China's publishers get a read on public markets
By Hua Jinglei
Shanghai. December 3. INTERFAX-CHINA - Leading domestic publisher China Publishing Group plans to launch an initial public offering (IPO) on a domestic stock exchange in 2010, state media reported on Dec. 3.
The Group's 12 publishing houses, including People's Literature Publishing House, Commercial Press and Zhonghua Book Company, will become part of the listed arm, the Chinese newspaper National Business Daily reported on Dec. 3.
China Publishing Group also entered a share swap and digital publishing joint venture agreement last week with Shanghai Stock Exchange-listed Times Publishing and Media Co. Ltd., an Anhui Province-based publisher. The Group said it is still seeking additional partners for its digital publishing project.
The General Administration of Press and Publications (GAPP) has been actively encouraging Chinese publishers to list on both domestic A-share markets and the Hong Kong H-share exchange since 2008, in an attempt to restructure the country's culture industry.
A number of publishers from Shanghai Municipality and Anhui and Liaoning Provinces have already listed on the Shanghai Stock Exchange, while more than ten publishing groups headquartered throughout the nation have submitted IPO applications to the China Securities Regulatory Commission (CSRC).
"More publishers will list on stock exchanges over the remainder of the year and in 2010, as a result of a State Council stimulus package implemented in July, which encourages leading cultural companies to undertake IPOs," Xu Yaowen, a media analyst with Galaxy Securities, told Interfax on Dec. 3.
Xu warned that many Chinese publishing houses lack clear shareholder structures and transparent corporate governance, which will pose a challenge during the IPO process.
"Compared with their global counterparts, Chinese publishers lack knowledge of the requirements of a public company and how capital markets operate in general," Xu said.
China Publishing Group was incorporated at the government's behest in 2002, combining 13 publishing houses and distributors. The Group currently has 14 subsidiaries and holds shares in 83 companies.
The Group generated total revenue of RMB 3.8 billion ($556.22 million) and a net profit of RMB 225 million ($32.93 million) in 2008.