I've been sifting through prior annual reports and AGM presentations and unfortunately there is very little information provided by the company re. client geography/mix. One has to assume that China makes up a majority of the sales volume, but I couldn't find this documented anywhere. The only reference to client geography in the FY23 annual report was in the Chairman Address where they noted that "a portion of the quality issue is attributable to smaller pearl size rather than imperfections on the traditional grading scale, and these smaller but otherwise high-quality pearls have ready markets in both China and Japan".
In the FY21 AGM presentation, upon the release of the online platform, they noted that "the online platform proved to be highly successful with clients participating from all over the world including, Australia, New Zealand, Japan, China, the USA and Spain".
The FY22 AGM presentation gave some colour around the client mix, where they noted that the company has increased the number of active clients to 176 (from 140), sourced from 23 countries (from 15), with 53% of sales being derived the top 10 customers (down from 80% in the past). The company also reported that "reaching beyond our traditional markets and customer base has allowed us to showcase our pearls to new buyers and increase competition which has led to increased prices over the year". Unfortunately they didn't build upon this story in the FY23 releases.
No great insight, but I took away the following from the above:
1. Sales are likely coming from 20+ countries, not just China, and Japan was likely a major buyer this/last financial year (the auctions are held in Japan after all)
2. The company is working hard, with some success, to diversify to other geographies and away from traditional/existing clients, which is likely resulting in greater competition and higher prices (so the company is not purely a price taker and the company can to some extent influence ultimate prices i.e. master of its own destiny)
I really wish the company was more consistent with metrics reported and provided a breakdown of sales by geography, sales channel, and top 10/rest, however, I suspect that this information is likely being held close to chest for competition reasons.
If anyone has any additional insights to add, it would be much appreciated.
ATP Price at posting:
17.0¢ Sentiment: Buy Disclosure: Held
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