Beijing Media prices IPO
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.