Changhong Expects Loss, Blames Apex Digital - Twice

Changhong Expects Loss, Blames Apex Digital

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Beijing — Sichuan Changhong Electric Co., China’s leading manufacturer of color televisions, warned that it will show large losses in its forthcoming year-end report due, in part, to the alleged failure of Apex Digital to cover its accounts.

Changhong said in a statement that it is owed $467.5 million by Apex Digital, which is based in Ontario, Calif., and expects to recover only $150 million of the sum. Changhong said Apex’s sales of cathode ray televisions were hurt following a 25 percent anti-dumping duty placed on Chinese-made televisions by the U.S. government earlier in the year.

According to a spokesperson with Apex Digital, “There is in fact a pending business disagreement between Changhong and Apex Digital. This disagreement is being addressed through proper channels. I cannot confirm or deny that anti-dumping duties were a cause, since the anti-dumping litigation is ongoing. However, I can confirm that the anti-dumping issue “harmed business for Apex Digital in 2004.”

The anti-dumping measures followed a ruling by the U.S. International Trade Administration that artificially low-priced Chinese TV imports — from factories including Changhong’s — had hurt the ability of U.S. TV makers to compete in the U.S. market.

Apex Digital is an American sales and distribution company of low-priced televisions, DVD players and digital media recorders, much of which is sourced from Changhong Electric.

In July, Changhong revised its 2003 net profit to $25 million, due to an adjustment in its short-term investments.

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