We are a digital media company that operates in Hong Kong, providing integrated advertising solutions to advertisers ranging from multi-national brand owners, advertising agencies to SMEs primarily through our Digital Media Platforms. We produce and distribute contents on diverse areas of interest under our different well-known and popular media brands. Coupled with our strong digital media presence, including our own websites and mobile apps as well as on third party social media platforms such as Facebook, Instagram, Youtube and LinkedIn, we are able to reach and attract different types of audience, which in turn generates value for our advertisers. To complement our Digital Media Platforms we still maintained, though with diminishing importance as compared to our digital business, the publication of some magazines and travel guidebooks in which advertisers can also place advertisements. With our reach to audience of different categories on multiple media platforms we are able to offer integrated advertising solutions to and cater for the different advertising needs of our clients and monetise the traffic generated by our contents on our Digital Media Platforms and audience’s interest in our print publications into our revenue. According to the Euromonitor Report, our Group ranked second amongst online advertising companies in Hong Kong for three consecutive years of 2020, 2021 and 2022 in terms of revenue with a market share of approximately 1.9%, 1.8% and 1.8% respectively.
Our media brands
During the Track Record Period and as at the Latest Practicable Date, our Group operates nine (9) media brands, namely “新假期” (Weekend Weekly), “東方新地” (Oriental Sunday), “經濟一週” (Economic Digest) and “新 Monday” (New Monday/NM+) which started off as print magazines in the early 2000s and have a strong heritage, as well as More, GOtrip, Sunday Kiss, and the two more recent brands SSwagger and Madame Figaro introduced in 2018 and 2019 respectively. They offer contents ranging from lifestyle such as dining and local attractions, gourmet and gastronomy, fashion, beauty and travel, entertainment news, kids and parenting, electronic gadgets and gaming to designer and luxury labels, finance and investment related contents.
We have strong digital presence with millions of subscribers that follow our contents on our Digital Media Platforms. As at the end of the Track Record Period, the total number of followers of the Facebook fanpages and Instagram profiles operated by our Group has exceeded 7.4 million and 1.2 million respectively; for the year ended 31 December 2022, our 9 websites recorded unique visits of over 219.7 million with cumulative web impression reaching over 4.2 billion. In 2020, our Group has launched seven mobile applications for “Weekend Weekly”, “Economic Digest”, “More”, “Oriental Sunday”, “Sunday Kiss”, “GOtrip” and “New Monday” respectively, and has achieved a total acquisition of approximately 1.4 million as at 31 December 2022.
Our advertising business
We offer integrated advertising products and services which can be distributed on both our Digital Media Platforms and in books and magazines we publish. We provide a wide spectrum of advertising products and services including display banners, advertorials and reviews, social newsfeeds, creative and production across our Digital Media Platforms and in our print circulations, whether alone or in different types of combinations or even as part of an advertising campaign to achieve maximum exposure and publicity. Other than conventional advertising products, we also utilise features of search engines to provide strategic services including segment marketing and SEO which helps our clients rank their information higher in search engines and improve their online visibility. We offer flexibility in our product offerings and services such that advertisers can pick and choose the specific or combination of products and services that best suit their marketing objectives and budgets, and we may be engaged directly by the advertisers and brand owners themselves or through advertising agencies. Our charges for tailor-made integrated advertising solutions are negotiated on project basis depending on the products purchased by and services to be provided to the client, taking into account factors including the prevailing standard rates (where applicable) on our rate card, the budget of the client, time duration and scale of the advertising campaign, our cost for providing the services, the client’s relationship with our Group including the frequency and volume of the client’s past engagement(s) and future business opportunities with the client. We price our products and services by taking into account various factors including market demands for our services and products, client’s budget, the market rates and costs of providing the relevant services.
