The People’s Daily newspaper, published by the Communist Party of China, may lead a wave of state-run media going public as the government aims to reinvigorate official news organisations in the next five years, according to Bloomberg News.
People’s Daily Online Co Ltd., which operates the website People.com.cn, plans to sell 40 million shares at a price range of 15 yuan to 20 yuan a share in an initial public offering in Shanghai, China Daily reported today, citing an unidentified person. An official at the People’s Daily’s media hotline number who refused to give his name declined to comment on the report.
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People.com is one of 10 government-backed news websites that will “undergo reforms prior to public listings,” China Daily reported. The group also includes Xinhuanet.com and Cntv.cn, the report said. China is making the reform of state- run media one part of the 2011-2015 Five-Year Plan, Pi Shun, an analyst at Citic Securities Co., said in an interview recently. “It’s the same as with the reform of state-owned enterprises, the same truth,” Pi said. “China’s state-owned enterprises had to undergo market reform before they could have greater vitality.”
People’s Daily on December 19 also entered the news search business when its Goso.cn became operational. The official Xinhua News Agency in August also said it’s working on a search engine. “We aim to build People.com.cn into an internationally recognized website,” the China Daily report quoted Zhang Yannong, president of People’s Daily, as saying. Zhang couldn’t be reached for comment at his office by Bloomberg News.
People’s Daily is in the final stages of bringing in strategic investors for the share sale, China Daily reported. The company has been in talks with more than 10 potential investors and has already reached agreements with the nation’s three state-owned telecommunications carriers, China Life Insurance Co. and some domestic private equity funds, according to the report.
The listing in Shanghai is planned for the “beginning of this year,” China Daily said. The A-shares People’s Daily would sell are currently restricted to domestic investors. People.com had an estimated net profit of 70 million yuan ($10.6 million) last year that will rise to 100 million yuan in 2011, China Daily reported, citing Citic Securities, which it said will underwrite the IPO. Citic’s Pi told Bloomberg News there has been no formal announcement of a share sale.
“This would be a first for a large, official media organization in mainland China,” Pi said. “This is a comparatively big one. People’s Daily is like Xinhua. It has a high position in China.”
