More Media IPOs From People’s Daily, Shopping Channel 电视购物，继人民日报后又一计划上市的媒体

By newsdoug on April 5, 2012

People's Daily website IPO moves forward Liberalization of China’s media sector is marching forward, with a new IPO development from the Communist Party’s flagship People’s Daily, and another from a shopping channel named Haoxiang, as players both old and young rush to raise funds and become commercial. The news comes as global media giant Disney (NYSE: DIS) may also be exploring an animation joint venture in China (previous post), and as US home shopping giant QVC is seeking to set up its own joint venture with China’s biggest radio broadcaster, China National Radio (previous post), reflecting Beijing’s recent decision to relax its grip on this sensitive sector. Let’s look at the People’s Daily first, whose previously announced plans to make an IPO for its website, Renmin Wang, has formally been approved by the securities regulator and will now begin marketing to potential investors, according to Chinese media reports. (Chinese article) Recent months have seen plans disclosed for both the People’s Daily and Xinhua to make IPOs for their websites, in highly symbolic offerings for 2 of China’s media most closely associated with state control. With this latest development, it looks like the People’s Daily’s website will be first to market, but I would expect Xinhua’s offering for its Xinhuanet to come in the next few months also assuming there are no major obstacles. Meantime, domestic media are citing an executive from a home shopping channel called Haoxiang saying the company has undergone a recent structural reform in preparation for its own upcoming IPO. (Chinese article) I’ll be the first to admit that I don’t know anything about Haoxiang, and I expect it’s probably a regional player in the increasingly competitive e-commerce space that allows shoppers to purchase products from their home over traditional television and Internet channels. Without knowing more about the company it’s hard to say whether Haoxiang’s IPO would be attractive, but it is certainly coming on the heels of a growing number of public offerings for regional media firms. Last year saw a flurry of such listings, with regional names like Jishi Media (Shanghai: 601929), Jiangsu Phoenix Publishing (Shanghai: 601928) and China Central Land Media (Shenzhen: 000719) all going to market in their drive to raise money and become more commercial. (previous post) These kinds of companies could offer an interesting investment option, as I would expect many to become acquisition targets for a few more aggressive players that are likely to emerge as consolidators for the highly fragmented market. I seriously doubt that either Xinhua or People’s Daily will be major players driving the upcoming consolidation, as both still take their orders from Beijing and have a poor track record at commercial ventures. But major media groups in big cities like Shanghai and Guangzhou could easily play the consolidator role, making them potentially interesting bets to become China’s new media giants if and when they make their own IPOs, which could happen in the next year or 2 if Beijing’s liberalization of the sector continues at its current pace.

Bottom line: The People’s Daily website and a regional shopping channel have become the latest media players to move ahead with IPOs as Beijing loosens its grip on the sector.

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