Thursday, November 10, 2005

Asia's Hot Growth Companies

From Business Week online: Special: Check out Asia's hot growth companies

China: Tencent Holdings March of the penguin

"Tencent dominates China's instant-messaging market with a 60%-plus share, and that success is largely due to its cuteness quotient. It derives a big part of its revenue from sales of "avatars," cartoon characters that Tencent users pay to adopt as their online personalities. Tencent's official mascot is a chubby penguin named QQ, a cuddly character that Tencent has transformed into a heavyweight branding tool that's recognized by students nationwide."

"What impresses investors is Tencent's ability to build on instant messaging. The company has increased ad rates by 50% this year, and Morgan Stanley estimates that its advertising revenue in the third quarter was $3.6 million, up 16% from the second quarter. Tencent also charges for online games, dating clubs, and services such as data storage. "If you look at instant messaging and the ability to enhance services and generate revenue from them, Tencent is probably the leader in the world," says Morgan Stanley analyst Mary Meeker."

China: Focus Media Holding Ltd. Fast profits from slow elevators

"Sometimes, boredom is the mother of invention. Back in 2002, Jason Jiang was cooling his heels, waiting for an elevator in Shanghai. The ad exec had been looking for new advertising opportunities in China when inspiration suddenly hit him square in the eye. He was standing in front of a poster of sultry actress Shu Qi plastered on the elevator door. He quickly realized that if he could replace such simple posters with a video screen in elevator lobbies, he could grab lots of bored eyeballs -- and make good money giving them something to focus on. "Elevators in China are slow," says Jiang, now 32. "People spend an average of five minutes a day waiting for them. So Focus Media Holding Ltd. (FMCN) was born. "

"All those bored people watching Focus' screens have added up to big profits. Earnings in the first half of this year soared 159%, to $7 million, on sales of $24 million, up 190% from a year earlier. For the year, Focus could end up making $23 million on sales of $63 million. Next year, it could make profits of $46 million on $132 million in revenues, Goldman Sachs estimates. Those results have generated a lot of interest among investors. In July, Focus raised $172 million in a listing on NASDAQ. Since then, its shares have jumped by more than 50%."


Post a Comment

<< Home