Tracking of Listed B2B Media Companies in Asia

Executive Summary

This is BSG's inaugural edition of this report which will be published semi-annually. The report tracks the top Asian B2B media companies that are publicly listed or publish reliable financial figures. In the tables that comprise this report, BSG has published all the information available. We will update and complete the profiles as more financial data is published.

In 2006, only seven of these 19 companies posted revenues over US$100 million. Pico Far East, which provides marketing, logistical and advertising services to exhibition organizers, is the largest with revenues last year of US$231 million. Pico's number one position is even more secure if its revenues are combined with the US$34 million from its Thai subsidiary, Pico Thailand. Xinhua Finance, HKTDC, Global Sources and Japan's Impress Holdings comprise the remainder of the top five.

We expect top five to change significantly in 2007. Three of the companies in the top seven are positioned to expand their revenues considerably this year. Global Sources may complete its acquisition of HC International in June of this year. If that occurs, the company will leap to second place in terms of revenues. Global Sources and HC International had combined revenues of US$194 million in 2006. Additionally, Global Sources' revenues in 2006 shot up 39.5% on the back of its recent success in exhibitions and that trend could continue this year albeit less spectacularly.

Xinhua Finance which completed its NASDAQ listing earlier in 2007 raised US$200 million which will be used to grow its business. Even without the benefit of that capital, in 2006, Xinhua Finance's revenues increased by nearly 60%.

In seventh place, Baidu's revenues expanded hugely by 162% last year. If Baidu posts similar growth figures in 2007, it will be a contender for the first or second position. Finally, if Alibaba proceeds with an IPO for its B2B business unit later this year, it will likely immediately enter our top 5.

It is worth noting the small scale of some of these companies. Seven of the top 19 posted revenues of less than US$20 million and five of those seven registered a drop in revenues in 2006. Overall, nine of the 20 companies posted a decrease in revenues. Sun Business Network's revenue recorded the largest drop falling 45% in 2006. Closely behind was Cybermedia which posted a 44% decrease in revenues in 2006. NASDAQ-listed Ninetowns had the third worst performance as their revenues fell 36%.

In terms of gross profit, Global Sources maintains the top position with US$86.42 in gross profits in 2006. In second place, Pico recorded nearly US$79 million in profit in 2006 which was a 10% increase over its 2005 figure. Japan-based Impress Holdings posted gross profits of US$46 million in 2006, while Baidu recorded US$39 million, although Baidu's 2006 gross profits did jump by an incredible 534%. CMP Asia comes in fifth with gross profits of US$37 million.

Other notable changes in profitability includes Ninetowns registered a large drop in profits falling from US$28.47 million to US$17.58 million last year. That decrease of 38% is largely due to a change in the regulatory environment in China which negatively impacted Ninetowns import/export software business. Kenfair fell dramatically from a profit of US$5.5 million in 2005 to a loss of US$3.68 million in 2006. While Sun Business Network registered the most stunning reversal moving from a profit of US$48.70 million in 2005 to a loss of nearly US$20 million in 2006 as its management continues to shift its assets in and out of the listed company vehicle.

The market capitalization of the top 19 varies widely ranging from Baidu's US$4.18 billion down to Pico Thailand's tiny market cap of just over US$12 million. NASDAQ-listed, Xinhua Finance Media comes second with a market cap of US$818 million. Global Sources is third with a market cap of almost US$800 million, while Japan-listed Xinhua Finance's value is US$700 million. The other companies with market caps of over US$100 million include Pico Far East (US$274 million), Business Media China (US$157 million), Ninetowns (US$144 million) and China Finance Online (US$136 million).