In order to explore the upper end of the LCT (liquid-crystal television) industrial supply chain, the company plans to establish Konka LCM Co., Ltd. (tentative name) as a subsidiary to specifically invest in an LCM (liquid-crystal module) project with registered capital of RMB 350 mln. The company hopes to gain competitive strength in the LCT industry and increase profitability at its LCT business. RMB 886 mln will be invested in fixed assets for the project and the establishment of eight LCM production lines.

Sales of LCTs are expected to surpass 3 mln units in 2010 and modules produced by the new subsidiary will solely benefit the company. The company expects that it will realize an annual net profit of RMB 370 mln from the LCM project upon its completion. It is surmised that through the production of its own LCMs, the company will better be able of controlling and reducing LCT production costs, which could generate a 10% cost savings.


Source: Securities Times

Date: 29 Aug 2008

CN01/RL/JL/BT/MM