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Big Money for Chinese Advertiser
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Focus Media Holding Ltd, China's largest overseas-listed advertising company, reported a fourth- quarter profit, compared with a year-earlier loss, as businesses spent more on marketing.

 

Net income was US$9.4 million, or 23 US cents per American depositary share, compared with a net loss of US$1.3 million a year earlier, the Shanghai-based company said yesterday. Sales rose 109 percent to US$24.6 million from US$11.8 million a year earlier.

 

Spending on advertising in China, the world's third-largest ad market, rose 21 percent last year to US$37 billion, according to New York-based research company ACNielson Corp. Focus Media owns a network of flat-panel televisions located in elevators, grocery stores and other public venues in China that show commercials. The company bought its chief rival, Target Media Holdings Ltd, in January for US$325 million.

 

"People in China have better living standards now, are making more money and spending more, which makes advertising to them more important," said Rita Chen, head of media research for ACNielson in China, speaking before Focus Media's earnings release.

 

In November, the company forecast fourth-quarter profit of between US$8.7 million and US$9.1 million on sales of US$22 million to US$23 million.

 

Focus Media shares fell 7.5 percent to US$50.50 in US after-hours trading after the company forecast profit for the current quarter would be between US$8.7 million and US$9.1 million on sales of between US$28 million to US$30 million.

 

The company's purchase of Target Media Holdings increased its network to more than 60,000 screens in 75 Chinese cities. Clients include Nokia Oyj, Toyota Motor Corp, and Sony Corp.

 

Focus Media said it agreed to buy all the shares of Dotad Media Holdings Ltd, a Chinese company that advertises on mobile phones, for as much as US$30 million in cash and stock. The acquisition is expected to be completed in the second quarter, it said.

 

(China Daily March 9, 2006)

 

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