People’s Daily website raised US$222m and its share rose 78% on China debut

28 April 2012 13 h 51 min Comments Off

For its debut at the Shanghai Stock Exchange, share of the website of People’s daily, the newspaper of China’s Communist Party, has jumped as much as 78% to 35.58 yuan.

The website sold 69.1 million shares at 20 yuan each in order to raise 1.4bn yuan ($222m; £138m), nearly three times the amount it had originally planned ($84m in its IPO brochure).

This very mediatized listing happens as China’s internet market, the largest in the world, is growing at a fast pace with more than 500 million internet users and Chinese publishers need to raise fund and attract a new audience.

Investors hope that as online advertising revenues grow, websites such as People.cn will see their profits rise. But the competition is already hot. The state-run website will face competition from private firms such as Sohu and Sina Corp, which are all quoted in NY or HK.

People’s daily said it plans to use the amount raised from its share sale to upgrade its technology and expand its operations as it looks to boost its market share. People’s The group is especially expecting to deliver more news to more customers on its mobile platform, another big area of growth in China.

Analysts said that given the growing competition, companies needed to keep updating their technology to retain their user base.

“The key differentiator is how well produced and presented a company’s content is,” Mark Natkin of Marbridge Consulting told the BBC. “And producing quality content is an expensive business.”

Sources: Xinhua, bbc.co.uk, FT (20 & 27/04/2012)

ON THE WEB:

. “Looking for News Value in People’s Daily IPO” english.caixin.com (02/02/2012)

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