PING AN SECURITIES: Initiating BLUEFOCUS With ‘Buy’ Call
Pingan Securities said it is beginning coverage of Beijing-based investor relations and PR firm BlueFocus Communication Group Co Ltd (SZA: 300058) with a ‘Buy’ recommendation following robust annual results for the Shenzhen-listed enterprise.
BlueFocus saw its 2011 top line surge 155.4% year-on-year to 1.26 bln yuan, resulting in a 100.5% leap in its net profit to 121 mln yuan.
“The public relations sector in China has witnessed recent growth that has surpassed all expectations, and this is helping boost brand recognition for a growing list of companies,” said Pingan.
The brokerage added that industry revenue in China from the PR sector grew by 74% last year, a much faster rate than almost any other sector tracked in the country.
“Listed companies are more eager than ever to raise their profile, especially in the hyper-competitive sectors of IT, autos and consumer goods. This all translates into sharply rising demand for services rendered by firms like BlueFocus.”
Pingan also said that BlueFocus was benefitting from the four advertising firm acquisitions it made last year, with a total additional revenue of 402 mln yuan now flowing into the group.
It is expected that BlueFocus will acquire another 35 or so advertising agencies over the next two years, making ad revenue account for around half of total group revenue by that time.
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EVERBRIGHT: Maintaining ‘Buy’ On BLUEFOCUS
Everbright Securities said it is keeping its ‘Buy’ call on BlueFocus Communication Group Co Ltd (SZA: 300058) with a six-month target price of 40.3 yuan.
Everbright also cited the stellar 2011 results as the impetus for its decision to maintain its ‘Buy’ recommendation on the public relations and advertising firm.
“Demand for BlueFocus Communication’s services is continually on the ascent.
"The firm’s dual-pronged strategy of solidifying its market position as home as well as reaching out to penetrate new markets has been very successful, and has propelled its sales swiftly,” Everbright said.
BOCI: Staying ‘Buy’ On BLUEFOCUS
Bank of China International said it is maintaining its ‘Buy’ recommendation on BlueFocus Communication Group Co Ltd (SZA: 300058).
The brokerage is also raising its target price on BlueFocus by 37% to 31.17, representing a price-to-earnings ratio of 33 times.
“The company’s mixture of organic and M&A-based growth has been very successful. And now it is aggressively expanding into the upstream advertising sector. Its total number of clients served last year stood at 693, with 65 being original clients and 330 resulting from the four advertising firm acquisitions made last year,” BOCI said.
The brokerage added that BlueFocus was also spreading its business over a larger client base, with the top five clients accounting for just 35% of total revenue last year, compared to 47% in 2010.
RISING SECURITIES: Reiterates ‘Buy’ On BLUEFOCUS
Rising Securities said it is reaffirming its ‘Buy’ call on BlueFocus Communication Group Co Ltd (SZA: 300058).
The brokerage said BlueFocus was greatly benefitting by diversifying its client base so as to avoid over-reliance on any particular customer or sector, thus shielding its operations from downturns.
“Ad revenue from IT clients was a fast growth area, rising over 59% year-on-year and standing at 25% of total revenue at year-end. Meanwhile, consumer sector clients were an even brighter area for BlueFocus, with revenue up 90.7% to contribute 13% to the top line.
“But most impressive of all was the auto sector, in which client revenue jumped 159.6% to account for 18% of the total group revenue.”
BlueFocus Communication Group provides public relations based brand management services in China. Its principal services include public relations strategy consulting, public communication, media relations, crisis management, investor relations, corporate image management, and event management services. The company’s brand portfolio includes blue cursor, Chi Young PR, and Yan Wing. It primarily serves IT, telecommunications, finance, medical, FMCG, consumer durables, government, and non-profit organizations. BlueFocus Communication Group was founded in 1996 and is based in Beijing.