Chinese Newspaper Groups Prepare for IPOs
Several leading newspaper groups, formerly tightly controlled
by the Chinese government, are heading for overseas listings
in Hong Kong. These represent the first groups of major
media corporations which are becoming publicly traded
companies.
Beijing Media Group, which handles advertising for the
the Beijing Youth Daily and other Beijing papers, will
be the first to be publicly traded on the Hong Kong Stock
Exchange in December. The group is now on its road show,
and hopes to raise US$100 million from its listing.
The company is profitable, with a 2003 net profit of
153 million yuan on revenue of 1.07 billion yuan. BNP
Paribas, the lead underwriter, has said that the fair
market value of the company should be US$383-387 million.
The company derives 35% of its revenue from real estate
advertising, which has suffered from the government's
credit crackdown earlier this year. Chinese newspapers
get a significant part of their advertising revenue from
new real estate developments.
Following the Beijing Media Group, the Shenzhen Media
Group, based in Shenzhen, also plans to go public.
The change to private media companies has also meant
that Chinese newspapers are now highly competitive in
their quest for readers, and can no longer count on a
steady stream of readers and advertisers. Scantily clad
young women are now featured in newspaper stories and
advertisements, along with stories about fashion, travel
and staying youthful for women readers, while men are
largely interested in sports, cars and gadgets.
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