not so risky

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    • Thu Aug 7th 12:13 PM
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      Commented on:
      China Digital TV Issues Guidance 'Disaster'
      This author seems to be following the tape instead of reading up on the company. Conf call mentioned 2 years of high growth even if they didn't add any new customers or get revenue from new initiatives. ASP is going down, but they have gross margin 79.8% and are gaining market share on competitors with much lower prices, pushing some out of business. The market for smart cards is only finite until they sell new ones. It is about a 5 year cycle, but considering China has about 5 times more people than the US, the market is huge.
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    • Tue Jul 8th 15:55 PM
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      Commented on:
      China Digital TV: Red Flag Warning?
      1) Why would the Chinese govt "play hardball" with a company that is a leader in an industry they are pushing ahead and to whom the govt just awarded a contract in the mobile area last week? China Digital will bring themselves into compliance. The govt has no reason to try to hurt them and set back an industry they are subsidizing.

      2) Some of their competition has been going out of business even with lower prices, while they have maintained high gross margin and gained market share.

      3) Although you never like accounting issues, we are not talking about being investigated or anything. The company is new to US accounting rules and is taking steps to improve its internal controls to better enable it to catch any material errors in the audit process.

      4) The stock price is so low that it seems to price almost complete failure in. This seems way too pessimistic, and as with overly optimistic bubbles, overly pessimistic bubbles burst and send a stock shooting up if the worst case scenario doesn't play out, which can happen, but rarely does.
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