middle of this year, a new in cell technology LCD. The pressure sensors are incorporated into the base of the LCD resulting in thinner screens. Generally I think Sharp has very superior LCD technology. They are just not able to combine the R&D and sales in a fashion to make it superior but the fact that there are suitors despite their LCD showing major losses, means that many insiders understand the value of Sharp's technology.
- When it comes to manufacturers like CDW, they actually enjoy a certain amount of pricing power simply by virtue of the long track record working with the client. From what i understand, not any manufacturer can approach Sharp to sell lightguide units. There's a certain accreditation process to make sure they're up to standard, so unless there are major cost savings, it is unlikely the client would switch to another supplier. Also, in some instances, the manufacturer actually provides inputs or suggestions to the end client, who may request for certain specs. So in this way, CDW's operations are not exactly commoditized and there's a certain pricing power there. Of course this cuts both ways. Cos it means when CDW approaches other LCD companies, it's harder to win contracts too.

Overall, like i said, it is a good company in a very tough environment. You can try to diversify revenue base, try to increase productivity by "Streamlining factory production" etc, but if the end client is not there, as a upstream manufacturer, things will always be tough.
Going forward, the key catalyst (whether catalyst for upside or downside), will largely depend on whether they manage to win new orders.
Until then, IMHO, even at $0.148, it is not a good value buy.
I'm not selling out cos its a small stake and while I'm not going to add now, I'm not offloading either and will hold to see how things pan out.
anyway current price ($0.14) is around my purchase price.

(15-12-2015, 12:05 PM)GFG Wrote: [ -> ]

(14-12-2015, 01:29 PM)valuebuddies Wrote: [ -> ]I have this in my watchlist since March 2014 when the price is still 14c. I have not vested in it as, back then,  I foreseen unsustainable dividend yield, coupled with the reduction of interest from the major shareholders, as well as the generous share options scheme for the top managements. Indeed I was wrong for the last 2 years, where we witnessed a maximum potential of 60% returns not counting the dividends. Though share price has now came down to the price I first observed, I did not get excited to join the boat this time, as to me the business moats now is not as good as before as can see from the quarterly results, I am still holding my opinion that the yield is not sustainable, and sudden overturn in profit and margin can happen any time. 

Lastly, in view of the widely expected financial crisis, I would choose to avoid high beta stocks now unless there is more than sufficient mos.

For the record, I'm still vested (small stake of 400 lots, no change from earlier posts) so I guess I'm talking AGAINST my own books here.

The business environment for CDW is really tough this year, and likely next as well.
Like I said, I've done a lot of work on CDW recently and they are undergoing a very tough time.
I think VB brothers who just merely look at the cash on its balance sheet, and (what is a favorite of most people) div yield, will be sorely misled.
Here's a very quick summary of the macro environment:
CDW supplies light guide panels ---> SHARP which in turn supplies LCD panels ---> mainly to Xiaomi. Also the 3rd supplier (in ranking) to Apple.
Closest japanese competitor is Japan Display.
Unfortunately for ALL the japanese LCD providers, the korean and chinese competitors have really undercut them, and they're all suffering. The MRQ analysis in SHARP's financials shows their LCD division is falling off a cliff. To top it off, in reality it's worse for CDW as CDW mainly supplies for the smartphone portion of the LCD division and SHARP's bigger LCD panels (eg. TVs) actually did better than the smaller panels (smartphones). So the combined figure given by SHARP for their LCD division (Even though its bad enough) is actually worse for the smartphone LCD component.
These figures pretty much coincide with the end client too: Xiaomi is having a mediocre year, and they have revised down their projections for total smartphone sales twice this year. And yet the latest report is that they are likely to miss even the latest projection. (80million units)
On top of that, in the mrq, SHARP has indicated that they will be presurrizing their suppliers to control costs, and all this relates to more margin compression for CDW.
Now, all this is not as important as the last factor: SHARP is now exploring a complete sale / joint venture for its LCD division. This is likely to be with JDI, but unfortunately JDI themselves are suffering. Foxconn (Taiwanese) is actually a better fit IMO, and they are keen too but this is unlikely to happen as Japan wants to keep SHARP's superior LCD technology within Japan. Which is really unfortunate IMO because combining 2 bad apples doesnt make it better.
Even with JDI, they are still going to find it hard to compete with the korean and chinese counterparts. BTW, Sharp has just gotten its 2nd bailout so a lot of this divestment talk is forced upon them. Sharp's CEO had earlier in the year declared that the LCD division will stay within Sharp, but has now done a turnabout and is considering sale or JV.
If the LCD is sold, there is no guarantee that CDW will get orders. Even if they do, the new owners will likely negotiate tougher terms for CDW.
It's how turnarounds are done. Nobody buys over a failing/loss making entity, and goes back to work status quo etc. Before a final deal is done, the new owners would've done due diligence, and figured out a plan to try to make it profitable again. This more often than not, esp in this case, involves consolidation of suppliers and pressurizing suppliers using economies of scale. 
So CDW may be either cut, or they may get more orders, but with lower margins.
Normally this is not a death sentence for the company, especially one which is financially strong (Currently!)
But if Sharp account for 69% of the revenue, it is basically a death sentence.

