CHU KONG Passenger Transport Company Ltd, a wholly owned unit of Chu Kong Shipping Enterprises (Group) Company Ltd (HK: 560), has struck a cooperative deal with One Media (HK) Ltd to exploit the growing passenger ferry business in the booming Pearl River Delta for advertising.
Pursuant to the Cooperation Agreement, CKPT and One Media will jointly establish a new company -- Chu Kong Culture Media Company Ltd (CKCM) -- in which CKPT will hold 60% equity interest and One Media will hold the remaining 40%.
The total investment amount will be 20 million hkd.
"The establishment of Connect Media embodies the immense creativity and business growth momentum of CKS.
"The year 2012 marks the 50th Anniversary of the establishment of CKS, and in quest of business upgrades professional operations, we will continue to foster our competitive strength in core businesses, develop our corporate culture to innovate and properly diversify into new businesses," said CKS Managing Director Huang Liezhang at the signing ceremony.
CKCM will incorporate a new company in Hong Kong -- Connect Media Company Ltd (CMC) -- for developing the high-speed passenger transportation advertisement business.
The share capital of this company will be 50,000 usd at 500,000 shares.
Total subscription will be 20 million hkd, with 100,000 shares tol be issued initially at 200 hkd per share, in which CKPT will subscribe for 60,000 shares at 12 million hkd and One Media will subscribe for 40,000 shares at 8 million hkd.
CMC will be mainly engaged in passenger transportation media advertising for the ferries and terminals which are operated by CKPT, such as advertisement on hulls, inside cabins, mobile videos, internet (including Wi-Fi) and magazine advisements inside the cabins and terminals.
It will also include advertisements inside and outside the terminal and other electronic businesses.
Mr. Huang of CKS said the uniqueness of CKS's business model made it an ideal candidate to partner up with One Media.
"Connect Media is a new attempt to fully utilize our existing platform of CKS Passenger Transport, targeting a transformation from traditional passenger transportation into tourism passenger transportation.
"Looking forward, CKS will continue to introduce new elements into its shipping operations, forming the pillars of sustained growth forces for the group's core business."
Patrick Lam, CEO, One Media Group Ltd, was also upbeat on prospects for the landmark advertising deal between a leading water transport and media firm.
"We have very positive expectations for the tieup. CKS ferries over 13 million passengers per year in the Pearl River Delta region, all of whom can be characterized as a captive audience," Mr. Lam said.
When asked by a South China Morning Post reporter if the new venture was in any way threatened by the expansion of cross-border bus services, he said there was no inherent competition between the two modes of transportation.
"We also work with cross-border buses on advertising, so we are not concerned about the growth of ground transportation," Mr. Lam added.
Luo Jian, Director & General Manager, Chu Kong Passenger Transport Co Ltd, said that the plan down the road -- or the waterway -- was to create audience-specific content for advertisements and promotional broadcasts.
"For our core PRC 'shopping-tourists heading to Hong Kong, we will promote brands they will likely respond to in our ads. And for the Macau-bound passengers, we will of course be featuring major hotels and casinos in our ad content."
Connect Media will focus on offering value-added amusement services to passengers of CKS during their journeys, which also opens a new source of revenue for CKS.
The average duration of a passenger journey is around two hours, not including the waiting time at the ferry terminals.
The passenger journey comprises a captive environment ideal for advertisers.
The advertising target audiences will be the passengers of CKS, while the advertising customers will mainly be corporate customers in the PRC.
Click on the visual below for a 57-second slideshow of the event. For higher-resolution images, move your mouse cursor over the base of the slideshow, and select "Change Quality" to up the resolution.
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