Venue: Wilkie Edge, Wilkie Road
Time & date: 3 pm, April 26.
ANWELL TECHNOLOGIES chairman Frankie Fan said he was upbeat on the business outlook for the company when he addressed concerns and questions of shareholders at the company AGM yesterday.
This, despite a HK$434.4 million net loss in FY2010 – although revenue hit a record HK$1.05 billion.
Anwell is in the business of developing equipment for manufacturing optical media (such as DVD-Rs and Blu-Ray) and manufacturing optical media and thin-film solar panels.
Here are highlights of the Q&A session at the AGM:
Q: The various segments of your business lost money last year. I believe the market is tough – can you tell us how you intend to overcome the challenges this year?
Frankie: This is a very good question. For the optical disc business, last year was the worst in the history of the industry. This resulted in a few of the top 10 manufacturers leaving the business. But since the beginning of the year, there were signs that the industry has bottomed out.
The market price of DVD-Rs five years ago was about 50 US cents each. It dropped to 8.5-9 cents in 4Q last year and 1Q this year. The price has started to pick up and today, it is 10.5-11 cents. Therefore, I believe the business will improve.
As for solar, last year was the first year we were in business. It took us time to tune up the machine for mass production, so we had a full-year of depreciation but only a few months of production.
Q: I believe the auditors have qualified the accounts because of the over HK$400-million of losses and the net current assets are lower than the net current liabilities. How do you intend to pay for the current liabilities?
Ken Wu (CFO and executive director): The auditors have not qualified the accounts.
As for your question on paying off the liabilities, if you look at Note 2.1 in the annual report, “the directors have reviewed the Group’s bank loans and banking facilities available to the Group and are of the view that certain of these bank loans and banking facilities will be extended and/or renewed…..” So the directors are of the view that we will be able to fulfill the company’s responsibilities.
Q: You have announced a plan to do a rights issue at 26 cents a share. With the current stock price being around 24 cents, will you be able to carry out the rights issue?
Ken: Currently we don’t plan to hold back the rights issue but the board of directors is looking closely at the market situation and will change our plan if necessary.
Q: In that case, do you have the timing for the rights issue?
Ken: We have not announced it yet.
Q: Are the prospects of Anwell’s business good? If no good, why not wind up the company?
Frankie: Management has great confidence in the future of the business. All businesses have good and bad times – there is no reason to wind up the company when we see that the sun is going to rise in the next hour.
Q: I believe there is a bright future for solar but will you divest a segment that’s not doing well – for example, optical media?
Frankie: I don’t think the future of optical discs is dark – we are just in a transition period in the industry. We are not going to give up particularly when this business is delivering positive cashflow and positive gross profit. Don’t worry – we have a management team focused on the optical media business and another team focusing on solar. Therefore, there is no energy diverted from developing our solar business.
Q: Is your current solar production for an existing customer or for new business?
Frankie: We announced a big contract last time. That is just one of our customers – we cannot put all our eggs in one basket.
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