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SCMP Reporter

Nanjing Dahe hopes to grab a bigger slice of the mainland pie after raising up to $170 million with GEM flotation

Competition for the mainland's outdoor advertising market is expected to intensify next month, when Nanjing Dahe Outdoor Media hopes to grab a bigger market share after listing in Hong Kong.

The H share hopes to raise HK$130 million to $170 million from an initial public offering on the Growth Enterprise Market as early as next month.

Analysts believe the listing of Nanjing Dahe on the second board will threaten existing players such as Clear Media.

'Fund managers will have another option if they want to put their money in outdoor media firms,' said Florence Cheung of Sun Hung Kai Research. 'It will affect the trading of Clear Media shares.'

Nanjing Dahe, which is mainly involved in the design and production of outdoor media advertising, says it  has a 15 per cent share of the outdoor poster production market in the mainland.

In comparison, Clear Media is focused on bus-shelter advertising, of which it has a market share of 74 per cent in Beijing, 98 per cent in Shanghai and 90 per cent in Nanjing.

'China's outdoor media market is lucrative but scattered and loosely controlled,' Ms Cheung said. 'Besides, many mainland firms have been suffering from the problem of account receivables.'

Clear Media chairman Steven Yung said outdoor advertising would be more effective from January 1, when new regulations limiting television commercials to just 20 per cent of a day's broadcast were introduced.

Outdoor advertising revenue accounts for 18 per cent of total advertising spending in China, up from 16 per cent two years ago.

Mr Yung also expected outdoor advertising to benefit from the closer economic partnership arrangement.

'It is all about brand building,' he said. 'For example, banks are setting up  branches in China but  their services are all similar. They need better marketing and advertising to differentiate themselves [from their competitors].'

Mainland advertising spending is expected to jump 30 per cent this year to US$21.9 billion and will grow 15 per cent to $25 billion next year, according to Carat Media Services.

'The Hong Kong domestic business is never a big advertising market ... a lot of the growth has gone to China,' Carat Asia-Pacific chief executive David Liu said.

'The more the companies focus on China, the less they will look at  Hong Kong.'

He expected this year's advertising spending in Hong Kong to drop 4 per cent from last year to US$4.28 billion, and rise 5 per cent to $4.5 billion next year, when the global economic situation improved.



Outdoor ad market to heat up with HK listing