China's outdoor and online advertisers post profits
In the face of a global advertising downturn, Chinese out-of-doors and online advertisers have been posting record profits but still remain seriously under-valued.
Domestic advertising spending climbed 15 percent in 2008, to RMB441.3bn (US$64.5bn), while online-advertising, excluding search engine keywords, rose 55 percent, reaching RMB11.9bn. Analysts expect online-advertising grow by at least 20 percent in 2009.
VisionChina Media Inc (NASDAQ:VISN), a public transport digital advertiser, posted a net income of US$14.8m for the fourth quarter of 2008, up 159 percent year-on-year. It expects first quarter profits of US$8.7-11.2m. The company sold an average of 8.83 advertising minutes per broadcasting hour in the fourth quarter, higher than the 8.69 minutes in the same period last year but lower than the 9.33 minutes in the previous quarter.
Meanwhile, Chinese online firm Fosun International (HK:0656) has bought a 26 percent stake in Focus Media (NASDAQ:FMCN), whose shares have fallen over 76 percent since the third quarter of 2008. Fosun, which has interests in property, pharmaceuticals and steel, stated that its investment will be passive.
Focus targets higher-end consumers with various media, including via mobile phones, outdoor light-emitting diode (LED) systems, in-store advertising and electronic poster systems. It last year sold its outdoor advertising operations to Sina Corp (NASDAQ:SINA), through an all-share deal worth US$1.8bn. Sina is one of China's biggest websites, with over 280m users globally. Fosun also has an 11.9 percent stake in Sina Corp.
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