Thank you for the input! But I am sorry that in my opinion, it is not that simple.
On the surface it may sound conservative enough to take the whole Asia out.But in reality, it doesn't work that way. Depends on how long this China episode last. With China virtually not viable to do business, we are not able to shrink our business proportionally and instantly. i.e we still have to pay similar cost(maybe slightly reduce if any) to:lease/labor/depreciation/interest etc.etc. None of them can be reduced quickly, can they? With China being taken away, Asia will be a loss making business. And we will be lucky tosee the group profit stays green. Bear in mind, we have 1.7 billion long term debt to serve. We have over 1 billion inventory, if China doesn't come back soon enough, will there be impairment to these inventory? Remember who consume most of our premium products?
If it stays too long, the damage to the brand name may not be reversible. People switch to French brand for the high end?
In my opinion, the whole TWE story is about China. Without China, music stops, so it is a gamble (rather than investment/speculation) about how long this will last.
All in my opinion only! DYOR!
What is TWE Worth Ex-China?, page-6
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