Bitcoin - Cfp Recommendation to Ceo

Topic: Bitcoin – CFO recommendation to CEO, Wong's International Holdings Limited

Company Background: Wong's International Holdings Limited (Wong’s) is a Hong Kong listed company (HKEX:0099). Headquartered in Hong Kong, Wong’s principal activities comprise electronic manufacturing services (EMS) and original design manufacturing service (ODM) of information and communication technology (ICT) products. Wong’s has manufacturing facilities and R&D office China. It also has Sales and Marketing offices in China, Japan, UK and US as well as sourcing offices in Japan, UK and US.

Recommendation: Firstly, Wong’s should not invest Bitcoin. Secondly, Wong’s should start to consider Bitcoin as one of the trading platforms for sale and sourcing in the future.  Finally, product line of graphic process unit (GPU) products should be invested and developed.

Content:

The reason of not considering Bitcoin for Wong’s investment is due to its highly volatile characteristic, and this is not in line with Wong’s investment strategy. Wong’s success is based on its conservative strategy, the investment of Wong’s is mainly on fixed asset e.g. equipment, factory, etc. When reviewing the Bitcoin, it ramped up from USD952 on 31Dec2016 to the maximum price of USD18737 on 20Dec2017, which is more than 18 times increasement. However, the price of Bitcoin drops to USD4007 at 1Dec2018, which is more than 78% of its value has been vanished. In addition, according to a summary on the interview with famous leaders around the world from Bloomberg#1, more than 40 out of 62 of those leaders look negative on Bitcoin. Leaders including Bill Gates, Warren Buffett, Jack Ma are all think that Bitcoin is a bubble which is not good for investment.

Wong’s should start to consider Bitcoin as one of the trading platforms for sale and sourcing in the future, since Bitcoin enables borderless, cheap and instantaneous transactions. Wong’s is using different currency for sale, purchasing and manufacturing around the world, this leads to a risk on the currency. In addition, the transaction cost and processing time for different currency also introduce issue for Wong’s. Using Bitcoin as the trading platform brings a lot of advantages, one of them is related to lager payment amount for sale or purchasing, it usually takes days to finish the transaction, but it could be instantaneously finished for Bitcoin transaction. Another advantage of Bitcoin is no currency risk, it has no boundary and currency control by any countries.  One thing should be reminded is that Wong’s should only use Bitcoin as the trading platform, those received Bitcoin should be traded to USD immediately. Keeping Bitcoin as asset or investment is not suggested due to its highly volatile characteristic.

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