TVB shares rise as broadcaster and new Shanghai partner set sights on mainland market
Broadcaster predicts presence of Shanghai partner will open doors and lead to a 'remarkable' rise in revenue from huge mainland market
Television Broadcasts (TVB) shares surged yesterday as Hong Kong's dominant free-to-air station and its major new partner from Shanghai set their sights on cracking the mainland market while introducing innovation to diversify production.
The investor group that owns the controlling stake in TVB has brought in Li Ruigang, the founding chairman of CMC Capital and chairman of Shanghai Media Group (SMG), as a shareholder, making him an indirect TVB investor.
The change in the shareholding structure was welcomed by the stock market - while the Hang Seng Index was down about 0.4 per cent, TVB shares closed 3.59 per cent higher at HK$50.45 on the first trading day after the announcement on Wednesday.
Li, a Shanghai-based media executive who commands considerable respect in the mainland entertainment industry as well as in Hollywood, has been dubbed by some industry insiders as "China's Rupert Murdoch".
A source familiar with the TVB deal jokingly described Li's entry as "the TV version" of the Shanghai-Hong Kong Stock Connect scheme, which links the cities' share markets and has in recent weeks given a welcome stimulus to the local bourse.
TVB wants to capitalise on Li's connections and further build up its international profile, while improving content that is seen to be stagnating in a lacklustre Hong Kong market.
The local television industry is expected to get a much-needed boost with the arrival of Li, as well as Pansy Ho Chiu-king, daughter of Macau tycoon Stanley Ho Hung-sun, who has joined a consortium seeking a new free-to-air licence in Hong Kong.
Having known former long-time TVB boss Mona Fong Yat-wah for many years and won her trust, Li has been working with the company in producing programmes and promoting the station's artistes on the mainland since 2010.
TVB Group CEO Mark Lee Po-on said yesterday that he believed Li - whose portfolio spans films, TV drama series, sports and talent management, as well as e-commerce - could inject new life into the station's programming and development.
"Through Li's connections, we can work with overseas companies to produce programmes like [a popular reality talent show] or some big-budget TV series," he told the .
He expected the group's revenue from the mainland market to see a "remarkable" increase in the next two financial years.
But he stressed that Li would not be involved in the daily operations of the company, and promised that TVB's news division would continue to function independently without any interference. He said: "TVB's shareholders have long been very diversified … The [station] also has to follow programme codes set out by the government."
Before Li joined the consortium that indirectly holds the controlling stake in TVB, the group was controlled by TVB chairman Charles Chan Kwok-keung, non-executive director Cher Wang and US-based Providence Equity Partners.
Grace Leung Lai-kuen, a lecturer at Chinese University's school of journalism and communication, said: "To Charles Chan, Li's presence is also a balance of power as Cher Wang is from Taiwan."