Beijing Media profits down: real estate and tennis to blame

Today’s Beijing Youth Daily

DowJones Newswire reports:

Hong Kong-listed Beijing Media Corporation Ltd. issued a profit warning for its 2005 results Tuesday, citing a slowdown in advertising income…

…The company attributed the decline in its advertising revenue to a slowdown in China’s real estate market, because real estate advertisements are the company’s principal source of income.

Beijing Media handles advertisements for the Beijing Youth Daily, the Chinese capital’s top newspaper in terms of advertising revenue, and other publications in the Beijing Youth Daily Group.

Growth in China’s property market slowed last year after the government introduced measures … to cool down the mainland’s overheated real estate market…

Beijing Media said the unsatisfactory financial performance of the China Open Tennis Tournament held last year also contributed to the earnings decline, though the company didn’t specify its role in the sporting event…

…Net profit for the six months ended June fell 99.7% to CNY170,000 from CNY66.31 million in the same period in 2004…

…Beijing Media’s … shares have risen 23% since the start of the year, fueled by strong investor interest in China-related stocks in the first quarter.

By comparison, the benchmark Hang Seng Index has gained 10% over the same period.

Even at the time of its listing on the Hong Kong stock exchange, Beijing Media warned that one of its primary risks was too much dependence on real estate advertising, so this news is not too shocking. As China’s newspaper market continues to grow, defying trends in other countries, Beijing Media is likely to remain a leading player.

Beijing Media’s Hong Kong listing was a first for a Chinese media company. South African media group Naspers owns about 10% of the listed company, a fact which has gone unnoticed by many of the noisier European and American media groups trying to get their foot in the China door.

Maybe it’s just easier for Africans. 亚非拉团结起来？