Wednesday, July 13, 2005

Focus Media Initial Public Offering

As we reported in October of 2004, Focus media (a digital signage network) follows through with initial public offerring on the NASDAQ exchange.

Focus Media Holding IPO prices above range; audiovisual television displays in China (FMCN) 17.00 :Focus Media Holding prices its IPO at $17, above the expected range of $14-$16. The co operates the largest out-of-home advertising network in China using audiovisual television displays instead of traditional billboards to broadcast advertising. Its network was located in 70% of commercial buildings surveyed in 13 cities across China, including 72% of the commercial buildings in Beijing. The co believes its significant market share, combined with the exclusivity and renewal terms contained in over 90% of its agreements with landlords, creates high barriers to entry. Its displays are placed primarily in high-traffic areas of commercial office buildings such as in lobbies and near elevators, as well as in large retail chain stores. The advertising market in China is one of the largest and fastest growing in the world. The co is profitable and 2004 revenues were $29.2 mln, up from $3.8 mln in 2003... The Chinese IPO market has been all over the board, with Shanda (SNDA) being a huge success, but China Fin Online (JRJC) not doing so well. However, FMCN's growth, market share, favorable contracts, and small deal size of 10.1 mln makes this attractive for traders. Goldman is the lead underwriter. If this IPO does well, expect its chief competitor, Target Media, to make its debut late this year or early next.

1 comment:

Anonymous said...

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