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)
