As the SCMP article states, China announced the investigation into "dumping" in 2Q with the anticipation of a tariff increase a given considering all things AUS-CHINA right now, and as such it was already baked into expectations; so this isn't anything new and should come as no surprise. China is pretty transparent with a lot of its signals and this one was clearly flagged. It should not spook any fundamentally-driven investors in DW8 though as outlined by several prior posts.
It's good to remember that the company is not an Australian wine producer like TWE impacted by these tariffs, rather a trading + logistics platform which takes a clip on the business processed. If that business was solely focused on shipping Australian wine to China (subject to tariff uncertainty and relative price pressures vs. other wine-producing countries in/out of favor with those setting China's import tariffs) then that would have implications, but since that a) isn't our current or intended business and b) China is not expected to be
a part of DW8's business in the very near future, the impact is negligible at best when applying whatever valuation methodology one favors to derive the PV at this point in time.
The business model is not limited to Australian wine producers utilizing the platform, but open architecture. The more the business can attract producers from other regions to its platform/expand into other markets, the more its business risk will be diversified and the more attractive it becomes in the China space as a singular access channel rather than having to deal with 20-30 regional importers individually, which as plenty of AUS producers have already noted is a key attraction. When the time comes to venture in to China with a diversified product offering, who cares if one of the countries on the platform is facing tariffs when other products on the platform do not?! DW8 will still earn a clip regardless if it's from a Kiwi, US, or Italian wine being sold and shipped using the firm's infrastructure. Hence the LT potential the business may offer to clients and investors alike. (People don't use AMZN cause it sells only one country's products....)
@tonyzhang and others that are waiting for big dips or a substantial discount to build a position: I very much understand and appreciate the desire to acquire assets at low prices, but timing purchases (and sales) perfectly isn't always as straight forward as one believes. There's plenty of empirical evidence out there on this topic. Hubris in investing can be a real b**** and asset prices sometimes move rapidly and without much notice. Entry/exit prices are obviously more important the narrower one's expected return range and investment time horizon are, that's why I seek to identify opportunities that offer more outsized returned potential and lower downside risk. That's the reason I am a holder in DW8 as the downside relative to my forecasted upside under conservative assumptions made this an asymmetric trade when I entered the position. Yes, the price has risen since then, but factoring in developments so far (e.g. business model buildout, proof of concept, growing sales and client base, changing financial situation, demonstrated execution evidence of mgmt, etc.), my intrinsic value assumption has adjusted along the way. Not trying to convince you to buy at whatever the price is, rather suggest taking a step back and figuring out what your bigger picture and assumptions are to warrant where one's focus is placed offers indeed the biggest bang for a buck. IMHO the 12-month upside makes the current price still appear "rather reasonable", and I am purposely not using the term cheap relative to my cost basis. (This is not financial advice, simply another perspective.) GLTAH, DYOR.
(20min delay)