Alset Ehome International Inc (AEI)AEI

Alset Ehome International Inc.: A Detailed Overview

Company Profile:

History and Background: Alset Ehome International Inc. (NASDAQ: AEI), incorporated in 2001, is a US-based holding company engaged in the design, development, production, and distribution of high-quality electronic products, including consumer electronics, computer peripherals, and LED displays. Originally established in Hong Kong, the company relocated its headquarters to Delaware in 2012.

Business Areas: Alset Ehome focuses on three primary business segments:

• LED Lighting & Displays (72% of revenue in 2022): This segment manufactures LED displays, billboards, and lighting solutions used in advertising, public transportation, stadiums, and buildings.
• Consumer Products (15.2% of revenue in 2022): This segment produces various consumer goods such as smartwatches, Bluetooth headsets, power banks, mobile phone accessories, and other smart electronic devices.
• Other Businesses (12.7% of revenue in 2022): This includes investments in real estate development and property holding as well as operating an industrial park in China.

Leadership:

• Chairman & CEO: Mr. Joseph Chau (Founding Member)
• **President and Director: **Ms. Maggie Chau
• CFO and Director : Mr. Ken Yung (Overseeing Financial and Accounting Operations, Investor Relations & Information Technology.)
• Board of Directors: Composed of seven members, including independent directors with financial, management, and legal expertise.

Corporate Structure: Alset Ehome operates through various subsidiaries in Hong Kong and China, each responsible for manufacturing specific product categories.

Top Products and Market Share:

Top Products:

• **LED displays: **Alset’s primary product offering, accounting for the largest revenue contributor. These include outdoor LED video walls, billboard screens, and indoor displays for commercial purposes.
• Consumer electronics: The company produces a variety of smart products like Bluetooth earphones, smart door locks, charging cables, etc., catering to the growing demand within the consumer electronics market
• LED Lighting: Indoor and outdoor LED lighting solutions for residential, commercial, industrial, and infrastructure applications.

Market Share:

• **LED Displays : ** Market share estimates are not readily available for Alset specifically. However, the overall global outdoor LED display market was valued at $34.38 billion in 2022 with projection for it to reach $73.9 billion by 2026, suggesting significant room for growth.
• **Consumer Electronics : ** The company operates within a highly dynamic and fragmented Consumer Electronics space, making precise market share analysis a challenge.

Competition:

• **LED Displays: **Competing brands in the LED display segment include Absen Inc. (ABS:SZ), Leyard Group (LEYD) and Unilumin Group Co, Ltd. (LUNA:SH).
• **Consumer Electronics ** Involves fierce competition with major established players like Apple (AAPL), Samsung (OTCMKTS: SSNLF ), Xiaomi (OTCMKTS: XIACY ), Huawei, Vivo, Oppo etc.

Total Addressable Market (TAM):

• **LED Display market: **The global outdoor Led advertisement displays market size reached USD 35.79 Billion in the year 2021, is projected to be a USD 62.23 Billion market by 2026, exhibiting a CAGR of 13.62 %. This suggests a sizable TAM for Alset to operate within and potentially grow.
• Consumer Electronics : This expansive global market has been steadily growing, reaching approximately $1.46 trillion in value as of March 2023.

This vast global TAM presents significant market opportunity for increased penetration, especially for a diverse producer like AEI.

Financial Performance :

Recent Financials: (Year ended Dec 31)

• Total Revenues :

•    2022 :   $447.45 Million
     *   2021 : $524.51 Million
  

• Net Income :

•    *  2022 :  $45.21 Million
  

  •   2021 :  $63.78   Million
    

  The revenue growth has fluctuated over the past five years. This could be attributed internal reorganizations and changes in management, but also external challenges like COVID 19 related supply chain disruptions affecting the industry as whole.

  Profitability:

  • Profit Margins
    **2022 : * Gross margin : 14.1 % -
    * operating margin: 8.6 % ** 2020: * Gross margin : 9.2 % - ** * operating margin: ** -31.3 %- (losses)

  EPS :
  2022 : $2.25 per share 2021: $3.31 per share

Financial Statement Analysis: The recent performance in 2020 experienced loses. In 2022 however it saw a revenue and income growth indicating some recovery. The EPS has also improved but remains fluctuating and volatile. Investors may find it beneficial to monitor the performance for stability, particularly over several quarters, before considering it an indicator of consistent and positive growth trajectory. It is essential to look beyond single years when analyzing financial health and performance overall.

Share Price Historical Data: (as of Nov 14 , 2023 )

• The Current Price: ** 13.48 ** USD per share
• 52 -week range : 6.83 USD - 23.69 USD
  **This suggests a volatile stock price. Investors with high tolerance for risk may benefit from careful research before considering investment, while those seeking more stability might choose to observe for longer time periods.

Potential Challenges and Opportunities

**Challenges : ** The LED display and electronics sectors are highly fragmented and susceptible to intense market competition and price fluctuations. Additional external pressures may include:

• Supply chain disruptions * Evolving technological landscapes and product life
• Potential economic slow down or recessions impact consumer buying power .

Opportunities :

 * Expanding the global footprint  through potential strategic mergers and acquisitions  of competitors or partners to gain market  share.

• Focusing and expanding on research + Development of cutting edge technological innovations, especially for smart and energy efficiency-related solutions
• Deeping penetration within its target consumer market through strategic marketing, sales and distribution initiatives

These opportunities, if addressed strategically , have the potential to drive further market penetration, gain greater customer loyalty and improve overall performance in the long run.

The company's financial health, competitive advantages, growth opportunities, and industry position must all be closely analyzed before making a judgment about whether its product is good or bad.