Combined entity to be listed on Nasdaq as firm seeks to lift DVD player output
Starlight International Holdings, a Hong Kong-listed consumer electronic products maker, plans to merge its retail subsidiaries Cosmo Communications Corp and recently bought Singing Machine Co (SMC) and sell shares in the combined company on the Nasdaq Stock Market at the end of next year.
Starlight shares dropped 13.9 per cent to HK$1.05 on July 25 when it postponed earlier plans to raise US$20 million from a Nasdaq listing for Cosmo. The company bought SMC in June.
'Canada-based Cosmo will take care of our six to seven large merchandise retailers such as Wal-Mart and Target Corp, and the United States-based SMC will mainly serve the small and medium-sized merchandisers like JC Penney and Costco Wholesale Corp,' said Philip Lau Sak-hong, Starlight's chairman and managing director.
The restructuring comes as the company prepares to boost growth with the production of high-definition DVD machines next year. It plans to make players that will be compatible with one of either the Toshiba HD-DVD format or Sony Corp's Blu-ray format, both of which were launched in July.
Starlight, which is targeting making 500,000 units of DVD players next year, will decide on which format to back after gauging consumer preferences.
The proportion of DVD users using high-definition players will jump to between 30 per cent and 40 per cent within five years from the present 5 per cent, even though the machines will have an average retail price of US$129, compared with US$39 for a traditional DVD machine, Mr Lau said.