The shares of SVA Group's listed subsidiaries surged dramatically yesterday as investors expected an announcement of a merger plan among China's top three LCD panel makers, including SVA Group.

 

SVA Electron Co, a Shanghai-listed subsidiary of SVA Group, surged its 10-percent daily cap to 8.64 yuan (US$1.13). Another subsidiary, SVA Information Industry Co, jumped 8.4 percent to 11.10 yuan, compared with the Shanghai Composite Index's 1.35-percent rise on the day.

 

SVA Group, Beijing-based BOE Technology and Jiangsu Province-based IVO are in negotiation to merge into a new company and invest in advanced LCD panel production lines. The merger plans to reduce costs and improve competitive ability. The new company will get government support through special policies, said Zhang Xiaoqiang, vice director of the National Development and Reform Commission.

 

The merger will help boost its market position against foreign rivals such as Samsung and Sharp, as well as help cut costs, according to the statement by SVA's listed firms and Shenzhen-listed BOE, which said the plan will be announced by Sunday.

 

"The domestic players have to upgrade production lines to catch up with global leaders, but neither of the three has the ability to afford an advanced line independently," said Zhang Bing, an analyst at DisplaySearch, a US-based IT consulting firm.

 

So the coming merger plan is a positive sign for all three, Zhang added. Both SVA and BOE declined to comment. SVA said a statement will be released "soon."

 

(Shanghai Daily September 28, 2007)