Growing strength in Sector; Sun Media Investment and SINA Jointly Ranked First
in Overall Strength
SHANGHAI, China, Feb. 18 /Xinhua-PRNewswire/ -- As reported in the China
Business Times, China's Media magazine has released its new rankings of 13
privately run media corporations in China, with SINA.com, Sun Media Investment,
Shanda Networking, Netease and Tom.com making-up the five top ranked firms in
terms of overall strength.
The opening of the Chinese media to foreign investment, in the wake of the
Sixteenth National Congress of the CPC and a series of policy reforms, has
created intense interest in international finance markets in the current state,
and future development prospects of privately held firms in the media sector
in China. At the same time, the media market in China is complex with
financial markets unclear of the true 'landscape' in the sector. Media
magazine selected thirteen privately run media corporations with assets valued
at more than RMB100 million for analysis and comparison against the following
five indices: total assets, net assets, revenue, net profit and visibility
(brand awareness). On the basis of individual rankings on the five indices,
Media magazine created an overall weighted ranking reflecting overall
corporate strength.
The 13 corporations selected for benchmarking are highly representative of
the growth in the sector overall in China. All of the 13 private media
corporations hold assets valued more than RMB100 million, with their total
assets amount to RMB19.12 billion, an average of 1.46 billion for each company.
Shanda Networking, the online games operator, holds the largests assets at
4.51 billion RMB. The top five of the 13 corporations hold assets valuing
more than two billion RMB, accounting for 38% of the total, and the other
eight hold assets valuing more than 0.96 billion, accounting for 61%.
The total net assets held by the thirteen private media corporations add
up to 11.56 billion RMB, with an average of 0.89 billion RMB, with Sun Media
Investment, the largest one, holding 2.64 billion RMB in net assets. Sun
Media Investment remains debt-free reflecting its overall financial strength.
Sun Media Investment's strong ranking in net assets reflects its investment a
nationwide fiber-optic network in China. The top five of the 13 corporations
hold net assets of more than one billion, accounting for 38%, and the other
eight hold more than 0.5 billion, accounting for 61%.
The total revenue of all the 13 private media corporations exceeded 100
million RMB for the most recent reported year. Sun Media Investment again led
the way with a total revenue of 2.23 billion RMB mainly coming from
investments. Joyful Media, the smallest of the 13 in this category, achieved
0.11 billion RMB in revenue. The total revenue of the 13 corporations reached
10.22 billion RMB, with an average of 0.78 billion RMB. Four out of the 13
corporations have a revenue of over one billion RMB, accounting for 30%, and
eight have revenue over 0.4 billion RMB, accounting for 61%.
The total net profits of the 13 corporations reach 3.94 billion, with an
average of 0.29 billion. Sun Media Investment ranked first with a profit of
0.727 billion RMB, followed by Shanda Networking with RMB620 million. More
than half of the 13 enterprises made a profit of more than RMB150 million.
Stellar MegaMedia is the only one the 13 companies that showed a loss in the
most recent financial year.
The thirteen corporations show great disparity in scale, and can be
divided into two basic groups. The first eight corporations hold assets of
more than 0.96 billion RMB, while the last five hold assets of less than 0.25
billion RMB. Sun Media Investment, SINA and Shanda Networking constitute the
real 'giants,' with their total assets adding up to 9.52 billion RMB,
accounting for 49.81% of the 13 corporations. The big three's net assets
totaled 5.66 billion RMB, accounting for 48.97%; their sales value totaled
5.09 billion RMB, accounting for 49.82% and their net profits totaled 1.88
billion RMB, accounting for 47.26%.
In terms of total assets, Shanda Networking ranks first with assets of
4.51 billion RMB, Sun Media Investment second with 2.64 billion RMB and SINA
third with 2.37 billion RMB. In terms of net assets, Sun Media Investment
ranks first with 2.64 billion RMB, Shanda Networking second with 1.72 billion
RMB and Tom.com third with 1.65 billion RMB. In terms of revenue, Sina ranked
first with 1.6 billion RMB, Sun Media second with 1.37 billion RMB and Shanda
third with 1.26 billion RMB. In terms of net profits, Sun Media ranked the
first with 0.72 billion RMB, Shanda Networking second with 0.62 billion RMB
and SINA third with 0.54 billion RMB. In terms of visibility (brand
awareness), SINA ranks first, Sohu second and Netease third.
The 13 corporations are characterized by the following six features, which
can be characterized as key success factors within the industry:
First, they cover a wide range of industries and most of them are cross-
media enterprises. Except Focus Media and Target Media which mainly focus on
advertising, all the others engage in more than two media sectors. Of these,
Sun Media Investment is the most diversified with investments in magazine
publishing, TV production, multimedia, satellite cable TV, films, education,
advertising and sports marketing, and AV (DVDs, etc.) production and
distribution, etc. Sun Media Investment holds shares in more than 20 media
operations, controlling no less than 60 media brands and products in 12
countries and 17 cities.
Second, the major companies increasingly across borders and with a Greater
China mentality, and bridging the Mainland, Taiwan and Hong Kong. Stellar
MegaMedia, Phoenix, Tom Online, Sun Media Investment and websites such as SINA
and Sohu all target a large part of their business at overseas Chinese.
Phoenix has grown to be one of the most influential cable and satellite TV
operators among global Chinese.
Third, the major firms are growing rapidly with robust financing. Most of
them have been publicly listed in overseas markets or control many listed
companies. Even the few unlisted enterprises are also seeking support from
overseas capital markets. Stellar MegaMedia possesses listed companies in
markets both home and abroad.
Fourth, the companies operate successfully within the activities permitted
under government policy. Firms involved in new media remain popular among
financial markets, and rank in the first six places in the ranking.
Fifth, the companies are active in mergers, cross-holdings and cooperate
with each other. Five companies have associated transactions with each other.
Sun Media Investment was instrumental in Joyful Media's ''back-door" listing
in Singapore. Stellar MegaMedia purchased Sun TV and the Hong Kong's Sing Pao
newspaper from Sun Media Investment. Sun Media Investment and Sina hold
mutual equity.
Sixth, they focus on growth rather than mature businesses. The
advertising revenues of the top three website portal are growing at a rate of
over 60%. The revenue of Shanda Netowrking and Tom.com is also increasing at
high rates. Phoenix, in breaking through to profitability, has increased
channel advertising revenue 8 times compared to previous levels.
Overall, the survey reflects strength and optimism in the sector, with the
likelihood of increased capital flows to these firms in the near and medium
term.
Company Total Net Revenue Net Brand Total Overall
Assets Assets Profit Recog- Score Rank
nition
Sina 3 4 1 3 1 12 1
Sun Media 2 1 2 1 6 12 1
Investment
Shanda
Networking 1 2 3 2 7 15 3
Netease 4 6 6 4 3 23 4
Tom.com 6 3 5 6 5 25 5
Sohu 7 8 7 5 2 29 6
Phoenix 8 7 4 7 4 30 7
Stellar 5 5 8 13 9 40 8
MegaMedia
Focus Media 10 9 11 8 10 48 9
Enlight 11 12 9 8 8 48 10
SEEC 9 10 12 10 11 52 11
Target Media 12 11 10 11 13 57 12
Joyful Media 13 13 13 11 12 62 13
For more information, please contact:
Yang Haibin
Tel: +86-10-5873-1381 x135
Mobile: +86-138-1668-5257
Email: haibin.yang@chinasunmedia.com
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