I was there for a short while before running back to office. I think there were only 9 shareholders attending. Had a rather brief conversation with Lim Siang Kai and the staff who brought along the products which I didn't get his name.
Clearly, Tsoi Kin Chit is not exactly conversant in English (not sure how much he understands, but Lim Siang Kai is effectively responsible for the communications and hence the chair for the AGM). Simon Wong was seen to be translating to him.
Tsoi Kin Chit comes across as a person with a calm demeanour, hard worker, down to earth, steadfast, prudent and quite important, not flashy or flamboyant. He speaks Hokkien and gives the impression that he is "on top of things", and clearly knowledgeable of the business. Given the track record, it supports that he is strong in operations and execution. If I have to use DISC, he is likely a dominant S with secondary C. Perhaps a bit of D and not so much I.
I am inclined to hold the view that his leadership and development style is cautious, taking incremental steps to expand the business. Nothing disruptive, transformational, or major leaps. No major surprise to expect from the business.
Simon Wong should be a Hong Konger. He didn't appear as prepared as I thought would be. Figures weren't straight from his head. He didn't come across as sharp as I would imagine. I think Lim Siang Kai had more of the key figures at the tip of his tongue.
Lim Siang Kai on the other hand, gave me the impression that he is sharp, possesses strong analytical skills, and would be extremely skilled in dissecting issues. From the information that he shared, I would extrapolate that he had a strong understanding of the business landscape, company operations, and had done his own work in analysing the company. I am convinced that he had discharged his duties as Lead ID well. He had dedicated time and effort into this company.
Cai Fengquan, Tsoi Kin Chit's son, was rather reserved. He didn't come across as engaged and had the same level of ownership as his father. I would have imagined him to be the right hand. Looking at his profile, can imagine somewhat. He's trained in and had past experience in IT. He was probably persuaded to help his father and not out of passion.
I think the BoD lacked someone with drive and progressive ideas to take the business to a different level, which I think the company do have the potential in a bigger way.
I noted that Cai Lian Yong and Cai Zhi Meng both being DGM and in the same salary band but had very different compensation structures. The former have a 93% basic opposed to the latter at 50%. Wonder why but didn't pose this question though.
I took a look at 2 umbrellas, both which had water changing properties. One had a silkscreen type of imprint on the umbrella fabric where you can see white-yellow design patches. These patches when in contact with water changes colour. This is something interesting which I've not seen. I asked and was told that this is printed onto the fabric and not part of the fabric manufacturing process.
What this means that this technology and the setup could possibly be shifted into other application areas. They can license or create a job shop to offer this service as a revenue source.
One limitation which I see is the colour limitation. I didn't ask further but from what I see, it is probably limited to 8 colours or so. The resolution and colour spectrum is not a the level of fashion or more professional purpose. I think that if the colour gamut could increase to hundreds of colours, the application areas would be interesting and perhaps open a blue ocean.
Another area for improvement would be the tactile feel of these patches. If it can blend into the fabric or have a more sensual or softer feel, it could be used for fashion pieces. Immediately, I think it could be used for outdoor banners, tentages, etc. Now if instead of being water reactive but sunlight or temperature reactive, it could be a great replacement for billboards, etc. showing different information at different times of the day. Cheaper than electronic or mechanical multi-ad bill boards and more interesting than those giant building posters.
The other umbrella, instead of having the obvious patches which felt rough had the water reactive imprints "invisible" until wet. Didn't ask if this is an imprinting overlay like the white-yellow patches though.
They also brought a few "swatches" of the fabric they produce. Unfortunately, I wasn't overly impressed. Perhaps I was bought into Uniqlo. Uniqlo was what opened my eyes to fabric technology. Uniqlo have very interesting fabric technology. The velvety smooth feel and all. It's no longer just cotton, polyester, nylon, microfibre, etc. Run your hands through the various Uniqlo apparel and feel it for yourself, especially their new Airism and the Quick Dry (or similar fabric). Recently there's a sports oriented fabric developed with Tokyo Uni. They also have a raincoat that is really thin and lightweight.
