Focus Media (002027.SZ) plans to launch a listing plan in Hong Kong.
On November 4, Focus Media issued an announcement stating that in order to further promote the company's internationalization strategy, enhance the company's core competitiveness, and expand financing channels, the company plans to issue overseas listed foreign shares (H shares) and apply for listing on the Hong Kong Stock Exchange Co., Ltd. main board.
If Focus Media (referred to as "Foundus") is successfully listed on the main board of the Hong Kong Stock Exchange, it will be the first domestic ladder media company to realize the "A+H" dual financing platform . In addition, Focus Media is one of the few companies in China that have been listed on the three major exchanges of US stock , Hong Kong stock , and A stock .
"failed" Focus Media
Focus Media was born in 2003 and created the elevator media advertising model. Under the "superb" capital operation of the founder Jiang Nanchun , it set sail for the first time and was a great success.
In 2005, Focus Media, which was established for only two years, successfully logged on to Nasdaq with the halo of "the first stock of China's media", and became a "popular young actor" of , a Chinese stock listed in .
, which went overseas for the first time, had a "training" by Jiang Nanchun, and his appetite was wide open. In less than two years, he ate more than 60 companies and set off a wave of "focused" in the United States.
In October 2005, it acquired China's largest apartment elevator poster company - Framework Media for US$183 million; in January 2006, it acquired the second largest building media company in China for US$325 million, and also a competitor of Focus Media - Juzhong Media; in March 2006, it acquired mobile phone advertiser Kaiwei for US$30 million, and later reorganized into Focus Media Wireless. ;In August 2006, it acquired the theater advertising company ACL and renamed it Cinema Network; in December 2006, it acquired the country's largest university print media operator - Power Media; in March 2007, it acquired the largest agency of China's online advertising - Haoye for US$299 million; in December 2007, it spent US$168 million to acquire the store digital advertising network company Xicheng Media, etc.
It is reported that from 2005 to 2007, Focus Media successively invested and acquired more than 60 companies, costing about US$1.6 billion.
The continuous growth of Focus Media with the "buy, buy, buy" model has made Jiang Nanchun's capital ambitions much bigger. In 2007, Focus Media wanted to acquire Sina by stock exchange, claiming that it is the second only to CCTV and Shanghai Cultural and Television . Then in 2009, the merger between Focus Media and Sina failed due to miscarriage.
What is worth the most is that Jiang Nanchun likes to acquire companies that are about to IPO, and he is very generous in his actions. For example, the acquisition of Haoye Xicheng Media in 2007 is enough to prove this. The advantage of acquiring an upcoming IPO company is that the asset generally has good development prospects and business models, has high capital recognition, and is easy to be recognized by the market.
Jiang Nanchun is precisely because he seized this market preference that Focus Media, which went overseas for the first time, has set off a wave of investment "Foundary Hot" on Nasdaq, and its stock price has been pushed to an all-time high of US$65.
However, good times didn't last long.
With the outbreak of the financial crisis in 2008, the 315 Gala exposed spam messages, the initiator "Foundus Wireless" business was shut down, and the asset acquisition performance was not as good as expected, and a series of negative news followed one after another, and Focus Media's performance and stock price were double-killed. According to statistics, Focus Media's stock price fell by 85% in 2008.
When the performance was poor, Focus Media began to do "subtraction", divesting a large number of assets that failed in mergers and acquisitions, and claiming to return to its main business.
According to statistics, as of the end of 2010, the total acquisition of Focus Media was about US$1.6 billion, and the total asset write-off amount exceeded one-third of the value of Focus Media's existing enterprise. This has also become one of the important handles for shorting Focus Media by in organization Muddy Waters, and one of the reasons for the US SEC's investigation into Focus Media.
In 2011, Muddy Waters "raided" Focus Media, throwing more than 80 pages of shorting report, firing the first shot of shorting.Among them, there is a short discussion on Focus Media's previous acquisition of assets. Muddy Waters pointed out that Focus Media's high premium acquisition led to high losses, and it is recommended to sell the stock.
Starting from the end of 2011, after five confrontation with Muddy Waters, Focus Media finally "defeated" short sellers, and its stock price changed its decline and rebounded steadily. However, when the outside world believed that Focus Media's stock price would steadily improve with its performance, Jiang Nanchun suddenly played a "privatization" card.
In 2012, Focus Media proposed privatization; delisting in May 2013 means that Focus Media's eight-year life in Haidian has come to an end, and it is also standard that Jiangnan Spring returns to the voyage and bets will be opened.
Back to A: After the painstaking Focus Media
was privatized and delisted in the United States, Jiang Nanchun and the investors also signed a series of betting agreements with . According to the privatization agreement, the privatization and acquisition agreement mentioned that if the company has not relisted in the fourth year of the completion of the privatization of Focus Media, shareholders and Giovanna Group Holdings (GGH) will distribute at least 75% of the profits to shareholders in accordance with the provisions of the financing agreement, as well as the company's cash and the company's continued operations.
This means that if Focus Media has not relisted within four years after the completion of privatization (2016), more than 75% of the company's profits will fall into the pockets of the acquisition of GGH.
is based on the collaboration of against and the time is tight. Jiang Nanchun will naturally not use the IPO method with a long review cycle, but will instead use the "backdoor" method with simple procedures and processes and the shortest time to log in to the A-share market .
