Phoenix Satellite Television, an operator of Chinese-language television channels, received lukewarm response from investors when its shares began trading for the first time Friday on Hong KongÆs Growth Enterprise market (GEM).
Hong Kong-based Phoenix closed unchanged at HK$1.08 from its offer price after reaching a high of HK$1.17 earlier in the day. The company issued 720 million shares to raise HK$777.6 million ($99.74 million). Merrill Lynch and Bank of China International co-managed the transaction.
Phoenix, which launched in 1996, is a joint venture between Satellite Television Asian Region (Star TV); Bank of China; and Liu Changle, a Chinese businessman. The company posted a loss of HK$78 million in fiscal 1999 compared with a loss of HK$131 million the year earlier, according to the underwriters.
"Now isnÆt a strong market for media companies," says Greg Feldberg, head of the convergence team at Indosuez W.I. Carr. Still, Feldberg says the company could benefit from its relationship with the mainland, and can be considered successful in getting the listing away at all in the current environment. "I have confidence in Phoenix as this company has very strong back-up from China."
Phoenix plans to launch its new 24-hour news channel by the fourth quarter of this year, the underwriters say. The channel will be modelled on Cable News Network (CNN) the US global news channel. The company also plans to launch a Chinese-language channel in the US.
PhoenixÆs revenue rose 80% to HK$315 million in the year ended 31 June 1999 from the year earlier period. The company expects to post a profit of HK$4 million in the year ending 30 June 2000.
