Seven Star Records 2007 Loss of HKD 380 mln

China Business News, 5/07/08

TV shopping company Seven Star Shopping Ltd (www.cntvs.com) (0245.HK) recently released its 2007 annual report, showing losses of HKD 380 mln. This year, the company plans to use Shanghai as a test site for a new "virtual store" model integrating television, internet, and postal sales, with initial focus to be on mobile phones and other electronic and digital product sales. If the new model should prove successful, the company will apply it throughout the country.

With the increasing numbers of television shopping enterprises and corresponding increases in competition, TV advertising timeslots have become an increasingly limited resource, leading to steep rises in the purchase price of the "garbage timeslots" favored by TV shopping companies. Average television-related costs for TV shopping enterprises rose by approximately 30% last year, in addition to shipping and logistics costs.

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