HONG KONG: Shares in Next Media, the parent group of Hong Kong-based Chinese-language newspaper Apple Daily, soared over 90 percent in early trading yesterday following news reports that its chairman plans to acquire a TV station in Taiwan.

Most of that surge - as high as HK$1.75 - was short-lived, though, and the stock closed up 8.7 percent to HK$1.12.

Next Media hopes to buy a TV station in Taiwan and was discussing acquisition prices. If the plan falls through, the company may set up its own telecast station on the island, according to The Hong Kong Economic Journal.

The Chinese-language journal said Next Media Group Chairman Jimmy Lai could announce his plan as early as this week.

Brokerage firm UOB Kay Hian upgraded Next Media to "buy" from "sell", with a target price of HK$1.30, based on the group's lower labor and material costs.

Next Media has cut staff expenses by 3.5 percent to save up to HK$40 million a year. And the spot prices of newsprint have fallen sharply from their peak of more than $900 per ton in July to $700 per ton now. Every 1 percent decline in the price of newsprint translates into a 3 percent increase in earnings, UOB Hay Hian said in a research report.

Next Media said the company wasn't aware of any reasons for the sharp share-price increase.

"We confirm that there are no negotiations or agreements relating to intended acquisitions or realizations that are discloseable under the listing rules," the company said in a statement to the Hong Kong stock exchange yesterday.

Ip Yut-kin, chairman of Next Media's Taiwan operations, told Taipei-based Central News Agency: "Next Media has contacted several Taiwan TV stations; some of them do not want to be sold, while others want to discuss the price. If we cannot agree on a price, Next Media will set up its own TV station".

The preparation for the Taiwan TV station and its operation will be handled by Next Media in Hong Kong, he said.

Lai has confirmed that he has picked King Pu-tsung, former deputy mayor of Taipei, as his chief executive to prepare for setting up his TV station.

(HK Edition 02/13/2009 page16)