New Media targets HK$112m to boost content
New Media, the magazine publishing unit of tycoon Albert Yeung Sau-shing's Emperor Group, plans to raise up to HK$112 million from an initial public offering to enhance the titles' editorial content and upgrade its publishing technology to boost production efficiency, according to the sales document.
New Media publishes five Chinese-language magazines, namely Oriental Sunday, Weekend Weekly, New Monday, Economic Digest and Fashion and Beauty.
The company plans to sell 150 million new shares at a price range of 65 HK cents to 75 HK cents, which represents an average 11.55 times to 14.44 times of its historical earnings, according to media analysts.
The offering will kick off next Tuesday and the shares are expected to trade on February 12, according to market sources.
'The valuation of the company is not that attractive as peers like Next Media now trades at 15 times earnings, and Next Media enjoys better business exposure,' a media analyst said.
New Media planned to distribute 30 per cent of net profit to shareholders after listing, the sales document said.
The publisher made a HK$31 million profit for the year ended March last year, up from HK$23.3 million the previous year, with revenue of HK$390 million, up from HK$362 million a year earlier.
For the four months ended July last year, it saw its net profit up 53 per cent year on year to HK$19.1 million with revenue up 16 per cent to HK$147 million.
The gross profit margin also increased to 35.8 per cent for the four months ended July, up from 31.69 per cent over the same period the previous year.
It attributed the increase in margin to the increase in revenue and the control of direct operating costs such as paper sourcing.
Advertising revenue accounted for the major source of turnover for the group, representing 68.51 per cent of group revenue for the four months ended July.
Circulation revenue accounted for 30.59 per cent of group sales.
'The company did not mention any plan to launch new titles after listing,' said another analyst who attended yesterday's presentation.
The publisher aims to use the proceeds to enhance the contents of the magazines so as to increase circulation income.
New Media also plans to launch websites for Economic Digest and Fashion and Beauty to boost public awareness of the titles and advertising sales.