Tom Group Limited · HKEX:2383
Tom — Merger or Acquisition (May 2001)
32 slides from Tom's merger presentation, May 15, 2001
Slide 1: Building The Largest Chinese Print Media Group
Building The Largest Chinese Print Media Group 15th May 2001
Slide 2: Introduction
Introduction
Slide 3: Highlights of the Transaction
Highlights of the Transaction Reorganization of PC Home & Cité § The businesses of PC Home and Cité will be consolidated into NewCo Investment § TOM to acquire a 49% interest in NewCo through subscription of new shares and purchase of existing shares Valuation § NewCo is valued at NT$2,656 million (
Slide 4: TOM's Cross Media Strategy fully established
TOM’s Cross Media Strategy fully established TOM Cross Media Telecom VAS Outdoor Online Sports Print 49% NewCo 100% 100% PC Home Cit 4
Slide 5: NewCo's Mission & Competitive Strengths
NewCo’s Mission & Competitive Strengths § To become the largest Chinese-language print media company in the industry • Extending the successful PC Home & Cité franchises into the Mainland China • Growth also by acquisitions, especially in Mainland China • Make NewCo an open platform welcoming new pa
Slide 6: Integrating the best resources from Mainland China, Taiwan & Hong Kong
Integrating the best resources from Mainland China, Taiwan & Hong Kong § Media experience & talent § Proven management § Track record of successfully launching magazines & books § Great market potential § Access to Hong Kong capital markets and financing § Strong shareholder backing 6
Slide 7: A Shorter Path to Profitability
A Shorter Path to Profitability Revenue Taiwan Cost Timing Revenue § With the experience built up by New potential PC Home and Cité in Taiwan, markets NewCo will have a shorter learning period in the Mainland (particularly China and be able to generate Mainland China) strong cashflow in a minimum am
Slide 8: Introduction to PC Home & Cité
Introduction to PC Home & Cité
Slide 9: PC Home – Fastest Growing Magazine Group in Taiwan
PC Home – Fastest Growing Magazine Group in Taiwan Capturing the Hearts of the Young § PC Home has become the largest magazine publisher in Taiwan in just over 5 years § More than 16 magazines and periodicals including bestsellers such as PC Home ( ), Smart ( ) and Business Next ( ) § Total circulat
Slide 10: About PC Home
About PC Home Magazine Name Circulation Frequency English Name Chinese Name Date of Launch (copies) PC Home 2/1996 125,000 Monthly PC Office 8/1997 80,000 Monthly PC Gamer 8/1996 45,000 Monthly Smart 8/1998 110,000 Monthly PC Shopper 12/1998 75,000 Monthly Download 5/1999 75,000 Monthly eWorld e 4/2
Slide 11: Sample Magazine Titles
Sample Magazine Titles PL cata KOE ceaic ™ ed bs a8 we 2 § 8 = 6
Slide 12: Cité – A Quality Publisher Catering to a Wide Range of Interests
Cité – A Quality Publisher Catering to a Wide Range of Interests § The largest book publisher in Taiwan in just over 4 years § Includes 18 publishers many of them are leaders in their field, like Grimm ( ) (one of the top selling children’s book publishers in the world) § Printed over 6 million copi
Slide 13: Sample Book Titles
Sample Book Titles ie FG) | SG i] oem DE RAY enisutotn «itt i & 2 Or MO sa HE TET 1g ANA de eae EB) 10 DTH +XRS 5 a ‘SIF The Marketing Bible
Slide 14: Track Record
Track Record Established Developing Combined Properties Properties 2000 2000 2000 PC Home Cité PC Home Cité PC Home Cité Revenue NT$'m 1,023 653 187 111 1,210 764 HK$'m 244 155 45 26 288 182 Gross Profit NT$'m 573 204 66 31 639 235 HK$'m 136 49 16 7 152 56 Total Assets NT$'m 1,126 680 106 n/a 1,232
Slide 15: Portfolio of Leading Brand Names
Portfolio of Leading Brand Names PC Home Cit PC Home PC Gamer Mook Rye Field PC Office Smart Owl Marco Polo PC Shopper Business Next Business Weekly Cube Download eWorld Pili Star East Smart Car Parenting Source Faces Red Ink Easy Books Hsin Lin H2O Books Grimm Oak Tree PC User Eco Trent 15
Slide 16: Post-Acquisition Group Structure
Post-Acquisition Group Structure § A simple unified structure that will be the platform for future expansion Post-Acquisition Existing Existing Shareholders Shareholders TOM TOM 51% 49% NewCo NewCo 100% 100% CIT CITÉÉ PC PC Home Home 16
Slide 17: Management of NewCo
