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MANAGEMENT DISCUSSION AND ANALYSIS (continued)
Prospects (continued)

Also set to premiere at CES will be the Group’s new AVITA Consumer Laptops and Nexstgo
B2B/Commercial Laptops, with their official launch dates to be during the Group’s last
financial quarter of 2020. Apart from the constant enhancement and uprating of the AVITA
and Nexstgo laptop line-ups, the Group has also been examining for new markets to enter,
while concurrently continuing to strengthen its presence in existing markets. In fact, as
recently as October, the Group launched both AVITA and VAIO laptops in the Middle East
markets and is also pursuing distributors in Pakistan, Bangladesh and Australia. Besides
market expansion, owing to the Group’s growing expertise and reputation in the notebook
PC industry, it has been approached by brand-name laptop companies to co-develop as
well as to produce on ODM/OEM basis laptops for general consumers as well as laptops for
gaming applications.

In view of the likelihood that the adverse trading environment will last for a while into the
future, the Group will constantly review to find ways to reduce its overall fixed costs and
restructure its organization if necessary. Furthermore, resources allocated to the various
markets for the Group’s notebook PC business will also be constantly reviewed and re-
allocated, with the majority of the investments going to the most promising markets.

With the on-going trade war between China and the US, un-resolved Brexit timetable,
seesawing diplomatic relations between North Korea and the US, as well as threats of
potential tariffs to be imposed by the United States on imports of European cars and parts,
many companies around the world and especially manufacturers based in China are battling
some of the strongest headwinds they have ever seen in decades. In particular, many China
based manufacturers is also faced with the imminent challenge of a 15% tariff that is to be
imposed on the 15th of December, if no full or even partial agreement is to be reached
between China and the USA from now to then. Under such circumstance, even though the
Group’s management is convinced that the current business and operational reforms are in
the right direction, but conditions going forward are indeed very difficult to predict so the
Group will need to always be ready to adjust its operations and products strategies as the
trading environment evolves.

24 ALCO HOLDINGS LIMITED Interim Report 2019