Shares Outstanding 54.0M Institutional Ownership 72.22% Market Cap 4.5B
Focus Media Holding Ltd. The Group's principal activity is operating out-of-home advertising network service using audiovisual television displays. It includes commercial location network; in-store network; poster frame network; mobile handset advertising network and outdoor LED network. Other activity includes selling advertising displays and equipment which are placed primarily in high-traffic areas of commercial office buildings.
China's Focus Media to offer American depositary shares
Financial Times
Author: su Focus Media Holding Ltd said it will offer 6.66 million American depositary shares (ADSs), each representing 10 ordinary shares, for 79.50 US dollars per ADS. The company said 1.5 million ADS units will be backed by new shares, and 5.16 million will be sold by shareholders including Feng Yu, the current co-chairman. In addition, the underwriters have been granted an option to purchase up to 998,355 additional ADSs from Jason Jiang, Focus' founder, chairman and CEO, within 30 days from the date of the prospectus supplement. Citigroup, Credit Suisse, Goldman Sachs and Merrill Lynch are serving as the joint bookrunners for the offering. Focus Media operates the largest out-of-home advertising network in China using audiovisual flat-panel displays in public venues.
-------------------- This is not a recommendation to buy or sell securities.
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Looking at Focus Media Through Warren Buffett's Lens
Posted on Feb 20th, 2007 with stocks: FMCN
Barak Paztal submits: Focus Media (FMCN) will release its 4th quarter report on February 26. It will probably be another amazing quarter for Focus Media, the company that dominates Chinese indoor advertising. The company estimates that the 4th quarter net income will be between $34 to $35 M USD.
The main goal of this article is to try to predict what is expected of Focus Media in the long run, and to check if the company internal value is attractive. The methodology that I used used is Warren Buffett's tried-and-true value approach.
Focus has 3 major advantages:
1. Great management – I have been reviewing Chinese internet and media stocks for two years now. I don't know many companies whose management reports are so accurate and demonstrate such a big success. Also the quality of the reporting is remarkable.
2. Dominant position in the market – Focus has control of over 90% of the indoor advertisement market. The company acquired its major competitor last year and by that increased its dominance in the market. Now the company is constantly increasing the pricing whereby it can maintain it remarkable growth trend.
3. According to the internal value approach the company value is $27.8 B USD, which means safety margins of 85% compared to the current market cap. Looks like a good return vs. risk investment.
The data that was used in order to do the evaluation:
35% - Annual growth during the following decade (Currently the quarterly growth rate is about 30%). 5% - Annual growth after the following decade. 10% – Yearly interest rate.
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