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TCL raises more cash for LCDs

TCL Corp, the Chinese television and mobile phone maker, has raised 904.55 million yuan (US$133.02 million) through private placement to be invested in the production of liquid crystal display televisions.

TCL issued 350.6 million new shares at 2.58 yuan apiece to eight selected investors, including its Chairman Li Dongsheng, it said in a statement to the Shenzhen Stock Exchange yesterday.

The company had planned a share placement of 1.4 billion yuan in September to accelerate the expansion of LCD TV production. The rest of the investment will be replenished by the company's capital flows.

The company is to spend 742 million yuan making LCD TVs with screens of up to 42 inches and 654 million making TVs with screen sizes between 42 and 56 inches.

"The company's LCD television sales keep growing at a rapid rate, in line with the fast developing domestic LCD TV market. As the LCD sector is a shining spotlight in the company's business, expanding the production line is as good as cutting costs," said Wang Meng, an analyst from Guotai Jun'an Securities Co.

The company is aiming for eight LCD TV production assembly lines by the first quarter of next year, including two already established. Four will be completed this year and two will be added at the beginning of next year, it said.

Sales of LCD televisions around the world soared 233 percent to 4.18 million units last year. The television business contributed 22.9 billion yuan - 60 percent - to the company's revenue last year.

But analysts warned of risks as competition in the LCD production market increased.

TCL Corp jumped by the 10-percent daily cap to 4.07 yuan in Shenzhen yesterday, compared to an overall drop of 0.49 percent in the Shenzhen Composite Index.


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