Jilin-based company will use capital to extend coverage range

SHANGHAI - The Chinese cable TV company Jishi Media Co Ltd, based in northeastern China's Jilin province, which debuted on the Shanghai Stock Exchange on Thursday, closed at 13.12 yuan ($2.08) per share, a rise of approximately 87 percent from its opening price of 7 yuan.

Jishi Media now has total assets of 3.2 billion yuan and net assets of 1.5 billion yuan. It has established an automatically switched optical network, a technique widely used in communications that covers 51 cities and counties within Jilin.

The company will release its financial report for 2011 in March, but said earnings doubled in 2010.

Jishi Media is not only the first company in Jilin province to list in Shanghai within the last decade, but is also the largest IPO in the province in the same timeframe.

"The culture industry in Jilin, which maintains annual growth of more than 20 percent, has demonstrated great momentum. To help with the development of this industry, the provincial government of Jilin will support and promote companies in the cultural sector entering the capital market," said Xun Fengqi, director of the publicity department for Jilin province.

Wang Shengjie, general manager of Jishi Media, said that the funds raised will be mainly used for two purposes: expanding the range of cable TV coverage, and developing high-definition interactive multimedia TV.

"On one hand, we will make sure to increase our income with the expansion of our cable TV coverage. On the other, we will establish a platform for our users with all kinds of service such as high-resolution TV, time-shifting TV, TV on-demand and other factors," said Wang.

Wang said the opening price "was unexpected but makes sense anyhow", Lin Jin, a senior researcher at the Shanghai-based SWS Research Co Ltd told the Jiefang Daily newspaper that a reasonable price for Jishi Media would be between 7.3 and 8.6 yuan.

Meanwhile, the P/E ratio of Jishi Media is 37.2, while that of Phoenix Media, a similar, but better-known and larger, company of the same kind, is only 35. That has led some experts to express concerns that Jishi Media may become a target for market speculators.

Guo Shuqing, head of the China Securities Regulatory Commission, said the agency will address the issue of overpriced IPOs, according to reports in the China Securities Journal on Thursday.

The only stocks to begin trading on the A-share market this week, Jishi Media and Universal Scientific Industrial (Shanghai) Co Ltd, were the objects of high demand from private and institutional investors.

However, the fact that media stocks have performed strongly during the past two months, led by mobile Internet companies, has provided a boost for the market.

At a meeting in October, the central government decreed that the culture industry will account for 5 percent of the country's annual GDP by 2015 and will become a pillar industry by 2020.