Jane Chen / Shanghai Daily news

One of China's leading television manufacturers, Sichuan Changhong Electric Appliance Co Ltd, will expand into the telecommunications and information technology sectors in an attempt to recover quickly from the negative impact of huge losses, director Zhao Yong announced yesterday in Mianyang city, Sichuan Province.
He was attending an investment summit for Mianyang's China Technology City project, the Beijing Times reported.
To carry out its expansion strategy, the world's No. 2 TV maker formally announced the establishment of two new units yesterday, and managed to sign 3.5-billion-yuan (US$423 million) in contracts with strategic investors.
One unit is Guohong Telecom Digital Group Co Ltd, which will be devoted to research and development, production, retail and the service of telecom terminals, networks and individual mobile products, the report said.  It is jointly launched by Sichuan Changhong's two subsidiaries in Guangdong and Jiangsu provinces, with a registered capital of 200 million yuan.  The parent company is investing 90 million yuan, and will hold 45 percent of the shares.
Market analysts regard this unit as indicative of Sichuan Changhong's ambitions in the mobile phone sector because the registered capital just meets the telecom authority's 200-million-yuan basic business threshold for handset manufacturers.
The other unit is the Chonghong Information Technology Co Ltd.  Mainly centered on third-generation technology (3G) it will be engaged in Asymmetric Digital Subscriber Line (ADSL) and video business in cooperation with China Telecom Corp.  It is hoping to become one of China's leading 3G operators within three to five years, planning to enter the Internet Protocol TV (IPTV) and media business.
On Saturday March 19, Sichuan Changhong issued a statement that it is expecting to post a 3.7 billion yuan loss for 2004. On the news, on Monday, March 21 the price of the Shanghai-listed group dropped 0.26 yuan, or 6.93 percent, to 3.49 an hour after the market started trading while the Shanghai Composite Index was up 4.87 points, or 0.40 percent, to 1,232.27.
Last December, after earmarking some US$330 million to cover debts owed by its U.S. distributor Apex Digital Inc. and from potential losses from bond trading entrusted to the scandal-hit brokerage China Southern Securities Co Ltd., the company warned it would post a loss for 2004.