OTI

[robbo]

Yes, well let us see whether I can achieve anything meaningful now.
Couple of Very Meaningful and bordering on being even mildly positive points DID emerge from the meeting which might be illuminating and therefore worthy of perhaps being drawn to OTI followers attention:
Without further ado, these points are as follows:
(1)--From talking to three of the directors and chairman, I got the distinct impression that this debt facility, will be off the Balance Sheet, or at least restructured very favourably within eight to twelve months. More information. Hmmm...??? Watch this space.
(2)Director Corrigan(CEO of Patrick and co-owner of Virgin and numerous other high profile public entities); was asked by yours truly, "Chris why does a very busy executive, like yourself, need to be involved with a relative minnow like Oriental Batteries/Tech??
My memory of Corrigan's Answer was along the lines of : "I know Lawrence Xin from way back, and when asked to come onto the Board, and knowing Lawrences's reputation for good executuve management, credibility and reliable transparency and delivering...well that was enough for me."
(3) Probably, my biggest Plus, note the capital P, was my summing up of this mgt team.
(4)OTI has a real and tangible set of advantages over their competition. Related to this, the high metal prices actually are providing OTI with an opportunity, more than a problem in some ways. Will get onto these topics in next posting.
cheers,
davidrob....Robbo

[robbo]

Yes...we seem to back online now.
Summarizing OTI's advantages over their competition and the opportunity this brings in this time of unprecedented HIGH lead prices.
(1) OTI have a clear Technological advantage in manufacturing Large powerful car batteries, which are being demanded more and more by leading auto maker/manufacturers--such as Hyundai and Mercedes Benz, due to the introduction of Sat-Nav, DVD, Parktronic, and numerous other electrically based configuration on todays's mopdern motor cars. The R&D Team, is very much World's Best--incidentally headed up by an Aussie Engineer with a world leading reputation in this arena.
(2) This is coupled with OTI's Obsession, with running the lowest cost base--in terms of efficiency and cost per unit in the world. Dimebag,thought you'd like this point, re. world's lowest cost base--combined with technolically leading battery manufacturer--(see note below re. Tech aspect.....-- Dimebag(you've been a mean old miser, re cost control... from way back... looking at some of your postings from around the traps!!).
(3)Battery manufacture is ironically low tech--but IMPORTANTLY; HIGH HIGH--Know how about the nuances and manufacturing quirks and risks in the battery component manufacturing game. One of the numerous examples discussed to illustrate this, was the hundreds of thousands of $$$$$ you can lose; if you keep the batteries stored in the wrong humidity, temperature, or at the wrong angle. Whole large Batch can be rendered absolutely write-offable and useless and only good for destruction, if you make any technical mistake. THIS, strangely enough, is the trick in the Battery manufacture game!!
(4)Smaller players, often run by operational owner/factory workers--WILL be rationalized OUT of this INDUSTRY.
(5) Co's like OTI will and are getting this market share
(6) One of the correspondents to this thread, wondered about whether OTI had been subject to a due diligence on its opertions. Other way around.OTI did the due diligence on the company concerned. Did not at the time proceed. Could not agree on Price. These Guys Drive a very very Hard and tough Bargain, and REFUSE to concede on PRice. Categorically and emphatically. Picked up very strongly, that these guys are very shrewd, tough number crunchers, with clear numerical margin benchmarks,clear targets,they are keenly price conscious, cost conscious accounting MEAN and scrupulous to a fault with tight rein over every single penny. They do jknow how to say NO. They have re-negotiated prices with customers in their favour as a result of high metal prices. They do drive down costs. The meeting Hall for AGM was very very AUSTERE!!Very humble. No pretensions with Oriental Technology. I would have been arested if I had have gone for a third piece of cake. I did manage snaffle it down quickly all the same, but IT WAS TOUGH!!--Feel for me here guys. Come on. Empathazie!!
Just a small 3 star Hotel Room--with two packets of Arnott Biscuits. Make your own coffee or tea mate!! No trimmings AT ALL. No fairy floss at all. No B.S. Just down to business. Very impressed actually.....Will divide this posting onto another, so I don't go back into Dr Who's Time Machine.
cheers,
davidrob--Robbo

[robbo]

