26/09/2008 RedHot Media International Limited
26 September 2008
The London Stock Exchange is delighted to welcome RedHot Media International Limited to AIM.
RedHot Media International Limited, a media broking group incorporating an innovative barter sales trading activity in Malaysia and China, is being admitted to AIM via an introduction with an expected market capitalisation on the first day of trading of £29.6 million.
The majority of RedHot’s activities relate to it acting as a media broker in Malaysia; purchasing advertising space on behalf of its clients and earning commissions from the media providers based on the amount of advertising purchased.
RedHot also acts, to a lesser extent, as a non-stockholding distributor for certain clients (for whom it also acts as a media broker) with the intention of generating higher margins for the Group than would be obtained in conventional media buying.
Using this distribution based business model (AxChange), RedHot enters into a contract to draw down various lines of inventory and then, as the inventory is sold through RedHot’s distribution network, the proceeds from the sales are used to purchase media space for the same client.
The AxChange business model has been designed to free up working capital; allowing RedHot’s customers to pay for advertising and assist new entrants into Malaysia (where capital controls are still in place) in selling their products using RedHot’s established distribution network. RedHot also believes the model provides benefits to its distributors; providing them with lower unit prices and access to credit facilities to which they otherwise would not have access.
The Company aims to extend this model to work in other Asian countries; firstly in China (initially opening offices in Beijing, Shanghai, Guangzhou and Macau) followed by Vietnam (initially opening offices in Ho Chi Minh City and Hanoi).
Group Managing Director Cheong Chia Chieh said today-
“We are delighted to begin trading on AIM. As a global company intending to expand further in Asia we believe AIM will present significant opportunities for RedHot Media, enhancing our credibility and stature in the media industry as we prepare to move forward. As a result, we aim to provide steady news flow over the next six months as we aggressively set out to grow the AxChange model and extend our reach.”
Blomfield Corporate Finance Limited is acting as nominated advisor to RedHot Media, with Religare Hichens, Harrison acting as broker.