While most global news companies are struggling to survive in the internet world, China’s official media is having a golden era.
One of the bright spots on the A-share market these days is People.cn, the online version of the People’s Daily, whose shares surged 243% in the past month to a four-year high.
In 12 of the last 15 trading sessions, the shares of the Communist Party mouthpiece surged to a daily limit of 10%. The Shanghai-listed company now has a market capitalization of 34.74 billion yuan (US$5.18 billion), or an incredible 380 times historic earnings.
To put it into perspective, it is worth more than the total market cap of all Hong Kong media that includes Television Broadcasts, Apple Daily and a dozen others.
People.cn said investors should be mindful of their risks in light of the big trading volume and turnover.
Owned 48.8% by the People’s Daily Group and 8.31% by the Global Times, the company said it would report revenue growth of between 100% and 140% last year, thanks to the growth trend of the third-party censorship business.
People.cn is tasked with censoring the content of the online media from the major platforms operated by internet giants such as Baidu, Alibaba and Tencent.
This was virtually a licensed insurance business for online media in the age of increasingly tighter control from Beijing. One such example was the closure of a blogger Mi Meng, who claimed to have more than 10 million fans.
Mi Meng had published an article titled the death of a poor No.1 scholar, which was criticized by a People’s Daily’s official on weibo as overselling worries to get their fans. Mi Meng was quick to apologize for its commentary, but it could not save them from being blocked.
That perhaps can explain how influential the People’s Daily is and further proves why companies were happy to pay it to secure their content.