Now for the positives:
- Sharp used to account for at 1 point, 76% of revenues and CDW management has said then that they'll try to diversify their revenue base. It has steadily dropped over the past 2 years to a current 69% so they have been doing what they said they'd do. Also, they've been trying to further diversify, you can see "other revenue" steadily increasing although it is still negligible currently. There's a tiny component that's related to some F&B business.
- Balance sheet is strong. As others mentioned, the business now has net cash, minimal debt, is free cash flow generative, discount to book value blah blah blah.
Here is where I think a bit of portfolio philosophy is needed. Sure, the business is great from a fundamental analysis point of view, but we have to remember that in certain industries, mainly tech related (CDW is considered within such an industry as its main revenue and main client is exposed to the sector heavily), macro factors are very important. The fundamental factors that are mentioned, is more likely due to a "built up" of past successes if i can put it that way.
- Management is honest and open. They have talked about such challenges repeatedly in the financial releases. There is also some discomfort about their management options issued (at a low exercise price of $0.105) but as I mentioned in an earlier post, it is not unreasonable as the price is around the share price when it was issued, and there's a fairly long gestation period. Sure, the main SH Kunikazu Yoshimi has sold shares in mid of 2014, but he has stepped down from management and it is not unusual or unfair to sell once they retire.
- Sharp has just launched in the middle of this year, a new in cell technology LCD. The pressure sensors are incorporated into the base of the LCD resulting in thinner screens. Generally I think Sharp has very superior LCD technology. They are just not able to combine the R&D and sales in a fashion to make it superior but the fact that there are suitors despite their LCD showing major losses, means that many insiders understand the value of Sharp's technology.
- When it comes to manufacturers like CDW, they actually enjoy a certain amount of pricing power simply by virtue of the long track record working with the client. From what i understand, not any manufacturer can approach Sharp to sell lightguide units. There's a certain accreditation process to make sure they're up to standard, so unless there are major cost savings, it is unlikely the client would switch to another supplier. Also, in some instances, the manufacturer actually provides inputs or suggestions to the end client, who may request for certain specs. So in this way, CDW's operations are not exactly commoditized and there's a certain pricing power there. Of course this cuts both ways. Cos it means when CDW approaches other LCD companies, it's harder to win contracts too.

Overall, like i said, it is a good company in a very tough environment. You can try to diversify revenue base, try to increase productivity by "Streamlining factory production" etc, but if the end client is not there, as a upstream manufacturer, things will always be tough.
Going forward, the key catalyst (whether catalyst for upside or downside), will largely depend on whether they manage to win new orders.
Until then, IMHO, even at $0.148, it is not a good value buy.
I'm not selling out cos its a small stake and while I'm not going to add now, I'm not offloading either and will hold to see how things pan out.
anyway current price ($0.14) is around my purchase price.

GFG thanks for sharing the info you have dug up.

my take is that if one were to look at business side of things, then the VALUE word should not be used. Since at any price this company will not be a "good value buy" under current circumstances, as you have put it a "death sentence" is likely coming, and already the decline in revenue and profits is apparent in latest financials. it would be more appropriate to classify such analysis with the GROWTH word. CDW is definitely not a good GROWTH BUY, but would not say it is not a good value buy....