On the other hand, we also have programmatic advertising service agreements in place with various digital partners (i.e. the SSPs) under which we offer our available advertisement inventories (i.e. the number of advertisement or amount of advertisement space available for sale to advertisers) to these SSPs for pairing up with offers made by advertisers on the SSP’s platforms. Our Group, as publisher, acts as the platform for displaying the advertisements allocated by the SSPs platforms and we do not produce any content for these advertisements. Since programmatic advertisement is basically an automatic bidding for our advertisement inventory on SSPs’ platforms, our Group will usually specify a floor price (in terms of CPM) for advertisement inventories on our Digital Media Platforms. Driven by the bidding process, advertisement of the advertiser with the highest bidding CPM will be placed to respective advertisement inventories on our Digital Media Platforms through respective SSP’s platform. Programmatic advertising revenue from sales of our advertisement inventories on our Digital Media Platforms is determined based on a pre-agreed portion of the aggregate CPM (i.e. the highest bids in terms of CPM) generated from respective SSP’s platform from time to time. Such revenue sharing portion is based on the terms and conditions with each SSP. During the Track Record Period, the whole of our programmatic advertising revenue was derived from SSPs.
Our print media business
During the Track Record Period, we published four magazines, being (i) the 3-in-1 Oriental Sunday Magazine (combined with Weekend Weekly magazine and New Monday magazine) on a weekly basis (which ceased publication with the last issue in December 2020), (ii) Economic Digest Magazine as a weekly magazine, (iii) since third quarter of 2019, Madame Figaro Magazine as a quarterly magazine and (iv) in 2021, the Weekend Weekly x GOtrip Magazine as a quarterly magazine (though the 2022 issues were cancelled in view of reduced overseas travelling during this period).
The retail or cover price of each of our print publications is determined taking into account the cost of production, prevailing market price for publications of similar market positioning and demand for our publications. Our publications are primarily sold to the Distributors at pre-agreed discounts to the retail or cover price of the publications determined based on industry norms. For details of the distribution arrangements between our Group and the Distributors, please refer to the section headed “Business – Production Workflow – Distribution of magazines and books” of this document.
During the Track Record Period, our income is derived principally from the provision of integrated advertising solutions which are primarily distributed on our Digital Media Platforms and, with diminishing proportion, our print publications. For each of the three years ended 31 December 2022, our income derived from (i) the digital advertising business represented approximately 85.2%, 94.6% and 95.2% of our total revenue respectively; (ii) the circulation of our publications represented approximately 8.9%, 1.4% and 1.2% of our total revenue respectively; and (iii) advertising in our publications represented approximately 5.9%, 4.0% and 3.6% of our total revenue respectively.
Our revenue generated through Facebook for the financial year ended 31 December 2022 dropped by approximately HK$16.6 million, i.e. approximately 11.0%, as compared to that for the year ended 31 December 2021. Such drop was primarily due to the drop in advertising revenue from the cosmetics and skin care, toiletries and household, pharmaceuticals sectors and the hotel, travel and tourism services sectors in view of the stringent social distancing measures introduced following the outbreak of the fifth wave of the COVID-19 pandemic, and Facebook is a popular social media platform for advertisers in these sectors to conduct their advertising campaigns. For details of the breakdown of our non-programmatic advertising revenue by industry sectors for the Track Record Period please refer to the section “Financial Information – Discussion and Analysis on Principal Items in the Consolidated Statements of Profit or Loss and Other Comprehensive Income – Advertising” of this document.
On the other hand, our revenue derived from our own websites for the financial year ended 31 December 2022 shown a significant growth of approximately HK$11.7 million (i.e. approximately 30%) from that for the year ended 31 December 2021, and revenue derived from our apps also showed a steady growth from that of the year ended 31 December 2021. As disclosed in the paragraph below, in 2022 we endeavoured to drive organic traffic to our websites and apps by both search engine optimisation and generating more branded contents. We believe this led to a growth in our programmatic advertising revenue generated from our own websites and also enabled us to increase our advertising inventories for direct sale to our non-programmatic advertisers, especially those who were not so affected by the fifth wave of the COVID-19 pandemic.
Source: New Media Lab (01284) Prospectus (IPO Date : 2023/06/30) |