Outdoor Ads Are on the Rise in China
HONG KONG -- Signs of strength are increasingly in view for outdoor advertising in China.
Billboards -- found in neon and lights everywhere from Guangdong province highways to the sides of Shanghai's city bus shelters -- are the only media sector in China not controlled by the state. But prospects in China's outdoor-media industry lately have been less than certain: The market is fragmented, with more than 80,000 outdoor advertising companies, and has been hit with intense price competition, as well as shifting regulation.
Now, there appears to be good news around the bend. Market researcher A.C. Nielsen announced that China's overall ad spending rose 21% in the first half of the year from a year earlier, despite steep television-rate increases and government advertising restrictions unveiled at the start of 2004. And CTR Market Research says spending on outdoor media in Beijing, Shanghai and Guangzhou rose an average of 60% in the first half, based on rate-card prices.
China's Tom Group has large-format billboards, like this one for China Telecom, in 30 Chinese cities.
Further, the sector's two leading Hong Kong-listed companies say they are on a roll. Clear Media, which is 48%-owned by U.S. media giant Clear Channel Communications, says it is on track to deliver double-digit earnings growth this year, after a 20% increase in 2003. This month, the company obtained the exclusive operation rights for all advertising panels in Terminal One of Beijing's International Airport, a boon in the lead-up to the 2008 Summer Olympics there.
On Thursday, the multimedia conglomerate Tom Group said its unit involved in outdoor advertising in China reported first-half revenue up 13% from a year earlier while earnings before interest, taxes and depreciation rose 5.4%. This month, its executives predicted revenue from China billboards would be 60% to 70% higher this year than in 2003.
Even with fears about a softening Chinese economy, few worry that the industry will lack for business. Clear Media Chairman Steven Yung argues that advertising will continue to grow because brand advertising plays a crucial role when competition heats up. "In the end, consumers have the choice between brand A and brand B," he says. "And our business is front and center in that decision."
Instead, investors worry that China's extreme market fragmentation -- there are more than 80,000 outdoor advertising companies -- encourages bad managers to strip rates, thus cutting profitability.
"The sector is very fragmented. In China, anybody can put up a billboard," says Norman Lowe, director of portfolio management at Mansion House Asset Management, of Hong Kong.
Still, the outdoor companies risk uneven regulation by provincial governments, which may want to get into the business themselves or decide that billboard messages are unhealthy or unpatriotic. A directive by China's central government this year to end cigarette advertising also could damp business, and provinces have interpreted the law unevenly.
Market leaders Tom and Clear Media have worked to skirt these problems by acquiring their way into dominance of niche categories where a new competitor's barriers to entry are relatively high.
Clear Media placed its big bet on bus-shelter advertisements, the supply of which is limited by contracts with the government. The company has a 98% market share for bus shelters in Shanghai, which is locked up in government contracts of as many as 15 years. "London has about 10,000 bus stops, but Shanghai only has 2,500 today despite [having] double the population. We could easily see 20,000 bus stops in Shanghai," Mr. Yung says.
Tom Group's outdoor unit has become the biggest broker of large-format billboards, with a spread over 30 cities. "Our advantage is our size," says Sam Lam, the vice president of Tom's outdoor unit. "We can provide one-stop outdoor service solutions."
