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Beijing Media prices IPO
(Xinhua)
Updated: 2004-12-20 15:02
Media Corp. (1000.HK) priced its initial public offering at HK$18.95, the top
end of the indicative price range of HK$14.95 to HK$18.95, a source familiar
with the deal said over the weekend.
This allows the company to raise HK$904.7 million ahead of its listing in
Hong Kong Wednesday.
The source said the retail tranche was 420 times subscribed, while the
institutional tranche was 133 times covered.
Beijing Media handles advertisements for the Beijing Youth Daily, the China
capital's top newspaper in terms of advertising revenue, and other publications
in the Beijing Youth Daily Group, one of mainland’s largest newspaper groups.
Beijing Media’s listing is a milestone as it is the first time the government
has opened up its media industry to public ownership.
For investors, the opening of mainland’s media companies creates
opportunities to share in its fast growing advertising revenue market, which
rose 29 percent year on year to reach 24.3 billion yuan in 2003.
South African media group Naspers Ltd. (NPSN) bought a 9.9-percent stake in
Beijing Media.
“The selling point of Beijing Media is on its uniqueness. It’s the first
mainland-based newspaper group to list part of its assets overseas,” said Tommy
Ho, senior analyst at UOB Kay Hian (Hong Kong) Ltd.
The huge over-subscription to the offering’s retail tranche triggered a
clawback mechanism, resulting in 50 percent of the offered shares being
allocated to retail investors, up from 10 percent originally. Institution
investors will now receive 50 percent of the IPO, down from 90 percent.
Beijing Media offered 47.74 million shares. The IPO price of HK$18.95
represents 19.8 times its forecast 2004 earnings.
Beijing Media expects its net profit in 2004 will be at least 194 million
yuan. It posted a net profit of 153 million yuan last year and 139 million yuan
in 2002.
The company said it would use the proceeds to develop new business.
According to sources in the company, 74 percent of its revenue comes from
advertisements, of which 98 percent is from the Beijing Youth Daily.
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