China TV ad firm sets Olympic IPO
SinoMedia counts CCTV as biggest clientSHANGHAI -- Chinese media advertising company SinoMedia plans to raise $62 million in a Hong Kong IPO, according to a notice filed Tuesday with the Hong Kong Stock Exchange.
SinoMedia Holdings Ltd. will list July 8, with a public offering period starting June 25. The privately held company sells advertising space on Chinese television channels, including state-owned broadcaster CCTV. It is the network's largest private advertising company and the second-largest overall.
"We have a long-standing business cooperation with CCTV dating back to our inception in 1999," the company said in its notice. "In addition, we have (had) the right to sell TV advertisement time on Jiangsu TV city channel and Shenzhen satellite TV channel since 2007."
SinoMedia said that it has more than 300 clients -- including BMW, FedEx and Korean Air -- but that it doesn't have long-term contracts with its clients.
Another risk factor is that the company's business is heavily dominated by a single channel, according to Barole Shiu, an analyst at Hong Kong-based UOB Kay Hian Research. Last year, CCTV accounted for 91% of the company's earnings, said Shiu.
Money raised from the IPO may help the company diversify, however.
According to Chong Hing Securities, SinoMedia will use 70% of the money raised for strategic acquisitions and 25% to purchase advertising resources from CCTV, regional TV broadcasters and digital media companies.