CFSG: FOCUS MEDIA NETWORK Initiated with 'Positive Outlook'
CFSG Securities has brought Focus Media Network Ltd (HK: 8112) into its coverage universe with a ‘positive outlook’.
The Hong Kong-listed firm is Singapore and Hong Kong’s top out-of-home (OOH) media company measured by the number of venues in which it deploys its digital flat-panel displays.
Besides the company’s core network of office and commercial buildings located in the prime business districts, Focus Media Network also has an in-store network in partnership with Mannings and Watsons in Hong Kong and Singapore, respectively.
“Looking ahead, FMN plans to expand its networks with the aim to reach a larger target audience, particularly higher income groups at strategic locations and points-of-sale through its existing platform or other media formats,” CFSG said.
The brokerage added that Focus Media Network continues to gain market share compared to traditional OOH formats such as static billboards.
“We believe FMN’s prime office & commercial building networks are effective media given its targeting of high-end white collar demographics with high disposable income and that its media displays are up-close in a relatively captive environment which allows better reception of marketing messages.”
CSFG added that it expects revenue tol remain stable going forward driven by an increased network expansion with more office and commercial buildings, an ad spending budget that will remain stable with consumer spending growth, as well as a limited capex along with good control in rental costs.
“We are positive on FMN’s recent appointment as YouKu’s sales media partner for securing advertisers in Hong Kong and Macau that targets online users on its Internet television in China. We believe this will provide another good platform for FMN to offer advertisers from Hong Kong and Macau to reach out to YouKu’s 300 million online users on the mainland.
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FOCUS MEDIA Network Eyes ‘Substantial’ Pickup
Focus Media Network Ltd (HK: 8112) said it has signed a memorandum of understanding (MOU) for a “substantial” acquisition, pursuant to credit terms being reached and GEM board approval.
“We are pleased to announce that on 13th April 2012 (after trading hours), Focus Media Network entered into a non-legally binding MOU in relation to the proposed acquisition, which is conditional upon, inter alia, Focus Media Network assembling the required funds for the proposed acquisition,” Focus said.
While not disclosing the exact identity of the acquisition at this date, Focus said that if it proceeds, is expected to be “a very substantial acquisition for the company.”
However, it did say the target firm would add to Focus Media Network’s market position in the region.
“The target acquisition, one of the early pioneers of the out-of-home advertising industry, has an operating history of over two decades and owns an extensive portfolio of outdoor space in Hong Kong for the provision of multi-channel out-of-home advertising services.
“The directors of the company strongly believe that the proposed acquisition will add tremendous operating synergies to both companies as both companies are operating in the fast-growing out-of-home advertising industry in Hong Kong and also serve the same group of advertisers and real estate partners.”
Focus Media Network added that is shall comply with the relevant disclosure and/or shareholders’ approval requirements under the GEM listing rules where appropriate.
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