I saw this report from Leather International Website confirming the continuous weakness of raw hide prices. This is bad for leather industry but GOOD for Man Wah since leather comprises about 50% of Cost of Goods Sold. APLF and theSauerReport to address hide market issues Published: 26 March, 2009 According to Ron Sauer the leather industry is facing a chronic over-supply of raw materials, which may have a dangerous impact on the market. The situation is likely to get worse - certainly in the near future and is also likely in the medium to longer term. The hide market crash is a ripple effect caused by the global economic crisis: plummeting sales in the automobile and household furniture sectors, both big leather consumers, caused a radical decline in demand for animal skins. A similar trend has followed in other leather articles like apparel, small leathergoods and footwear according to the press release issued by organisers of the APLF. This primary cause of the problem today is disparity in supply and demand. Hides and skins are available in only very slightly lower numbers but demand for leather may be down as much as 30-40% over all. \"The leather industry has no control over the supply of its raw material. As long as there is a demand for meat - and there is, in spite of the crisis, hides and skins, a byproduct, are produced in hundreds of thousands, every day\", says Ron Sauer, founder of theSauerReport. Cattle hides, which are the source of 70% of global leather production, have lost about 50% of their value since October 2008. Tanners saw their orders reduced tremendously by the reduced demand for the final products. Businesses now are trying to survive in midst of chaos. Orders were cancelled or renegotiated at much lower prices, shipments and payments were delayed, factories closed, workers made jobless, essential credits cancelled and reduced. See full report here:
www.leathermag.com/news/fullstory.php/ai...e_market_issues.html
The Company cannot pay a price higher than the \"Maximum Price\" which is defined as 5% above the average closing market price over 5 trading days before the day of purchase.
Looking at the trading pattern over the last 5 days, it is obvious to me that someone (other than the company) is accumulating Man Wah shares. Date Open High Low Close Volume 30 Mar 2009 0.155 0.155 0.150 0.150 2,250,000 27 Mar 2009 0.150 0.155 0.150 0.150 1,760,000 26 Mar 2009 0.155 0.160 0.150 0.150 1,298,000 25 Mar 2009 0.150 0.155 0.150 0.150 888,000 24 Mar 2009 0.150 0.155 0.150 0.150 940,000 23 Mar 2009 - - - - 0 20 Mar 2009 0.130 0.130 0.130 0.130 400,000
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