king louie and others., page-11

re: austin group - sars effect Not only is SARS a deadly and frightening disease, but it also changes the way business is done in the affected countries. A three-day business trip to Hong Kong can become a twenty-three day trip with a ten-day quarantine when arriving and another ten-day quarantine upon return. Add to this the psychological effect of potentially risking your life and it’s not surprising many people are choosing not to travel.
OK, so how does this affect Austin?
Austin designs clothing in Geelong Australia and sends the specifications electronically to its China and Hong Kong based staff. There are 20 employees in Shanghai, 4 in Dong Guam, 1 in Beijing and 2 in Hong Kong. The garments are made by one of Austin’s 100 suppliers and the shipment is given a certificate to guarantee quality before being sent to Australia or New Zealand. Note that no travelling is needed because Austin’s Asian staff are permanently based in China or Hong Kong.
Right, so what’s the potential for growth?
Before the SARS outbreak, Austin was getting inquiries from other Australian clothing importers wanting to buy the services of their supply chain network. Austin identified this as a future big growth opportunity and now with SARS I think buyers will be beating a path to their door. Buying Austin’s supply services will not only solve the need to source product but now buyers will also avoid travelling to a potentially dangerous location.
Although SARS is a tragic disease for the people affected, I think there could be great benefit for Austin. I hold lots of these so I might be bias or even completely wrong. Don’t make any investment decisions based on this post. I’d be interested to know what others think, particularly anything negative.

Cheers, Tim.