--continuation of OTI REPORT from attendance of AGM by Robbo!
(7)OTI is a seeker/potential Buyer of Bargain and strategically correct Battery manufacturers in distress to acquire.
(8)OTI will more than double Output and Revenue within 6-8 mths when new factory opens and comes on stream. This will flow onto Balance Sheet Very Quickly.
(9)--(OTI) is in discussions with Japanese/German/Korean/European-- Auto Manufacturers re. Hy-Brid Electrical Cell Cars and Hydrogen/Petrol-Hybrids.(read Toyota Prius and Honda variants...). OTI seems, as much as one can ascertain, to have a long term future in the power systems of cars into the future.
(10) In short, I found management very accessible, transparent, up-front about the dirty linen(The Debt Re-Structure--with CVIC etc)and the tough business conditions re. the Lead Prices which is VERY Tough in the Jungle of Battery manufacture, as Lead is the primary and most significant inout cost, and there is NO substiture whatsoever available, although progress is being made to REDUCE the Lead Component require in Car Batteries, but can never be eradicated or substituted with known technology at present.
Hope the above postings,.... were of some minute interest Sharetraders...let me know any other qstions and I will see if I can answer. Yes, I did get M.D's email(George Su) so we do have an in-road here, but I don't obviously want to abuse this privilege!!
Cheers,
davidrob (Robbo)

[redredwine]

Awesome post Rob, thanks. Have added to my watchlist. Was that your buy of 15k at .155 today?

[KD]

Yes ditto for me on Cantab's post - thanks 1) for effort to get to the meeting and 2) for indepth, humorous and fascinating posts above - Robbo you're a legend! I'll be away for next couple of days and will look forward to discussions that these posts will no doubt generate and put in my two cents worth then.

cheers all!

[KD]

We should all make an effort to get to the next meeting - each bring a plate

[clearasmud]

Very interesting post Robbo.This Co could be a big Lt winner for us sharetraders!

Disc hold 120,000 Oti

[clearasmud]

Its a suprise sharetraders are the majority of the buyers.

[robbo]

Glad, you found the posts informative guys. In answer to Cantab's question--were the price increases achieved, able to restore margins, to pre-"record high" lead prices. Answer: negative I'm afraid. Just was able to absorb partial loss of margin.
However, crucially...this was beter than OTI's competitors ability to pass on margins. Why and how so. Part of the answer lies in the political and economic influence of the Ma family in Hong-Kong China(akin to sort of Packer influence in political/ecomomic power,over here in Oz).
Patrick Ma is a large Investor and non-executive Director of OTI. His family own large casinos and the largest newspaper in Hong Kong and shopping centres, throughout Hong Kong and China.
Interestingly also has rights to importation of Saab and,I believe, Mercedes into China's prosperous Guangdong. Co-incidentally OTI have exclusive supplier relationships with these co's.
Don't forget that General Motors, now owns Saab....
Never underestimate power of connections and political influuence in economic outcomes in China. Also don't forget, that Hong-=Kong is NOW China--and that the Ma family is also very powerful in Taiwan.
Just another little morsel...there just might be a connection here in relation to the restructure/retiring of the CVIC (now in liquidation--oh gosh--what a shame..)and some of the matters I allude to here. Put it this way, if your doing biz in China--you won't beat em unless you join 'em.
DISCLAIMER: The above comments,naturally are expressed, totally without prejudice; and are the view only of the author, and may have no basis in fact, and do not and must not represent any finacial or any other type of advice whatsoever, and naturally everyone must make their own enquiries before embarking upon investment decision in Oriental Technologies.(OTI).

[Dimebag]

Hi Team

May I also convey my thanks to Davidrob for his insightful and entertaining comments.

It was me who took out the 15,000 yesterday. Thought I better up my stake to a more decent level before Cantab launched his takeover bid. [:P] Remarkably Mr Cantab now owns 0.365% of the company!! Impressive stuff.

I also bought another 11,000 this morning. When I think a company really has a lot of potential I simply can't be bothered quibbling over half a cent a share or so.

I'm in agreement with the sentiments elucidated above. OTI have a lot of potential and 2005 should be a pearler of a year.

Warren Buffett has often talked about how weak short term conditions and price wars (or margin erosion of any discription) assists the efficient and low-cost providers in the long-run. This is because the conditions weaken the weak players considerably, often to the breaking point. Pleasingly, OTI management seem to be cognisant of this and are looking to take full advantage of the situation, so hopefully they will be able to secure some very attractive acquisitions.

Davidrob: Dead right about the cost-advantage being an attractive feature. I believe Astron are doing so well because a well managed company with both a technological and cost edge is the perfect formula for success. It makes the company a sure winner.

Why? Because why would customers not buy? If the products are better and cheaper there isn't anything not to like. If OTI can (or have) replicated this situation, I am sure OTI will prove to be a great long-term success also.

As you say, operating in China, there is one reason customers might not buy. This is due, as you point out, to the importance of relationships in doing business in China. I was talking with a businessman who has owned and operated Chinese business interests for some time recently and he stressed this fact. But it looks as though OTI have this base covered also.

Looking to build a stake of up to 50,000 shares over the coming few months.

Thanks to everyone, and especially KD for identifying this promising young company.

Cheers
Dimebag