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08-05-2016, 08:26 PM
I think that the tie-up with Droege Group has added value for Dutech with a much greater presence in Europe. Revenue from Europe has increased from RMB 77m in 2010 to RMB 485m in 2015. In the same time frame, revenue from Europe has increased from 21% to 41% of the total revenue for Dutech on a geographical basis. Currently, Droege Group holds 2 out of the 7 board seats that Dutech has.
In addition, since the merger with Format (which was a subsidiary under Droege Group), they have mainly acquired European companies (i.e. DTMT and Krauth). Given Droege Group's status as a family-owned investment company with over 25 years of corporate value-enhancing experience in Europe, it seems plausible that Droege Group's connections have given access for Dutech to acquire these companies (on the cheap).
This ties in with the value enhancement strategies which Droege Group has identified for Dutech in the link below, i.e. targeted acquisitions and increasing depth of value-addition and product range with the diversification of product range to include higher value-adding intelligent terminals.
http://www.droege-group.com/en/what-we-d...io/dutech/
Thus far, revenue has increased across the board in the major markets which Dutech is currently operating in. It will be interesting to see whether the synergies with the subsequent acquistions will translate to future growth in earnings for Dutech (similar to the case with Format) or that they will result in diworsification with higher recurring costs and corresponding fall in profit. Of course, as a shareholder, I hope more for the former.
In addition, since the merger with Format (which was a subsidiary under Droege Group), they have mainly acquired European companies (i.e. DTMT and Krauth). Given Droege Group's status as a family-owned investment company with over 25 years of corporate value-enhancing experience in Europe, it seems plausible that Droege Group's connections have given access for Dutech to acquire these companies (on the cheap).
This ties in with the value enhancement strategies which Droege Group has identified for Dutech in the link below, i.e. targeted acquisitions and increasing depth of value-addition and product range with the diversification of product range to include higher value-adding intelligent terminals.
http://www.droege-group.com/en/what-we-d...io/dutech/
Thus far, revenue has increased across the board in the major markets which Dutech is currently operating in. It will be interesting to see whether the synergies with the subsequent acquistions will translate to future growth in earnings for Dutech (similar to the case with Format) or that they will result in diworsification with higher recurring costs and corresponding fall in profit. Of course, as a shareholder, I hope more for the former.