Chinese Sports Daily is the only national sports magazine with distribution network all over the country. It is also the only designated sports magazine for circulation to PRC officials, and the influence of the newspaper is expected to be further boosted by the upcoming 2008 Olympic Games. To satisfy the demand and interests of the readers, the editor of the newspaper has designated special editorial section to feature the latest news of the international renowned sports stars and Olympic gold medal winners, including Yao Ming, Liu Xiang, Yin Wei Na, Tian Liang, Guo Jing Jing, etc. The special editorial pages will feature interviews and reports on their lifestyle, thinking, training process and latest achievements, etc. Each national star will be featured several times each year. Under the agreement, QJY will exclusively own all the rights of advertising agency for the special pages and features for these national and up-and-coming sports stars.
"This is another achievement of QJY as we expand the business to non-TV media. As the whole nation is zealously longing for the staging of the Olympic Games in 2008, there is more attention drawn to sports activities. There is growing interest in China on the sport stars and Olympic medal winners who bring glory to our country. QJY is therefore extremely excited about our appointment by 'China Sports Daily' as the exclusive advertising agent for the special feature section. We expect to generate a satisfactory stream of advertising revenue from such rights. In addition, QJY also obtains the exclusive first rights of refusal to handle related public relations or promotion activities. The agency arrangement will serve as our vehicle to stage related after-school-and-work sports activities for the young sports fans, which will bring in an additional source of revenue to the Group. We will also make use of all the advertising platforms we have access to in the PRC to help promote the newspaper and thus truly accomplish the target of achieving cross-media synergies," said Dr Anita Leung Fung Yee, CEO of QJY.
According to Dr Leung, it is expected that QJY will be able to enjoy revenue from the advertising rights starting from June 2006, or the last quarter of QJY's 2006 financial year. It is estimated that by 2007, revenue generated from these advertising rights will not be less than 3% of the Group's total revenue. In terms of investment, the price earnings ratio should be less than 3.
Dr Leung further comments that the core business of the Group is expanding faster than expected. The Group anticipates to procure more investments in TV drama series in the second half of financial year 2006 and estimates that such investments will exceed by about 1/3 of the original budget. The planning of and procurement of investment in top quality large scale TV drama series have so far been in line with the roadmap set for the Group after listing. Such drama series are scheduled for broadcast at prime time on both channel 1 (main channel) and channel 8 (movie and drama channel) of CCTV or major TV provincial stations.
About Qin Jia Yuan
Qin Jia Yuan Media Services Company Limited (HKEx: 2366) is a China-focused one-stop shop for TV media services, providing integrated programme, distribution, advertising and marketing and public relations services to production houses, advertising agencies and advertisers. The Group was listed on the main board of the Stock Exchange of Hong Kong on June 30, 2004 following a successful initial public offering. Its strategic shareholders include Aegis Group plc, a public company listed on the London Stock Exchange and one of the world's five largest media groups.