Fung Choi acquired distribution and exclusive ad placement rights to current affairs magazine i Look for Rmb 60 million. Above: movie star Zhang Ziyi gracing i Look cover.

CHINESE MEDIA group Fung Choi’s 3Q08 revenues rose 38% to reach HK$367.9 million, with strong segment growth from print advertising agency and printing.

The group maintained gross margins at 34%.

Sales from printing of advertising materials, magazines, books and light packaging boxes, contributed 46.6% and grew 65% y-o-y to HK$170.8 million for the third quarter of the financial year ending Jun 2008.

Top performing segment was its print advertising agency and content management.  Segment sales grew 75.1% to reach HK$34.5 million, boosted by magazine titles newly acquired or launched.

Group subsidiary Flying Media manages content for China’s magazines and enjoys exclusive ad placement rights in return.

The group recently added i.Look, which covers China’s current affairs, to its stable of exclusive magazine ad placement rights.

Fung Choi’s subsidiary, Guangzhou RainbowChina Culture and Information Co, paid Rmb 60 million for i.Look’s distribution and exclusive ad placement rights for the decade commencing 1 Feb 2008.

Fung Choi raised Rmb 380 million in Jan 2008 to fund its acquisitions of rights to magazine ad placement and to expand its commercial display business.

Rmb 190 million of convertible bonds and Rmb 190 million of exchangeable bonds due 2011 were issued to Merrill Lynch affiliate Indopark Holdings.

As a result, HK$10 million of amortized bond liabilities showed up in the current quarter’s finance cost, which amounted to HK$15.9 million or a 5-fold jump y-o-y.

Net earnings growth was flat, with net earnings for 3Q08 at HK$51.4 million.  The group's bottom line was affected by the higher financing costs and a reversal of tax provision from the corresponding quarter last year.

Related article: Fung Choi issues Rmb 380 m bonds ahead of subsidiary IPO

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