CDW at 14c presents some good value(just good not fantastic or excellent) at current prices IMHO. If one were to believe they have the cash they say they have, 13c is net cash. This means paying only 1c for the rest of the business and hard assets(NAV ex-cash would be ~6cents). Even if one were to write off the business, there are still some factory/land sitting around. granted its not as delicious as say paying "50c for a dollar" or getting "60% of NCAV". At the moment business may be difficult and future looks bleak, but CDW with no net debt and a SHITLOAD of cash is in a pretty good position to either sit back and weather the storm or capitalise on picking up cheap assets when opportunity arise. Other korean/chinese competitors and suppliers to the LCD industrywill probably suffer a downcycle as well and may not even exist in a few years time.


For comparison, a similar company would be AEH. Almost at cash value and operations ramped down just sitting tight till next up-cycle.

Cash is always king when markets/business is bad and everyone is running for the exit. Pretty sure that's why we are still vested in this little bugger.

(16-12-2015, 12:57 PM)BlueKelah Wrote: [ -> ]

(15-12-2015, 12:05 PM)GFG Wrote: [ -> ]

(14-12-2015, 01:29 PM)valuebuddies Wrote: [ -> ]I have this in my watchlist since March 2014 when the price is still 14c. I have not vested in it as, back then,  I foreseen unsustainable dividend yield, coupled with the reduction of interest from the major shareholders, as well as the generous share options scheme for the top managements. Indeed I was wrong for the last 2 years, where we witnessed a maximum potential of 60% returns not counting the dividends. Though share price has now came down to the price I first observed, I did not get excited to join the boat this time, as to me the business moats now is not as good as before as can see from the quarterly results, I am still holding my opinion that the yield is not sustainable, and sudden overturn in profit and margin can happen any time. 

Lastly, in view of the widely expected financial crisis, I would choose to avoid high beta stocks now unless there is more than sufficient mos.

For the record, I'm still vested (small stake of 400 lots, no change from earlier posts) so I guess I'm talking AGAINST my own books here.

The business environment for CDW is really tough this year, and likely next as well.
Like I said, I've done a lot of work on CDW recently and they are undergoing a very tough time.
I think VB brothers who just merely look at the cash on its balance sheet, and (what is a favorite of most people) div yield, will be sorely misled.
Here's a very quick summary of the macro environment:
CDW supplies light guide panels ---> SHARP which in turn supplies LCD panels ---> mainly to Xiaomi. Also the 3rd supplier (in ranking) to Apple.
Closest japanese competitor is Japan Display.
Unfortunately for ALL the japanese LCD providers, the korean and chinese competitors have really undercut them, and they're all suffering. The MRQ analysis in SHARP's financials shows their LCD division is falling off a cliff. To top it off, in reality it's worse for CDW as CDW mainly supplies for the smartphone portion of the LCD division and SHARP's bigger LCD panels (eg. TVs) actually did better than the smaller panels (smartphones). So the combined figure given by SHARP for their LCD division (Even though its bad enough) is actually worse for the smartphone LCD component.
These figures pretty much coincide with the end client too: Xiaomi is having a mediocre year, and they have revised down their projections for total smartphone sales twice this year. And yet the latest report is that they are likely to miss even the latest projection. (80million units)
On top of that, in the mrq, SHARP has indicated that they will be presurrizing their suppliers to control costs, and all this relates to more margin compression for CDW.
Now, all this is not as important as the last factor: SHARP is now exploring a complete sale / joint venture for its LCD division. This is likely to be with JDI, but unfortunately JDI themselves are suffering. Foxconn (Taiwanese) is actually a better fit IMO, and they are keen too but this is unlikely to happen as Japan wants to keep SHARP's superior LCD technology within Japan. Which is really unfortunate IMO because combining 2 bad apples doesnt make it better.
Even with JDI, they are still going to find it hard to compete with the korean and chinese counterparts. BTW, Sharp has just gotten its 2nd bailout so a lot of this divestment talk is forced upon them. Sharp's CEO had earlier in the year declared that the LCD division will stay within Sharp, but has now done a turnabout and is considering sale or JV.
If the LCD is sold, there is no guarantee that CDW will get orders. Even if they do, the new owners will likely negotiate tougher terms for CDW.
It's how turnarounds are done. Nobody buys over a failing/loss making entity, and goes back to work status quo etc. Before a final deal is done, the new owners would've done due diligence, and figured out a plan to try to make it profitable again. This more often than not, esp in this case, involves consolidation of suppliers and pressurizing suppliers using economies of scale. 
So CDW may be either cut, or they may get more orders, but with lower margins.
Normally this is not a death sentence for the company, especially one which is financially strong (Currently!)
But if Sharp account for 69% of the revenue, it is basically a death sentence.