In 2015, Focus Media, which had been away from the secondary market for two years, suddenly announced a backdoor Hongda New Materials , but the two parties failed to reach an agreement, and Focus Media failed to acquire the first backdoor quit; in just three months, Focus Media quickly "flashed" Qixi Holdings , which was in a loss-making state. The restructuring was approved by the China Securities Regulatory Commission in December 2015.
With the FX that has gone through several twists and turns, it also means that Jiang Nanchun's return to A has been announced to be successful in his gamble.
It is worth noting that, like the first time I landed on Nasdaq, Focus Media, supported by many halos and "bright" performance, is sought after by investors in the secondary market. At that time, Focus Media won the love of retail investors in A-shares with the gimmick of "Chinese stocks returning to the first A-listed stock", with its stock price soaringly, and its total market value exceeded 100 billion mark, turning into an advertising giant of 100 billion yuan.
However, in the next few years, Focus Media's stock price trend was as everyone saw, opened high and closed low and . Even though the performance has improved greatly from the past, the stock price has never exceeded the high point of the backdoor listing stage. On the contrary, the stock price is sluggish. As a result, there are more and more questions from outside doubts and investors' concerns.
For example, Focus Media has always been detained as the title of "King of A-share share reduction".
It is understood that in 2017 alone, the four overseas shareholders of Focus Media reduced their holdings by 49 times, a total of 1.325 billion shares, and a total cash withdrawal amount of up to 15.195 billion yuan. Focus Media is therefore called the "king of A-share share reduction" in 2017. By 2018, the reduction of holdings remained unchanged. The former founder of Qixi Holdings, Yi Xianzhong, reduced its holdings by 5.5518 million shares again, with a cash-out amount of approximately 75.9258 million yuan, causing Focus Media's stock price to fall again and again. When the stock price of
was sluggish, Focus Media launched a 3 billion buyback plan to boost the stock price. However, the 3 billion repurchase plan did not go smoothly and there were major adjustments. The original plan was to repurchase no more than 3 billion yuan in 2018, but adjusted to repurchase no more than 2 billion yuan in 2019, with the final repurchase amount of 1.53 billion yuan.
In addition, the "monopoly" position that has always been proud of by the market. With the introduction of the monopoly law and the addition of new competitors, the market has begun to worry about the development situation of Focus Media. In particular, the competitor Xinchao Media , which has been backed by Internet giants such as Baidu , JD , has developed very rapidly in recent years, causing market concerns about Focus Media's leading position and pricing power.
Not only that, the education and real estate industry, which has invested in the main force in advertising in the past, is currently facing policy adjustments. The demand for advertising may be significantly reduced in the future, which will have an adverse impact on the overall advertising industry.As Focus Media, whose revenue comes from advertising, performance sustainability has also caused market concerns.
Under this background, Focus Media, which achieved good performance in the first three quarters, still has difficulty improving its stock price and is tending to decline. As of November 5, 2021, Focus Media's share price was 7.43 yuan per share, and the share price has fallen by 22.17% since the beginning of the year. Why did
start to go public in Hong Kong at this moment?
Choose to open up the "A+H" dual financing platform at this moment, and Focus Media seizes the opportunity, which is very accurate.
In the second half of this year, the number of listed companies choosing to open up the "A+H" dual financing platform has increased. Since the beginning of this year, 7 companies have opened up the "A+H" dual financing platform. Among them, the "A+H" dual financing platforms were successfully opened in the first half of the year, including Chongqing Bank (601963.SH) and Zhaoyan New Drug (06127.HK), while there were as many as 5 companies in the second half of the year (July 1 to October 4), namely CIMC Vehicle (301039.SZ) (01839.HK), Fudan Microelectronics (688385.SH) (01385.HK), China Telecom (601728.SH) (00728.HK), Times Electric (03898.HK) (688187.SH), and China Energy Construction (03996.HK) (601868.SH).
As of now, in the A and H stock markets, more than 10 leading stocks plan to open up the "A+H" dual financing platform. Among them, the majority of companies are "A first and H", and there are 9 companies that have already submitted their bills in Hong Kong, namely disposable glove leader Yingke Medical (300677.SZ), the leader in tourism and retail industry China Duty Free (601888.SH), the leader in cobalt powder industry leader Hanrui Cobalt Industry (300618.SZ), and the leading companies in CRO fields Kelly Integrated (002821.SZ), leader in consumer electronic precision functional parts industry Yizhi Manufacturing (002600.SZ), leader in rare earth permanent magnet industry Jinli permanent magnet (300748.SZ), known as "Medical Beauty Moutai", Aimeike (300896.SZ), the global titanium dioxide leader Longbai Group (002601.SZ), and Huaxin Cement (600801.SH), the cement leader in East China.
Taking advantage of the general trend of "A+H" dual financing, Focus Media launched the opening of the "A+H" dual financing platform, which is conducive to the closer linkage of stock prices in the A and H markets, and the valuation repair is expected to be comprehensively improved. Specifically, A+H will be listed in , Hong Kong Stock Connect, and . The liquidity and trading volume of corporate stocks may increase significantly, and it is expected to usher in valuation recovery.
Therefore, when the stock price is sluggish, opening up the "A+H" dual financing platform not only provides sufficient "cash" ammunition for Focus Media to go overseas for food, but also provides an opportunity for its valuation repair.
