Changhong: first Chinese TV manufacturer making plasma TV

Sichuan Changhong Electric Co.<600839>, a Sichuan-based TV manufacturer, has invested RMB 1.9 billion to produce plasma TVs, amid concerns of a shrinking plasma TV market in China.

In an announcement, the TV manufacturing giant said it has intentions to issue no more than RMB 400 million A shares to raise about RMB 2.8 million. Of which RMB 1.904 million will be used to acquire a 75% stake of Sterope Investments B.V.

Media reports that this 75% stake in Sterope will give Changhong control over shares to South Korea’s Orion PDP. This bodes well for Changhong, as Orion PDP is the world's only Multi-PDP manufacturer and claims about 67 patent applications, 193 invention patens, 47 new and applicable patents, as well as a dedicated development team and an extensive marketing network, media reported.

Additionally, the acquisition will also make Changhong the first Chinese TV manufacturer with the ability to produce plasma screens.

However, industry experts share their concern as they consider the risk of this action. Media reported some experts as saying that the risk may be too big for Changhong as the price of plasma TVs continue to fall, while others define the real risk as to whether the company can even produce plasma screens in large quantities in 2008.

Sichuan Changhong Electric Co., Ltd. manufactures and sells TVs, air conditioners, mobile phones, refrigerators and other household electrical appliances.