Fund managers have warned of the high valuations for two mainland outdoor advertising agencies that are due to list on the Growth Enterprise Market this month. MediaNation plans to raise up to HK$1.03 billion and Media Partners International Holdings up to HK$368 million following the mainboard debut last month of counterpart Clear Media. MediaNation plans to offer its shares at between HK$2.60 and HK$3.80, while Media Partners intends to offer at between HK$1.35 and HK$1.72. Market sources said MediaNation was expected to report HK$97 million in earnings before interest, tax, depreciation and amortisation (ebitda) last year on a turnover of HK$444 million. This year, the company was forecast to post HK$171 million in ebitda on a turnover of HK$581 million. A net profit of HK$3 million was predicted for last year and HK$51 million for this year. MediaNation has been priced at 14 to 21 times its enterprise value/ebitda (ev/ebitda) last year and eight to 12 times the ratio this year, the market sources said. Meanwhile, Media Partners is projected to post ebitda of HK$59 million on revenue of HK$268 million last year and HK$87 million on turnover of HK$428 million this year. The company is expected to report a net profit of HK$23 million last year and HK$48 million this year. Its ev/ebitda ratio ranged between 12 and 15 times last year and between eight and 11 times this year, the sources said. 'The ev/ebitda ratios [for the two advertising agencies] are relatively high,' said a fund manager. She said Clear Media deserved a higher ev/ebitda ratio because there had been no choice before its emergence in the Hong Kong capital market. With its shares offered at 16 times this year's ev/ebitda, Clear Media raised HK$736 million on its mainboard flotation. The fund manager said MediaNation and Media Partners would face more competition, including challenges from mainland firms. Both companies have said they are going to bid for the advertising agency rights for metro lines on the mainland, that are expected to be in place soon. Winnie To Pik-shan, chief executive of Media Partners, said the mainland market was big enough for the participants to compete and grow. She projected that the mainland's advertising market would increase 15 per cent this year.