Shares of people.com.cn surge after promise of 40% revenue growth

Shares of people.com.cn, the online news portal of the People's Daily, the organ of the CPC Central Committee, rose by the daily limit of 10 percent to close at 46.16 yuan ($7.28) in Monday trading after the website was reported to set a robust business growth goal for 2013.

Senior management from the news portal has promised investors it will realize a 40 percent year-on-year growth in revenue and profit this year, as well as a 50 percent year-on-year growth in Internet traffic, Hong Kong-based financial news agency aastocks.com reported Monday, citing attendees at an investor conference held Friday by the firm.

The news website also has plans for mergers and acquisitions (M&A) in the next few months, the report said.

The Shanghai-listed news portal's investor relations office was unavailable for comment on the issue Monday.

People.com.cn might conduct M&A in the advertising sector, aastocks.com quoted Huang Chi, a media analyst at China Galaxy Securities, as saying.

Considering that mobile value-added services is people.com.cn's major focus field, the firm could be interested in acquiring a company in the mobile Internet sector, Zheng Ping, an analyst at Minsheng Securities, said in a research note published in March.

People.com.cn posted a profit of 34.38 million yuan in the first quarter of 2013, a 57.91 percent year-on-year growth. During the period, its revenue also surged 55.14 percent from a year earlier to 187 million yuan.

"As the only publicly traded State-owned news portal, people.com.cn has enjoyed lots of policy advantages," Zheng said.

But the news website still faces risks of decreasing advertising revenue given the weakening macroeconomic environment, he noted.

Xinhuanet.com, the online news portal of State-owned Xinhua News Agency, handed its IPO application to the China Securities Regulatory Commission in January, raising market speculation that it would become the second State-owned news website to get listed.