While China's plasma TV market is shrinking, Sichuan based TV making giant Changhong has ventured to stake CNY1.9 billion to produce plasma televisions.
According to one of the company's announcements, Changhong plans to issue no more than CNY400 million A shares to raise about CNY2.8 million and spend about CNY1.904 of that to acquire 75% of the stake of Sterope Investments B.V.
By seizing part of Sterope, Changhong will then hold the shares of South Korea's Orion PDP, which is the only Multi-PDP manufacturer in the world and has about 67 patent applications, 193 invention patents, 47 new and applicable patents and a dedicated development team as well as an extensive marketing network.
After the acquisition, Changhong will become the first Chinese television maker with the capacity of producing plasma screens. However, the company's move has raised a lot of concern from the industry and many professionals worry that the risk is too big for Changhong as the price of plasma TV continues dropping. Electrical appliance expert Lu Renbo believes that Changhong's real risk lies in whether it can produce plasma screens in large quantities in 2008.
Sterope Investments BV is the owner of South Korean plasma panel maker Orion PDP.