FOCUS MEDIA: Singapore, Hong Kong Ad Firm's HK Placement 20x PE

PJ Wong (left), Focus Media's co-founder, Chairman, CEO and Executive Director. Photo: Aries Consulting

FOCUS MEDIA Network Ltd (HK: 8112), an “Out-of-Home” advertising network firm providing services in Hong Kong and Singapore in elevator lobbies and POS venues, said its share placement in Hong Kong has been moderately over-subscribed, fixed at 0.72 hkd per share.

This places the shares at the very top end of their indicative range of 0.54-0.72.

Focus Media raised 59.04 mln hkd through the placing of 82 mln new shares, or 20 times the group’s FY2010 price-to-earnings multiple, with dealings in Focus Media Network's shares on Hong Kong’s Growth Enterprise Market (GEM) Board beginning Thursday, July 28, in board lots of 4,000 shares.

And Focus Media Network's share price opened at a high of 0.95 hkd today!

PJ Wong, co-founder, Chairman, CEO and Executive Director of the Group, said of the company's Hong Kong share placement: “We are delighted that our placing is well-received by the investment community and at the top end of our price range.

Focus Media executives and employees celebrate as the company begins trading in Hong Kong today. Photo: Aries Consulting

"This demonstrates we have won investors’ confidence in the power of our brand, the quality of our team, the track record of our growth, the scalability of our business model and the potential of our Group moving forward.

Mr. Wong added that the listing of Focus Media Network on the Hong Kong bourse marks a “significant milestone” for the group.

“It opens up another opportunity for investors to the fast growing digital Out-of-Home advertising sector.

"Looking ahead, we will utilize the resources as a publicly-traded company to accelerate our network expansion and to create new platforms and advertising opportunities for our customers. In the process, we will endeavor to create exciting career opportunities for our employees and generate greater returns for our shareholders.”

Focus Media’s turnover grew from 33.6 mln hkd in 2009 to 48.5 mln in 2010, representing a growth of 45%.

Focus Media Network's shareholding structure

Gross profit was 38.8 mln hkd in 2010, an increase of 47% over 2009, and profit attributable to the owners of the group was 11.7 mln in 2010, an increase of 118.2% over 2009.

CIMB Securities (HK) Ltd is the sole sponsor for the placing and Pacific Foundation Securities Ltd is the sole global coordinator, sole bookrunner and sole lead manager for the placing.

Captive Audience

Captive Audience: Focus Media targets upscale lobbies and shopping venues for its ad-casts. Photo: Focus

Focus Media Network, established in 2004, is known as a “segmented media enterprise” which reaches its target market by using channels specifically tailored to a wide audience, specializing in advertising broadcasts on LCD TV screens in the elevator lobbies of commercial and residential buildings, shopping venues and other high foot-fall locations.

Focus Media is fully expected to continue hitching a ride on the rapidly expanding regional ad market -- especially Mainland China's advertising market -- which continues to benefit from ongoing liberalization of the formerly tightly-controlled media market.

See also: CHINA HIGH PRECISION: HK Listco’s 1H Off Charts On Indicator Sales