Now for the positives:
- Sharp used to account for at 1 point, 76% of revenues and CDW management has said then that they'll try to diversify their revenue base. It has steadily dropped over the past 2 years to a current 69% so they have been doing what they said they'd do. Also, they've been trying to further diversify, you can see "other revenue" steadily increasing although it is still negligible currently. There's a tiny component that's related to some F&B business.
- Balance sheet is strong. As others mentioned, the business now has net cash, minimal debt, is free cash flow generative, discount to book value blah blah blah.
Here is where I think a bit of portfolio philosophy is needed. Sure, the business is great from a fundamental analysis point of view, but we have to remember that in certain industries, mainly tech related (CDW is considered within such an industry as its main revenue and main client is exposed to the sector heavily), macro factors are very important. The fundamental factors that are mentioned, is more likely due to a "built up" of past successes if i can put it that way.
- Management is honest and open. They have talked about such challenges repeatedly in the financial releases. There is also some discomfort about their management options issued (at a low exercise price of $0.105) but as I mentioned in an earlier post, it is not unreasonable as the price is around the share price when it was issued, and there's a fairly long gestation period. Sure, the main SH Kunikazu Yoshimi has sold shares in mid of 2014, but he has stepped down from management and it is not unusual or unfair to sell once they retire.
- Sharp has just launched in the middle of this year, a new in cell technology LCD. The pressure sensors are incorporated into the base of the LCD resulting in thinner screens. Generally I think Sharp has very superior LCD technology. They are just not able to combine the R&D and sales in a fashion to make it superior but the fact that there are suitors despite their LCD showing major losses, means that many insiders understand the value of Sharp's technology.
- When it comes to manufacturers like CDW, they actually enjoy a certain amount of pricing power simply by virtue of the long track record working with the client. From what i understand, not any manufacturer can approach Sharp to sell lightguide units. There's a certain accreditation process to make sure they're up to standard, so unless there are major cost savings, it is unlikely the client would switch to another supplier. Also, in some instances, the manufacturer actually provides inputs or suggestions to the end client, who may request for certain specs. So in this way, CDW's operations are not exactly commoditized and there's a certain pricing power there. Of course this cuts both ways. Cos it means when CDW approaches other LCD companies, it's harder to win contracts too.

Overall, like i said, it is a good company in a very tough environment. You can try to diversify revenue base, try to increase productivity by "Streamlining factory production" etc, but if the end client is not there, as a upstream manufacturer, things will always be tough.
Going forward, the key catalyst (whether catalyst for upside or downside), will largely depend on whether they manage to win new orders.
Until then, IMHO, even at $0.148, it is not a good value buy.
I'm not selling out cos its a small stake and while I'm not going to add now, I'm not offloading either and will hold to see how things pan out.
anyway current price ($0.14) is around my purchase price.

GFG thanks for sharing the info you have dug up.

my take is that if one were to look at business side of things, then the VALUE word should not be used. Since at any price this company will not be a "good value buy" under current circumstances, as you have put it a "death sentence" is likely coming, and already the decline in revenue and profits is apparent in latest financials. it would be more appropriate to classify such analysis with the GROWTH word. CDW is definitely not a good GROWTH BUY, but would not say it is not a good value buy....

CDW at 14c presents some good value(just good not fantastic or excellent) at current prices IMHO. If one were to believe they have the cash they say they have, 13c is net cash. This means paying only 1c for the rest of the business and hard assets(NAV ex-cash would be ~6cents). Even if one were to write off the business, there are still some factory/land sitting around. granted its not as delicious as say paying "50c for a dollar" or getting "60% of NCAV". At the moment business may be difficult and future looks bleak, but CDW with no net debt and a SHITLOAD of cash is in a pretty good position to either sit back and weather the storm or capitalise on picking up cheap assets when opportunity arise. Other korean/chinese competitors and suppliers to the LCD industrywill probably suffer a downcycle as well and may not even exist in a few years time.


