H1 profit double for China Party Organ website operator

24 August 2012 18 h 21 min Comments Off

People.cn Co. (603000.SH), the official website of the People’s Daily, the flagship newspaper of the Communist Party of China, more than doubled its net profit in the first half of this year compared with a year ago.

The company went public after raising 1.4 billion yuan in an initial public offering in April 2012, at Shanghai Stock Exchange.

In a stock exchange filing Wednesday, the news portal—which is nearly 80% owned by the People’s Daily—said its first half net profit rose to 64.9 million yuan ($10.22 million) from 32.3 million yuan a year ago and it recorded revenue of 291.6 million yuan, marking a 38% increase. Earnings per share was 0.28 yuan, compared with 0.16 yuan in the same period a year ago.

People.cn attributed the robust earnings growth to strong performances in its three core business: mobile-device news content business; its business selling political; and economic analysis and advertising sales.

But it also stressed the “pivotal impact” of the Chinese government’s support for what officials in China call the “cultural industry”. As part of its 12th five-year plan, for the 2011-2015 period, Beijing has been aggressively promoting the cultural industry, which includes news media, publishing and education-related businesses.

People.cn’s listing in Shanghai in late April also came as China’s state-linked media companies restructure to better compete with popular commercial website operators such as Sina Corp. and Sohu.com Inc.

The news portal also counts state-owned telecommunications companies including China Mobile Ltd, China Unicom and China Telecom Corp as minority shareholders. Such affiliations have started to pay off.

“Thanks to the deepening cooperation with telecom operators, all kinds of mobile value-added services have continued to advance and brought about income growth areas,” People.cn said in its filing.

In the first half of this year, People.cn’s mobile value-added services contributed revenue of 45.1 million yuan, up about 80% from a year ago. According to the semiannual report, revenue from its information services rose 64.1% on year to 84.4 million yuan in the same period, with advertisement sales up 18% at 154.1 million yuan.

Revenue split:

. Advertisement sales                                             154 million yuan    + 18.35 percent YoY

. technology and mobile value-added services   53.15 million Y      + 80%

. Wireless information services                             84.35 million Y      + 64.12

TOTAL                                                                       291.6 million Y        + 38%

Sources: WSJ, Xinhua (22, 23/08/2012)

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