Worst may be over for newspaper industry
It has been a tough year for Hong Kong's newspaper publishers, with competition from free newspapers hurting circulation and advertising rates. Still, some industry sources believe the worst may be over.
Next Media, the publisher of Apple Daily, is the first of the city's publishers to show investors how it is coping, releasing annual earnings results on June 18.
'In general, the newspaper industry is doing well, especially mass-circulation newspapers such as Oriental Daily News and Apple Daily as they recover from competition from the [free] dailies,' said an executive at a Chinese-language newspaper.
The executive said with free newspapers established in the Hong Kong market for more than a year, paid circulation picking up and advertising dollars on the right track, the industry outlook was brighter. 'I think we have bottomed out from the worst situation,' he said.
Metro Daily, published by Metro Publishing Hong Kong, launched the first free newspaper in the city in May 2002 with exclusive distribution rights within MTR stations. Two other free sheets entered the market last year, with the total daily circulation of free papers in Hong Kong now estimated at more than one million copies.
Next Media is expected to report earnings of HK$200 million to HK$367 million for the year to March, a 10 per cent to 15 per cent decline from the previous year.
The company recorded a 29 per cent drop in net profit to HK$157 million in the six months to September, citing fierce competition from the free dailies.
Deutsche Bank said Next Media's Hong Kong business was turning around as advertising revenue declined at a rate lower than in the first half of the fiscal year. Next Media's rival Oriental Press Group was estimated to make a net profit of about HK$140 million for the year, a 20 per cent increase over the previous period on the back of cuts in staff, market sources said.
Hong Kong Economic Times Group, which publishes financial news daily Hong Kong Economic Times, is expected to report a 20 per cent gain in net profit to HK$118 million in the period. BNP Paribas said the newspaper was benefiting from robust sales of notices and announcements.
TVB celebration drama
Television Broadcasts, the city's largest free-to-air television broadcaster, will kick off its 60-episode drama The Drive of Life next month to celebrate the 10th anniversary of the handover.
Market speculation is that Henderson Land Group, which is owned by Lee Shau-kee, has secured the sponsorship.
The drama, which is the first co-production project between TVB and China Central Television, will be aired in Hong Kong from July 13. 'This is a good start for us and will be a trend to co-operate with mainland broadcasters,' a company source said.
Ming Pao merger
Ming Pao Enterprise, the publisher of Chinese-language paper Ming Pao Daily News, has recommended its shareholders vote for the proposed HK$2.6 billion merger with sister company Sin Chew Media and Nanyang Press to form one of the world's largest Chinese newspaper publishers.
Ming Pao's independent shareholders will cast their vote in a special general meeting on June 27 on the proposed merger.
The merged company will become Hong Kong's second-largest listed newspaper publisher. Next Media is ranked first with a HK$6.3 billion market capitalisation.