The writer is with Aries Consulting in Hong Kong and can be contacted at This email address is being protected from spambots. You need JavaScript enabled to view it.

Image
Karrie management (in white T-shirts) chat with an investor on stage.

ONCE A year, individual investors of Karrie International get a chance to have tea with the management at a hotel.


There is a fee to pay - a minimum of HK$50 by cheque payable to
The Community Chest of Hong Kong at the point of filling an application form for attending the tea session.

Karrie says it
adheres to the principles of “openness, fairness and equality” and believes that all investors (large or small) should have the
Image
Karrie shareholders at a tea session.
same right to get access to the Company’s information.


This is one of the investor-friendly ways that
Hong Kong-listed Karrie International Holdings Limited (1050 HK) earned recognition for a high level of corporate governance.

It was awarded the "Citation for Achievement in Corporate Governance Disclosure" in the 2008 Best Annual Reports award given by the Hong Kong Management Association.

In 2007, Karrie received a honorable mention in "Grand Prix for Hong Kong Best Overall Investor Relationships - Small to Mid Cap". It was the winner of "Best Annual Report and other Corporate Literature" in a IR Magazine 2007 Poll.

That’s why we were attracted us to visit this Company recently. Mr Lee Shu Ki, its Executive Director, and Ms Winnie Tsang, Senior Corporate Communication Officer, met us in their Tsuen Wan office.

28 years of growth

Mr Ho C.F, the Chairman, started Karrie with his wife, producing video-cassette housings for a German customer in 1980. After more than 28 years of growth and diversification into other businesses, The Karrie Group (HKEx Stock Code: 1050) is now one of the leading personal computer and server casing manufacturers in the world.

Its computer and office automation products include point of sale (POS) systems, magnetic tape drives, laser printers, multi-functional facsimile machines, paper cassettes and paper feeding mechanisms for photocopiers.

The majority of Karrie’s products are produced on an OEM basis for some of the biggest names in their ndustries. In additional, with their research and design capabilities, the Company designs its own computer and server casings.

Key products

Karrie’s products can be broadly classified as:

Computer Peripherals since 1988. They also provide turnkey services to customer for PC and server systems assembly;

Kiosk Systems since 1997. The Group has developed several new kiosks in partnership like Multi-Ticket Betting Terminal, Digital Photo development Kiosk, Airline Check-in Kiosk, Hotel Check-In Kiosk, Multi-media Informational Kiosk, Bus Terminal Ticket Kiosk.

Office Automation since 1996. Karrie has extensive experience in manufacturing Laser Beam Printer and Copier option devices.Point-Of-Sales since 2001. Cashier Terminal for Retail Systems (POS) is a key growth area for Karrie moving forward.  
Image
Source: Karrie

Company Philosophy – The Three Equilibriums

Karrie adopted a three equilibriums” policy, which enabled the company to grow despite mounting industry challenges and global uncertainties.

The First Equilibrium: “Risk of Investing” vs “Risk of Not Investing” 

Customers have become more demanding, so projects or investments made by Karrie have to keep up with such demands. Most of Karrie’s partners are leading international corporations which require suppliers to have state-of-the art plants and production facilities. Risk of Investing: Karrie never underestimates the risks of over-investment.

Increases in operating expenses will have an impact on the company’s profit and there is no guarantee that sales will increase.
 In its 2007/2008 annual report and latest results presentation, the Company gave a detailed breakdown of its capex plans versus Group turnover and profitability.

The Second Equilibrium: Dividend vs Capex and Working Capital Requirements

The Group has paid over HK$552,108,000 in cash dividend in all since 2000/01, amounting to 99.2% of shareholders’ fund. With the current economic environment ridden with uncertainty, the company revised its dividend policy to align with a new capex cycle. The company does not rely solely on bank borrowings to fund its financial needs but has to maintain greater financial flexibility to prepare for the next stage of growth.

Going Forward

Karrie has acquired land for factory expansion in Guangdong. Facilties in Phase 2 of the 240,000-sq m Yu Quan Plant will be gradually completed, and will increase the Group’s overall production capacity by approximately 35%.

Karrie is also building a facility in Yixing to cater to the growing demand for its kiosk production services. When completed, Yixing will be approximately 320,000 sq metres.
 

Karrie established a joint venture with Sagem Communications SAS in March 2008 and expected that the EMS Business turnover will increase gradually. It looks like the plans are in place and Karrie is prepared to ride through the tough times and emerge a stronger company.

You may also be interested in:

  • http://www.nextinsight.biz/images/stories/HongKongmisc/140karrie_sklee.jpg KARRIE: Moving up the value chain, migrating down the production stream

    Share Prices

    Counter NameLastChange
    AEM Holdings4.180-0.070
    Avarga0.285-0.010
    Avi-Tech Electronics0.395-
    BH Global0.260-
    China Sunsine0.490-0.010
    Food Empire0.760-0.010
    Fortress Minerals0.365-0.025
    Golden Energy0.290-0.015
    GSS Energy0.073-0.004
    InnoTek0.810-0.015
    ISDN Holdings0.645-0.030
    ISOTeam0.115-0.003
    IX Biopharma0.225-
    KSH Holdings0.350-
    Leader Env0.079-
    Medtecs Intl0.370-0.055
    Moya Asia0.065-0.001
    Nordic Group0.355-
    Oxley Holdings0.200-0.010
    Procurri0.305-
    REX International0.189-0.010
    Riverstone1.000-0.130
    Roxy-Pacific0.4700.065
    Southern Alliance Mining0.960-0.030
    Sri Trang Agro1.340-0.050
    Straco Corp.0.4750.005
    Sunpower Group0.625-0.010
    The Trendlines0.100-0.002
    UG Healthcare0.345-0.060
    Uni-Asia Group1.050-0.050
    Wilmar Intl4.080-0.030
    Yangzijiang Shipbldg1.440-0.040
    Yinda Infocomm0.215-0.005

    NextInsight RSS

    rss_2 NextInsight - Latest News

    Online Now

    We have 1144 guests and no members online