Foreland's fabric tend to be thick, and have a rough feel. Waterproofing may be one thing, but we all know why Goretex is THE material to go for in apparels like raincoats, shoes, and all for a good reason. Why should high quality umbrella fabric be any different? I might be setting a wrong benchmark but I was expecting a similarly high quality finish for a top umbrella fabric maker. Umbrella fabric should also be sell-able to raincoat manufacturers no? Motorcycle raincoats, trekking raincoats, etc.
I probably missed mentioning earlier that their revenue diversity comes from 55% umbrella fabric and 45% functional fabrics. Margin for all fabrics are similar. I think there should be greater diversity by riding on their distinctive core competency. A differentiating factor that can give them a competitive advantage instead of just manufacturing quality umbrella fabric which does not provide high barrier of entry to the segment.
They do have patents on their fabric treatment or manufacturing processes. Leveraging on their fabric technology knowhow, patents, etc. they can create a moat and a high barrier around their product line and target market segment.
I asked Lim Siang Kai about their R&D investment. There's no fixed guidance but generally 50% on improving current fabric technology for existing characteristics like UV, water reaction, memory effect, etc. The other 50% is on developing new technology/characteristic (maybe mosquito repelling? haha which would be great for Tekong usage).
On the note of competitors, there are a few from ROC. Whatever fabric characteristic Foreland fabric has, their competitors have the same. They are certainly not unique. They differ in the manufacturing process. Foreland's current advantage over the ROC is in cheaper COGS. The question here is with ROC's track record, when will they have better technology that will allow them to create better characteristics or lower their COGS, eventually displacing Foreland? How well is Foreland doing in this regard?
Foreland currently operates a lean model. Cost control gives good margin. Very industrial style. Remember though that wages are rising in PRC. Honda and Hon Hai increased substantial wages of their workers within a short time period. How is this affecting Foreland? Didn't ask this question at the AGM. Going forward, how would the margin be affected?
Interestingly, Foreland exports their fabric to ROC where they competitors are also exporting into PRC.
After attending the AGM am I more assure of company? Yes, I think they're not a fly-by-night company. My comfort level of an accounting fraud happening has improved. They have strong fundamentals (both finance and business wise). I feel more assured of the management of the company.
However, I'm not too certain how this will ride out. Am I sufficiently confident to increase my holdings and average down? Maybe I'll take a few days to digest and process.
Clearly, Tsoi Kin Chit is not exactly conversant in English (not sure how much he understands, but Lim Siang Kai is effectively responsible for the communications and hence the chair for the AGM). Simon Wong was seen to be translating to him.
Tsoi Kin Chit comes across as a person with a calm demeanour, hard worker, down to earth, steadfast, prudent and quite important, not flashy or flamboyant. He speaks Hokkien and gives the impression that he is "on top of things", and clearly knowledgeable of the business. Given the track record, it supports that he is strong in operations and execution. If I have to use DISC, he is likely a dominant S with secondary C. Perhaps a bit of D and not so much I.
I am inclined to hold the view that his leadership and development style is cautious, taking incremental steps to expand the business. Nothing disruptive, transformational, or major leaps. No major surprise to expect from the business.
Simon Wong should be a Hong Konger. He didn't appear as prepared as I thought would be. Figures weren't straight from his head. He didn't come across as sharp as I would imagine. I think Lim Siang Kai had more of the key figures at the tip of his tongue.
Lim Siang Kai on the other hand, gave me the impression that he is sharp, possesses strong analytical skills, and would be extremely skilled in dissecting issues. From the information that he shared, I would extrapolate that he had a strong understanding of the business landscape, company operations, and had done his own work in analysing the company. I am convinced that he had discharged his duties as Lead ID well. He had dedicated time and effort into this company.
Cai Fengquan, Tsoi Kin Chit's son, was rather reserved. He didn't come across as engaged and had the same level of ownership as his father. I would have imagined him to be the right hand. Looking at his profile, can imagine somewhat. He's trained in and had past experience in IT. He was probably persuaded to help his father and not out of passion.
I think the BoD lacked someone with drive and progressive ideas to take the business to a different level, which I think the company do have the potential in a bigger way.
I noted that Cai Lian Yong and Cai Zhi Meng both being DGM and in the same salary band but had very different compensation structures. The former have a 93% basic opposed to the latter at 50%. Wonder why but didn't pose this question though.
