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This depends on how management manage the risk. Surely every business will have its own challenge. Who knows they can secure more big brands. Don't only look at the challenge, look at the opportunities too
Fool, do you know wat happen to the furniture industry in Vietnam? Their profit almost collapse due to competition from China investment. Now the same thing is happening to Garments. China is going into Vietnam and cut prices to entice large manufacturers like Nike and bid up labour and raw materials cost. The last quarter profit fell 20 percent because Vietnamese production factors are getting more expensive due to scarcity.
I also remind you Nike can switch suppliers very fast. Cambodia has replaced Thailand, and Vietnam has replaced China as supplier to Nike. In just 2 years time. You think Nike can't do the same to Magni Tech?
garment manufacturing in vietnam is matured enough that all the supply chain is properly set up, be it trading of raw materials or spare parts for machines. These facilities are not build in just a blink of the eye. it cost time and money to move your supply chain. Not to mention the human capital that vietnam has, in general hardworking and skillful.
Bro GL, Eclat QR very bad.. you see the share price, August sale drop, share price drop around 18% from top to bottom. Now from top to YTD price drop around 9% …
Magni haven’t announce nx Q result. Share price already adjust after the announcement of lock down at Vietnam.
I agree nx Q is bad. ( I think all the shareholder and ppl here also can make a same conclusion)
But the problem is short term of long term ? Just like glove sector , market start adjust share price last year, but QR report extremely good until recently..
Market adjust Magni bad result already after the announcementNx .
when QR come out, if something out of unexpectation, then share price adjust again.
If covid make the result drop, share price drop, Im happy, because this is temporary problem.
And some investor still too focus to use covid to predict the result and share price movement …
Then they will see very Un logic, some company growth but share price no move, some lost share price no drop… unless Q to Q core earning or lost is huge , then share price will adjust again.
You can see most of the share price already adjust till PRE pandemic level even covid still cause some factory short down.. profit drop.
China businesses including Taiwan is gaining even more. If you check Nike's website, you will discover the top garment supplier by workforce is Shenzhou, a very big Chinese garment company.
The rest are smaller than Shenzhou but tied, they are Tai Wah, Nice Apparel, Nanyang. Magni Tech is around the 5th to 6th largest by workforce. All those competitors I mentioned are Chinese companies, Tai Wah is a Malaysian company. But they all have control over raw materials, unlike Magni Tech
GL, I’m really appreciate your comment. Can you give me the name of the competitor?
Cause yesterday you said China came in Vietnam, lower the price attract Nike.
Today you ask me why… you give me the name.. I do a fact find, then only I can find out the real problem …
Thanks
Fool, I do not know who is getting the orders. But based on Nike's annual report, the top 5 garment suppliers to Nike inc are getting more and more market share each year. But I believe it is actually the top 3 who are getting the orders.
In the same period, China's market share to Nike drop from almost 30% to only 20%, Vietnam's market share went from 20% to 30%. I believe this is because China manufacturers are migrating factories to Vietnam.... continue above, I edit comment above
Ya. Thanks for edit bro GL… China government long time ago already want to move up the level of their manufacturing sector .. to avoid meddle income trap…
The top 5 contribute 50% of Nike’s garment production..
Magni very small compare to them, but still manage the growth.
My forecast last time is Magni will have single digits growth in sales due to the industry’s natural.
But Magni stil can perform double digit in ROE, ROA , gross margin … consider very good for this kind of company.
But something change for Nike.now they can use technology and data to growth doubled digit for top line, which I think is good for Magni too.