中国户外传媒业大放光芒
中国户外传媒市场开始显现出良好迹象，从上海到广东，从高速公路到公共汽车候车亭，每当入夜，到处都闪烁著镶嵌著霓虹灯的广告牌，这是传媒领域里唯一不由政府直接掌控的领地。
但是，最近投资中国的户外传媒类股票很需要耐心：目前这块市场还很分散，价格竞争也非常惨烈，而且监管规定也经常变化。过去5个月中，这类股票的股价下降了三分之一到二分之一。
不过，眼下似乎有一些很不错的消息。市场调查公司AC尼尔森(A.C. Nielsen)公布，今年上半年，中国的广告支出总额较去年上半年增加了21%。虽然今年初电视广告收费大幅提高，政府也颁布了加强广告内容管理的指导意见，但这些并未阻止广告收入的增长势头。CTR Market Research也表示，上半年，北京、上海和广州三地的户外广告支出按价目表标价计算平均增加了60%。
而且，在该行业处于领先地位的两家在香港上市的公司都表示，他们的业务势头越来越好。白马户外媒体有限公司(Clear Media)充满信心地说，今年他们的利润肯定能实现两位数的增幅。去年他们的盈利增长了20%。美国传媒业巨头Clear Channel Communications持有该公司48%的股份。这个月，该公司获得了北京首都国际机场1号候机楼的独家广告经营权。随著北京2008年奥运会日益临近，这笔业务将让他们受益匪浅。
多媒体集团TOM集团(Tom Group)周四说，其在大陆的户外广告子公司上半年收入为1.59亿港元(合2,040万美元)，较上年同期增长13%，利息、税项和折旧前利润增长了5.4%，达到3,900万港元。公司管理人士本月预计，今年全年来自大陆的户外广告收入将较去年增加60%-70%。
同时，有分析师表示，户外广告公司的股价已经跌到位了。上个月末，雷曼兄弟(Lehman Brothers)上调了对白马户外媒体的评级。该公司分析师斯蒂芬?麦克基文(Stephen McKeever)说，该股现在的估价很有吸引力。它现在的本益比水平与国际同行接近，但很明显，它的增长前景更好。
白马户外媒体目前的本益比是38倍。周四收盘时，其股价为5.95港元；雷曼兄弟的目标价是7.20美元。
当2001年12月白马户外媒体、媒体伯乐(Media Partners International)和媒体世纪集团(MediaNation)先后在香港上市时，投资者对中国广告业的长期发展潜力感到非常振奋，这股情绪推动了这类股票急速上涨。但在后来的18个月内，由于投资者担心广告公司过多过滥，盈利会被稀释，广告类股价格大幅跳水，少则下跌40%，多则几乎一文不剩。到2004年初，由于广告费上涨，广告公司的股价开始攀升。虽然今年以来除Tom集团之外，所有广告类股都有所上扬，但它们当初的涨幅大都所剩无几。
虽然有人担心中国经济增长会放慢，但几乎没有人认为广告业会没有业务做。白马户外媒体主席戎子江(Steven Yung)认为，广告业务将继续增长，因为随著市场竞争加剧，广告对一个品牌的市场表现将起到至关重要的作用。他说，当消费者要在两个品牌之间作选择的时候，广告的作用将对他的最后选择起到决定性作用。
但投资者担心的是，中国广告市场过于分散，全国有大大小小8万多家户外广告公司，难免会有一些操守欠佳的经理人相互杀价，导致广告业整体利润下降。
由于投资回报不理想，香港万胜资产管理公司(Mansion House)6个月前卖掉了在媒体伯乐的全部股份。该公司投资组合主管诺曼?罗尔(Norman Lowe)说，大陆的广告市场太杂。好像任何人很容易就能开家公司，到外面竖广告牌。
户外广告公司还面临著另一种风险，那就是，各地方政府的管理规定很不一致。有些地方想自己控制这些业务，有些地方则希望自己有权决定哪些广告内容不健康或者不符合国家利益。今年早些时候，中国政府发出通知，禁止发布香烟广告，这条规定可能也会影响业务，而各省对这项规定也有不同的理解。
而像Tom和白马户外媒体等处于领先地位的公司已设法避开了这些问题，他们现在的业务大多在门槛相对较高、其他新公司进入难度很大的市场。
分析师们很看好白马户外广告公司，因为它的业务主要集中在公共汽车候车亭广告，这部分业务要受政府合同限制，业务量有限。该公司在上海获得了98%的市场份额，它与政府的合同签了15年。董事长戎子江说，伦敦有1万个候车点，而上海现在才有2,500个，今后增加到2万个应该没问题。
Tom的户外广告公司则另辟蹊径，它现在是大陆最大的大型户外广告代理机构，在30多家城市都有代理权。公司副总裁Sam Lam说，他们的优势在于规模，能提供一站式的户外广告全面解决方案。
一些大型机构投资者说，他们都很关注长期增长前景。比如，华平创业投资(Warburg Pincus Ventures)一直希望在中国传媒领域有所作为，于是在1996年就投资了媒体世纪，当时媒体世纪是第一家获准在中国全国范围经营业务的外资公司。
华平创业投资投资经理孙强说，短期内户外广告业的服务收费和业务能力可能会承受一定压力，但从长期来看，广告业必将健康成长，对此他们非常乐观。中国的消费领域将继续增长，因此，对（广告这类）与消费者实现接触的需求也将随之增长。
