Share price below pre IPO. Long way to 40c. Will be interesting to see if the Chairman holds the line.
All the meat in profits is from the clients shipping their goods to Australia, which the Lau's handle. I think the IPO exercise was so they did not have to compete with new companies, such as China Sea Rates and Temando and various other 3pl offers.
If I was a Myer shareholder I also would have the shits, nobody is running an eye over the invoices from the Laus on their import costs. With their standing now they are a protected species.
6% of revenue is derived from IT - e-commerce. Yet the purchase of Amblique took 20% of the capital. Amblique is a good business even though the owner admits they nearly went broke in 2013, but they are not China savvy. Most of their solutions seem cloud based, which is no good in China.
So after purchasing Amblique what will be the extra $$$$ to get the systems China compliant. That is if they can? I have mentioned the compliance issues in China with websites.
That's on top of all the other functions like payment portals and courier systems.
Nobody wants to raise this sort of coin to have a spot on Tmall.
I love how John Lau in the interview I posted says - we are very big in social media in China. What social media? Everyone will rush in and say QQ msn etc, but these are exclusive social media. That is you form a social media group like QQ and invite friends. There is no advertising on them.
Even if there was advertising Chinese people are the most immune to advertising in the world. I have never seen a society that will advertise anywhere and anyhow.
Then there is brand licensing. Myer may have the rights to a lable like VanHeusen in Australia, but do they have the right to handle this lable in China? Imagine if a Chinese company started an e-commerce website in Australia distributing VanHeusen?
I am sure Myer would be real happy about that!
It is physically to hard to push all this uphill. The Lau's will eventually say we tried our best and let ecargo go, this will not happen until they have sucked every last drop out of their shipping and logistics enterprise with the customers of ecargo.
ECG Price at posting:
24.0¢ Sentiment: None Disclosure: Not Held