For comparison, a similar company would be AEH. Almost at cash value and operations ramped down just sitting tight till next up-cycle.

Cash is always king when markets/business is bad and everyone is running for the exit. Pretty sure that's why we are still vested in this little bugger.

"....under current circumstances, as you have put it a "death sentence" is likely coming"

Nope, I didn't say a death sentence is likely coming. I said if they lose the 1 major client after the divestment by Sharp, then that's a death sentence.
They might not lose, or might even get more orders at lower margins.
I don't have visibility on that.
If I know for sure that they'd lose the client, then I wouldn't be holding. That'd be a conviction sell regardless of the current price.

There's a lot of other work I did on CDW, that's simply too long to write here.
Another aspect I didn't mention earlier is the LCD vs OLED technologies.
I suggest vested or interested VBs go read up on that.
I am not sure if there's an industry-wide push in future to OLEDs, will CDW be able to adapt and change to manufacture OLED related parts.
Bearing in mind that OLED technology does NOT need any backlight units.
Again I have no visibility on how things will pan out but I think SHs need to know of potential seismic shifts which can lead to the main product (backlight units in this case) being obsolete.

Also, Apple is now in the midst of building up their own LCD screen technology, so in the near future, they may be going upstream to manufacture their own screens and eliminate the need for LCD providers aka Sharp, JDI

"If one were to believe they have the cash they say they have, 13c is net cash. This means paying only 1c for the rest of the business and hard assets"

hmmm not sure if your calculation is the same as mine.
As of latest quarterly results, CDW has $57,499,000 USD cash. So if you mean cash per share, its about 11.6 US cents per share
(I take into account the outstanding share options that will likely get exercise so that is more conservative. The options are all in-the-money currently. So the total shares is 493,914,221)
I assume the 13c net cash is (total cash - current and non current bank borrowings)?
No doubt CDW has a strong BS, and management is conservative enough to hold cash precisely for situations like this where they may have to either invest or acquire to survive.

Apple expected to focus on micro-LED displays at new Taiwan facilities
Jessie Lin, Taipei; Alex Wolfgram, DIGITIMES [Wednesday 16 December 2015]

Apple is expected to focus on developing micro-LED displays at its new facilities in Taiwan in order to create thinner and more energy-efficient products, according to Digitimes Research analyst Jessie Lin.

Micro-LED displays eliminate the need for backlighting unlike traditional LCDs, and allow for improved color gamut in addition to higher resolution. However, the technology suffers from low yields when used in a TFT manufacturing process and therefore is difficult to mass produce.

Part of Apple's efforts at the Longtan facilities in Taiwan will be to improve yields for developing this emerging display technology, which is expected to be a contender against OLED displays, said Lin.

However, it is still too early to know whether Apple plans to use micro-LED displays for existing or new applications. Apple is showing signs of moving toward OLED for most of its small- to medium-size products as early as 2017-2018 based on emerging developments in the display industry.

The reported new Taiwan facilities follows the acquisition of micro-LED developer LuxVue in 2014.

http://www.digitimes.com/news/a20151216PD203.html
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Apple Taiwan lab developing flexible OLED technology, say sources

Cage Chao, Taipei; Jessie Shen, DIGITIMES [Wednesday 16 December 2015]

Apple's new lab in Longtan, northern Taiwan is dedicated to developing flexible OLED technology for new displays for use in its devices including iPhones and iPads, and has a team of R&D engineers recruited from local companies, according to sources in Taiwan's LCD driver IC sector.

Most of the engineers stationed at the new Apple lab worked previously for local display maker AU Optronics' (AUO) OLED department, and SolLink, Qualcomm's Mirasol display production joint venture with Taiwan's Foxlink, said the sources.

Bloomberg reported Apple has opened a lab in northern Taiwan where engineers are developing new screens for iPhones, iPads and Mac personal computers. At least 50 engineers and other workers are stationed at the facility.

http://www.digitimes.com/news/a20151216PD202.html
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