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Gauging Bonso Electronics’ Risk Factors

Bonso Electronics (BNSO) provides sensor-based products, including electronic scales, weighing instruments, and pet electronic products. It manufactures its products in China, and caters primarily to customers in North America and Europe.

Let’s take a look at Bonso’s recent financials, as well as what has changed in its key risk factors that investors should know.

In Fiscal Year 2021, ended March 31, the company’s revenue jumped 19% year-over-year to $15.6 million. The top-line growth came primarily from higher pet electronic product sales, and the company plans to continue to invest and develop new models of pet electronic products and electronic scales.

In light of the impact of the COVID-19 pandemic and trade tension between the U.S. and China, Bonso is also focusing on cost reduction and the development of new products to stay competitive.

CEO Andrew So remarked on the redevelopment of the company’s Shenzhen factory, “Although the approval process for the redevelopment of our Shenzhen factory site has been temporarily suspended, we are moving forward as best we can and our development partner, Fangda, anticipates that they will complete the approval process for redevelopment in 2022.

“Following approval, the redevelopment of the Shenzhen factory site will begin.”

Net income per share increased to $0.34 from $0.08 a year ago. (See Bonso Electronics stock charts on TipRanks)

Risk Factors

According to the new TipRanks Risk Factors tool, Bonso’s main risk category is Finance & Corporate, accounting for 33% of the total 49 risks identified. In August, the company added two key risk factors under the Macro & Political risk category.

First, Bonso noted it faces risks arising from the COVID-19 pandemic and other local and global public health emergencies, natural disasters, and other catastrophic events. Such events could adversely impact the economy and the business of Bonso’s customers and suppliers.

A resurgence of COVID-19 in China could negatively impact Bonso, and the impact of the pandemic in countries where Bonso’s customers are located could impact its business (the U.S. accounts for around 62% of Bonso’s revenue).  

Second, changes in international trade or investment policies and barriers to trade or investment could adversely impact Bonso’s business and expansion plans. This may also lead to the delisting of Bonso shares from the U.S. markets, or other restrictions on investing in the company’s stock.

Compared to a sector average Macro & Political risk factor of 15.7%, Bonso’s is at 16.3%. Shares are down 42.9% over the past six months.

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