Chinese outdoor TV advertising company Focus Media Holdings Ltd saw a strong rise in its stocks on their first trading day on the NASDAQ in New York , with investors having high expectations of the Chinese technology and media market.

The Shanghai-based firm sold 10.1 million American depository shares (ADSs) on the NASDAQ and raised US$17.7 million from the offering.

Its stock price rose by almost 19 per cent to US$20.20 from the initial public offering (IPO) price of US$17 on Wednesday.

"We are very excited to see the offering become so successful, our IPO price is above the previous range and the market reception was so positive," said Chen Jie, an investor relations officer with Focus Media, who was in New York for the listing.

Jim Sun, a technology and media analyst with Evolution Securities, said the high growth potential of the firm is a major factor in the success of the IPO.

According to CTR, a Sino-French joint market research firm, Focus had 77 per cent of LCD displays in commercial buildings in 13 Chinese cities. The company gets most of its income from selling LCD advertisements and made revenues of US$9.6 million in the first quarter and profits of US$2.6 million. Both figures were more than double the revenue and profits made in the first quarter of 2004.

Sun said Focus Media and its closest competitor Target Media, backed by the US investment giant Carlyle Group, take the overwhelming majority of the outdoor TV advertising market in China , with Focus Media taking 70 per cent of the pie.

With its dominance of the market, the company's long-term prospects are rosy.

According to Sun, Focus Media's advertising slots for the whole of 2005 were all booked.

In the first quarter, the company had more than 680 customers and 180 of them were new clients.

However, Sun pointed out that a risk for the firm is that the leases on many of its buildings will expire in 2007 and, with the increasing demand for office space, the landlords might want to raise the prices of the leases.

Focus Media is one of two hot Chinese IPOs in recent months.

Baidu.com Inc, a top Chinese search engine provider, also filed an IPO application to the US Securities Exchange Commission.

Goldman Sachs Asia, Credit Suisse First Boston, and Piper Jaffray are underwriters of the deal.

The company, known as the Chinese Google the US search engine giant owns 2.6 per cent of Baidu did not specify how many shares and at what price it and its shareholders will sell them at.

But it is expected to sell about 10 per cent of its shares in the offering and aims to raise approximately US$80 million.

To do that, Baidu, which would like to emulate Google's success, might price its stocks at a price more than 100 times its price earning ratio per share, which was 5 US cents in 2004. The profit earnings ratio for most Internet companies is around 30 times.

Sun believed that this will be a challenge to the firm and underwriters, since its profits are still quite small and it faces intense competition from other firms like NASDAQ-listed Sina Corp, Sohu.com, Yahoo! China and Google.