Amoi Electronics, a Chinese handset and home appliance maker, will probably be delisted next year as it is expected to continue losing money in 2008, the third year of losses, the Shanghai-listed firm said yesterday.
Chinese stock market regulations say any firm which has posted losses for three consecutive years will be delisted.
In the second half, Amoi has narrowed its loss but the company is still going to post a loss for 2008, as a "historic burden," the Xiamen-based firm said in a statement to the Shanghai Stock Exchange.
"The company is insolvent now and investors should pay attention to the risk," the company said in the statement.
Amoi jumped 4.73 percent to close at 1.55 yuan (22 US cents) while the Shanghai stock index surged 3.57 percent yesterday.
Amoi, which produces mobile phones and flat panel televisions, posted a loss of 811.12 million yuan in 2007.
Chinese television makers are lacking core technologies such as LCD (liquid crystal display) panel manufacturing. Therefore their profit margins are limited even though the sales of LCD televisions have surged in China, said Zhang Bing, an analyst with DisplaySearch, a US-based display research firm.
In the handset television sector, overseas giants like Nokia and Samsung cut prices to penetrate the entry-level and medium markets, which used to be controlled by Chinese makers, insiders said.
(Shanghai Daily December 9, 2008)
