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Singulus stock up in wake of Warner's BD move

Singulus Technologies, the German maker of replication line for CDs and DVDs, jumped for a second day in Frankfurt trading after Warner adopted the Blu-ray format for its hi-def DVDs.

Chief Executive Officer Stefan Baustert, who said in August that expectations for adoption of the Blu-ray format were too high, said in an interview that Warner's decision would mean a "big jump in margins."

Singulus manufactures pressing machines for both Blu-ray and HD DVD formats. The Warner decision is good news because DVD replicators have to buy whole new machines for producing Blu-ray discs, but they only have to upgrade their current disc-making machines to make HD DVDs.

While upgrading to an HD line costs about €30,000, buying a whole new Blu-ray disc line costs around €2 million. The company makes a gross margin of 'significantly' more than 30% from Blu-ray machines and it aims to command a 65% share of the global market, Baustert said in an interview with Boersen-Zeitung.

Based in Kahl, Germany, Singulus has sold eight Blu-ray replication machines so far, it may book orders for 15 Blu-ray dual-layer machines this year. Analysts' estimates for €23 million in sales from Blu-ray related products in 2008 and for €57 million in 2009 are 'absolutely realistic,' Baustert said in the German newspaper.

Story filed 09.01.08

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