At the time of this interview, Tommei TongÆs title of CFO of Hong Kong-listed Tom Group was on the point of lapsing following her recent promotion to the CEO spot.

ôComing from a CFO background after three years with the company is a big advantage. I know the people and the process,ö says Tong, one of Hong KongÆs most charismatic senior executives.

TomÆs bottom line is looking pretty healthy these days. In the first half of last year, the media conglomerateÆs total revenue rose 18% year-on-year to HK$1.4 billion and EBITDA came in at HK$179 million, up 11% year-on-year.

The nature of this growth is replete with ironies. Recall that Tom Group was initially listed in March 2000 at the height of the dotcom boom with the moniker tom.com. Following the collapse of the dotcom bubble there was a rush to refocus the company on traditional media û the subtext being that de-emphasizing the internet business made good sense in a far less forgiving investor environment.

Spinning off the internet business as Tom Online in 2004 (on Hong KongÆs Growth Enterprise Market) seemed a neat solution. The tactic would reassure investors that a highly volatile sector was quarantined off and in the meantime tom.com, renamed Tom Group, would build up a portfolio of reassuringly traditional media businesses û which is why today Tom Group encompasses outdoor media, sports marketing, publishing, and TV entertainment, alongside a 66.7% stake in Tom Online.

Given the dodgy record of the online sector, it is all the more surprising that it is the internet business, which focuses on mainland China that has become the mainstay of the groupÆs earnings.

From being the disreputable black sheep of the Tom family, Tom Online has indeed become the star. In 2004, for example, the internet contributed HK$989 million to total revenue of just over HK$2.5 billion. Publishing, outdoor media, sports and ætelevision and entertainmentÆ followed in descending order of importance, with only publishing in the same order of magnitude, with a contribution of HK$909 million.

The main reason for the success is the companyÆs ability to sniff out just the kind of exciting, trendy and cheap mobile phone services that todayÆs youthful wireless addicts crave. From short messages to downloadable jokes, photos, pictures and horoscopes, the company has generated growth literally out of the ether û and with very little capital investment, given this is not a capital-intensive, high R&D expenditure business.

For Tong, this success has become something of a challenge, given that by some estimates over 90% of the valuation of Tom Group is powered by separately listed, Tom Online. As things stand, Tom Group is given very little credit for its non-internet divisions.

Look at the market capitalizations: Tom GroupÆs was HK$6.5 billion at the beginning of February, compared to HK$9.2 billion for Tom Online, despite the formerÆs almost 70% share in the latter and its ownership of the other four divisions.

There are several ways to respond to this situation.

One solution might be to privatize and delist Tom Group, thus transforming it into a traditional holding company. But, says Tong, ôthat would not be in the interest of our shareholders who bought Tom Group at the IPO price.ö Indeed, Tom Group launched at just over HK$7 before quickly doubling, and is currently trading at HK$1.68.

Instead, says Tong ôwe are striving to differentiate Tom Group from Tom Online. The best way to do that is to ensure that the other four divisions generate such good growth so that they stop being overshadowed by Tom Online.ö

A look at the non-internet divisions provides some intriguing clues to the future development of the group. It clearly wonÆt be easy to replicate the soaring success of Tom Online in China. Publishing, for example, is the second biggest earnings generator û but itÆs focused on Taiwan. Taiwan has a far more liberal and, for want of a better phrase, information-friendly environment than China.

Tong argues that censorship is not a problem on the mainland, especially given the companyÆs focus on ænon-controversialÆ businesses such as entertainment and business. However, the atmosphere with regard to creativity, artistry, intellectual freedom and self-expression in China is so tainted that one might well ponder how easy it will be to beef up the publishing business in China, however many savvy managers and great titles migrate over from Taiwan.

The TV and entertainment business faces many of the same issues. And both businesses face a Chinese government increasingly hostile to foreign players snapping up Chinese assets.

ôHowever, that makes our existing ownership of China Entertainment Television all the more valuable,ö points out Tong.

The TV channel is supposedly focused on Guangdong province but in fact has achieved penetration much further afield. The channelÆs Mandarin focus makes it possibly more likely to succeed nationally than its Hong Kong competitors ATV and TVB, which transmit in Cantonese. The unit managed to narrow losses last year and is set to break even this year.

The sports marketing business does not suffer from these problems. Tom owns all the rights associated with the China Open, for example, such as ticketing, broadcasting and advertising. The business is still young, but the recent focus on high profile F1 and motorcycle events in China, not to mention the Olympic Games of 2008, suggests the sector is set to boom. Tong plans to build numerous auxillary events around the China Open to maximize revenue.

Outdoor media may not appear especially exciting, but advertising has been growing even faster than GDP in China. Outdoor advertising accounted for 8% of ChinaÆs advertising spend in 2004. Spare capacity can also provide synergies, such as using spared capacity to advertise sporting events that Tom sponsors.

Investors have been warned. Under the fresh leadership of Tommei Tong, what was once an undervalued quasi-holding company could be on the cusp of finally unlocking its considerable hidden value.