BLUEFOCUS COMMUNICATION GROUP, Asia’s No.1 PR firm and among the top 25 worldwide, saw its Jan-Sept bottom line surge 112% to over 200 million yuan, allowing it to now trade at its 52-week high.
An executive said aggressive acquisition searches and multimedia expansion will continue to boost the Shenzhen-listed firm’s standing.
“In recent years, BlueFocus has continuously maintained both a rapid organic expansion rate as well as aggressive growth via M&As.
“We will continue building upon its leading position in both China and the region to further enhance its standing as a top-rate media marketing organization covering advertising, public relations, promotional activities and others to broaden its operating scope and client base even wider,” BlueFocus Deputy General Manager Mr. Xu Zhiping told investors at the Aries Consulting-sponsored “Braving the Waves: China Investment Strategies 2013” conference.
Speaking at the event in Shenzhen featuring China, Hong Kong and Singapore-listed firms, Mr. Xu said that thanks to “inorganic” expansion – especially since going public in Shenzhen nearly three years ago – this has allowed the public relations and investor relations play to do more than its fair share of helping consolidate a very fragmented sector in China.
“In August 2012, Holmes Report ranked BlueFocus as the No.24 global PR firm, and the group once again received top honors in the Asia Pacific region.”
But even prior to listing on the Shenzhen-based ChiNext Board – often referred to as “China’s Nasdaq” – Beijing-based BlueFocus had already become the preeminent public relations services enterprise throughout all of Asia, and its post-IPO capital accretion only allowed it to further bolster its market size and share.
After going public, BlueFocus took full advantage of its newly-enhanced capital raising status to acquire SNK Advertising, Accurate Sun (Changchun) Media Advertising, Beijing Kingo Advertising & Communication Co and other peers to expand its business into multimedia and Internet advertising, strategic advertising, financial public relations, full-service PR and other areas, Mr. Xu added.
Among the post-public pickups for BlueFocus was Singapore’s largest investor relations firms – Financial PR.
Bringing a broadening range of peers under its corporate umbrella – and all the new client revenue they contribute – has been paying off handsomely of late in BlueFocus’ earnings statements.
For the first three quarters of 2012, operating revenue rose 109.4% y-o-y to 1.52 billion yuan, producing a net profit increase of around 112% to 201 million.
“The bottom line surge was mainly due to faster client fee income growth and market expansion as well as contributions from newly acquired industry peers and improved resources utilization following enhanced images of various brands,” Mr. Xu – who owns an 8.34% stake in BlueFocus – told investors.
Indeed, with globally-recognizable clients like Toyota, Hyundai, VW, BMW, Sony, Canon, Microsoft and China’s own Lenovo among countless others, brand enhancement was critical to success in this business.
“Our core business is to raise brand recognition and enhance the image of our clientele, extending our business reach into advertising design, production, business/brand promotion, exhibitions and public relations activities,” Mr. Xu said.
Mr. Xu, a computer science graduate of Peking University, therefore knows a thing or two about technology, and added that Asia’s top PR enterprise was open to all forms of media formats to get its point across, i.e. the promotion of its rapidly expanding clientele.
“Whether via digital multimedia or on-site activities, BlueFocus aims to raise the cachet of its clients’ brands and give them a more competitive standing in their respective industry, with the ultimate goal of promoting corporate brand image and boosting sales.”
Mr. Xu said that prior to going public in February 2010, the public relations industry was beginning to take off in China but the concept of investor relations was still a relatively new and foreign concept, especially among A-share listed firms.
However, the country’s PR and IR sector has been playing catch-up with global peers and for good reason.
China’s total advertising industry market scale surpassed 300 billion yuan in 2011, ranking it No.3 worldwide.
“At the same time, the country’s public relations industry rose over 20% in 2011 to 26 billion yuan with tremendous market potential still untapped,” Mr. Xu said.
He added that over the past few years, digital multimedia marketing has rapidly taken off in China and BlueFocus has fully embraced this high-growth potential market development.
In 2005 the group established its digital multimedia department and has since undertaken a tireless and highly-effective campaign to acquire strategic peers in the industry, continuously on the lookout for attractive pickup candidates.
“Thanks to this foresight, BlueFocus has already begun showing strong earnings benefits from its full involvement with digital multimedia marketing.”
Mr. Xu added that proactive M&A strategies and a growing focus on new media technology will bring great benefits down the road.
“Our acquisitions created strong business synergies and the multimedia business now accounts for some 40% of our total revenue. Anticipating tremendous growth, digital multimedia will be our next growth engine.”
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