Phoenix soars on official reports of China landing
Sidney Luk and Hui Yuk-min
After more than a year's delay, Phoenix Satellite Television is close to getting official approval to broadcast its 24-hour InfoNews channel in China, according to sources near to the company.
Officials at the State Administration of Radio, Film and Television (SARFT) had told the company its application had been approved but it was still awaiting official notification, the sources said.
Shares in the Growth Enterprise Market-listed company were suspended yesterday afternoon pending the release of price-sensitive information. The shares had surged 8.97 per cent to 85 HK cents before the company requested the suspension.
'We were aware of some price-sensitive information circulating in the market and we noticed the unusual price movement and trading volume,' Phoenix deputy chief executive Leung Noong Kong said.
Sources said Phoenix would issue an announcement early next week.
With the mainland landing rights, Phoenix would be able to broadcast its InfoNews channel - which was launched in early 2001 - to hotels and some special venues.
Phoenix has recorded losses for the past seven quarters because InfoNews - operated at a monthly cost of US$18 million to US$19 million - has failed to get broadcast rights in China.
The broadcaster reported a loss of HK$20.42 million for the three months ended September 30 last year. InfoNews and two other channels accounted for a HK$45.07 million loss, which almost offset the HK$45.08 million operating profit generated by Phoenix's core Chinese and Movies channels.
Last month, chief executive Liu Changle said he expected the company to break even for the year to June 30, helped by improved advertising revenues.
Analyst Mona Chung at Core Pacific-Yamaichi International said winning mainland rights for InfoNews would be positive for Phoenix.
'However, it takes some time [to generate profit] and we do not expect a turnaround this year,' she said.