Management of NewCo § Founder of PC Home & Cité Jan Hung Tze § CEO of PC Home & Chairman of Cité § 27 years experience in Taiwan media industry. He participated in the planning and editing of more than 1,000 books in his roles as either Editor-in-chief or Publisher of various media businesses § One
Slide 18: Management of NewCo (cont'd)
Management of NewCo (cont’d) Ho Fei Peng § 24 years of experience in journalism & publishing § Chairman of PC Home and CEO of Cité § Founder and Vice Chairman of Business Weekly ( ) before co-founding PC Home and Cité with Mr. Jan Su Shih Ping § Vice chairman of Cité Group since 1997 § Previously Ch
Slide 19: Market Potential of Print Media
Market Potential of Print Media
Slide 20: Taiwan has many small publishers while creating a giant market size
Taiwan has many small publishers while creating a giant market size No. of % of Value % Value Publishers Publishers (US$) Region million PRC 500 8.73% $3,450 57.00% Taiwan 5,000 87.27% $2,000 33.10% HK & Macau 200 3.50% $500 8.30% Others (Singapore, Malaysia, USA & Canada) 30 0.50% $100 1.70% Total
Slide 21: Potential Market in Taiwan and Mainland China
Potential Market in Taiwan and Mainland China US$ billion 14 12 In 2000, Taiwanese spent approximately 1.54% of their income on the purchase of printed reading materials. Given the 10 11.67 Mainland China’s estimated: • literate population of 1.03 billion (July 2000); 8 • GNP per capita of US$738 (1
Slide 22: Annual Print Spending per Reader in Chinese publications much lower than in English
Annual Print Spending per Reader in Chinese publications much lower than in English Readership Value Numbers (US$) million English 400 million $42,000 Chinese 1,400 million $6,000 120 Annual Print Spending Per Capita 100 US$ 80 105 60 40 20 4.3 0 CHINESE ENGLISH Source: Yazhou Zhoukan 22
Slide 23: Magazine Ad Spending in the Mainland China & Taiwan
Magazine Ad Spending in the Mainland China & Taiwan US$ million MAINLAND CHINA US$ million TAIWAN 7000 7000 6,461 Magazine Magazine Advertising Advertising Expenditure 6000 Expenditure 6000 CAGR - 19.5% CAGR - 9.59% 5000 5000 4,157 4000 4000 3000 3000 2,363 1,837 2000 2000 Magazine 1000 Magazine 100
Slide 24: Future Plan
Future Plan
Slide 25: Greater China Strategy of NewCo
Greater China Strategy of NewCo Mainland China § Focus on acquisition of existing successful properties § To own advertising and circulation businesses, but not editorial § Targeting IT, personal finance, learning and lifestyle, using proprietary contents where appropriate § To invest in city newspa
Slide 26: Operational Integration
Operational Integration Management § Management team to be led by Jan Hung Tze as CEO § CFO to be recruited by PC Home and agreed by TOM Expansion § Extension of PC Home & Cité’s franchises in the Mainland China § Leverage on distribution channels of both Groups to increase reach to Chinese readers
Slide 27: Future Vision of NewCo
Future Vision of NewCo NewCo Production & Distribution Distribution Taiwan PRC South-East Asia North America & Hong Kong & Europe PC Home Cité Other Media Acquisitions Tie with PRC Books Import & Export Acquisition of magazines, newspapers & publishing houses 27
Slide 28: Planned IPO
Planned IPO § NewCo will be ready to proceed to the next stage with its focused strategy and established business operations § NewCo will require new capital to support its next stage of development § Listing will provide an alternate form of currency for future acquisitions § Additional value creat
Slide 29: Next Steps for TOM
Next Steps for TOM
Slide 30: Next Steps
Next Steps CROSS TELECOM MEDIA VAS OUTDOOR ONLINE Fench CNTOM HKTOM 163.net Maya Cultural n Further acquisition of print media assets PRINT SPORTS n Expansion in Mainland China YC Companies Shawei n Integration with TOM’s other media assets n Future IPO of NewCo 30
Slide 31: Conclusion
Conclusion
Slide 32: Conclusion
Conclusion § Attractive price and deal structure § Strategic fit with TOM’s cross-media strategy § To develop NewCo into the largest Chinese language media platform in the Greater China Region § This acquisition will bring to TOM the best, and one of the most experienced, management team in the Chin