I took a look at 2 umbrellas, both which had water changing properties. One had a silkscreen type of imprint on the umbrella fabric where you can see white-yellow design patches. These patches when in contact with water changes colour. This is something interesting which I've not seen. I asked and was told that this is printed onto the fabric and not part of the fabric manufacturing process.
What this means that this technology and the setup could possibly be shifted into other application areas. They can license or create a job shop to offer this service as a revenue source.
One limitation which I see is the colour limitation. I didn't ask further but from what I see, it is probably limited to 8 colours or so. The resolution and colour spectrum is not a the level of fashion or more professional purpose. I think that if the colour gamut could increase to hundreds of colours, the application areas would be interesting and perhaps open a blue ocean.
Another area for improvement would be the tactile feel of these patches. If it can blend into the fabric or have a more sensual or softer feel, it could be used for fashion pieces. Immediately, I think it could be used for outdoor banners, tentages, etc. Now if instead of being water reactive but sunlight or temperature reactive, it could be a great replacement for billboards, etc. showing different information at different times of the day. Cheaper than electronic or mechanical multi-ad bill boards and more interesting than those giant building posters.
The other umbrella, instead of having the obvious patches which felt rough had the water reactive imprints "invisible" until wet. Didn't ask if this is an imprinting overlay like the white-yellow patches though.
They also brought a few "swatches" of the fabric they produce. Unfortunately, I wasn't overly impressed. Perhaps I was bought into Uniqlo. Uniqlo was what opened my eyes to fabric technology. Uniqlo have very interesting fabric technology. The velvety smooth feel and all. It's no longer just cotton, polyester, nylon, microfibre, etc. Run your hands through the various Uniqlo apparel and feel it for yourself, especially their new Airism and the Quick Dry (or similar fabric). Recently there's a sports oriented fabric developed with Tokyo Uni. They also have a raincoat that is really thin and lightweight.
Foreland's fabric tend to be thick, and have a rough feel. Waterproofing may be one thing, but we all know why Goretex is THE material to go for in apparels like raincoats, shoes, and all for a good reason. Why should high quality umbrella fabric be any different? I might be setting a wrong benchmark but I was expecting a similarly high quality finish for a top umbrella fabric maker. Umbrella fabric should also be sell-able to raincoat manufacturers no? Motorcycle raincoats, trekking raincoats, etc.
I probably missed mentioning earlier that their revenue diversity comes from 55% umbrella fabric and 45% functional fabrics. Margin for all fabrics are similar. I think there should be greater diversity by riding on their distinctive core competency. A differentiating factor that can give them a competitive advantage instead of just manufacturing quality umbrella fabric which does not provide high barrier of entry to the segment.
They do have patents on their fabric treatment or manufacturing processes. Leveraging on their fabric technology knowhow, patents, etc. they can create a moat and a high barrier around their product line and target market segment.
I asked Lim Siang Kai about their R&D investment. There's no fixed guidance but generally 50% on improving current fabric technology for existing characteristics like UV, water reaction, memory effect, etc. The other 50% is on developing new technology/characteristic (maybe mosquito repelling? haha which would be great for Tekong usage).
On the note of competitors, there are a few from ROC. Whatever fabric characteristic Foreland fabric has, their competitors have the same. They are certainly not unique. They differ in the manufacturing process. Foreland's current advantage over the ROC is in cheaper COGS. The question here is with ROC's track record, when will they have better technology that will allow them to create better characteristics or lower their COGS, eventually displacing Foreland? How well is Foreland doing in this regard?
Foreland currently operates a lean model. Cost control gives good margin. Very industrial style. Remember though that wages are rising in PRC. Honda and Hon Hai increased substantial wages of their workers within a short time period. How is this affecting Foreland? Didn't ask this question at the AGM. Going forward, how would the margin be affected?
Interestingly, Foreland exports their fabric to ROC where they competitors are also exporting into PRC.
After attending the AGM am I more assure of company? Yes, I think they're not a fly-by-night company. My comfort level of an accounting fraud happening has improved. They have strong fundamentals (both finance and business wise). I feel more assured of the management of the company.
However, I'm not too certain how this will ride out. Am I sufficiently confident to increase my holdings and average down? Maybe I'll take a few days to digest and process.