This penny share is dreaming of Gangnam success

Boris Johnson has done it; David Cameron has done it; Google's executive chairman, Eric Schmidt, has done it; UN secretary-general Ban Ki-Moon and Terry Wogan have done it. Do you know what I am talking about? If not, let me give you a clue:

I'm a guy

A guy who is as warm as you during the day

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A guy who one-shots his coffee before it even cools down

A guy whose heart bursts when night comes

That kind of guy'

I can only hope that these under-inspiring lyrics have lost something in translation from the original Korean version of Gangnam Style' the pop sensation that has become the most watched YouTube video ever.

According to one critic this is a "hilarious video layered with cheesy, but memorable dance moves, an infectious pop tune and most importantly, Psy's wild personality". And what did I think? Well actually I thought it a load of old rubbish. But then I don't suppose that K-Pop, of which Gangnam Style is the most famous iteration, is aimed at stuffy old men like me. Instead it is aimed at Asia's super-cool younger generation, and they are lapping it up.

Acts like the Wonder Girls, 2NE1 and BigBang have them screaming in the aisles in what has been described to me as the biggest explosion of pop music since the Beatles burst forth from Liverpool's Cavern Club in the 1960s.

How to become a K-pop star

Korea is the most wired nation on earth, meaning I guess that everybody goes around with their eyes firmly fixed on a small screen, and so it is the perfect place to launch entertainment products through contemporary media channels. If there is one thing that Korea is good at, it is manufacturing, and the country now has a production line of glossy pop stars.

Nothing is left to chance. K-pop trainees have lessons in singing, dancing and acting. They learn Japanese, Chinese and English and are given media coaching. Trainees are forced to follow strict curfews, diets and dating rules. One agency even forbids its female trainees to have boyfriends or consume any food or water after 7pm.

Suddenly it does not sound as much fun after all! But training brings success, success brings fame and fortune and, especially for the promoters and agents, loads of money. K-Pop is now going beyond Asia and hitting the top of the charts in the USA and elsewhere. And one penny share company is getting a share of the action.

I first wrote aboutParallel Media Group(PAA) back in May. It is a strange stock market creature with the sort of spotty record that tends to distinguish companies that are dominated by a chairman who owns 35% of the company in this case David Ciclitara.

Hoping for a bit of stardust

Over the years, Parallel Media has principally been involved in sports promotion, most notably through its staging of the Korean Golf Championship, a European tour event sponsored by Ballantines and attended this year by 45,000 people. Its Smart Media division makes it possible for sports and entertainment to be rolled out in multiple languages on any smart media platform or viewing device. This "cutting edge service" (I quote) features "sophisticated front-end interfaces, in-depth back-end data mining and live video on demand, high definition streaming coupled with e-commerce facilities, high definition image galleries and social network integration" which all sounds good, although whether it makes any money is another matter.

But the immediate excitement for Parallel will come on 5 January when it promotes a K-Pop concert at Hong Kong's Expo Arena, featuring the bands Beast, A Pink and 4Minute. It has already hosted two such events in Singapore but this one, and in fact an entire K-Pop tour, is being sponsored by AIA Insurance, which no doubts reckons it could transform its staid image and gain street cred with the younger generations by lining up with the writhing pop stars.

As ever with Parallel Media, the corporate strategy seems to be a bit of a moving feast, and the way that it makes money is not especially clear. But David Ciclitara for one thinks that the shares, now at 10p, are undervalued. He bought shares for himself at 14.92p at the end of October, and persuaded HW Alpha PTE Ltd to take an 18 month option to subscribe for 900,000 shares at 35p.

At 10p Parallel Media is valued at just £2.3m. So far it has hardly had the success of Gangnam Style. But maybe 2013 will be the year when a little stardust rubs off onto its share price.

This article is taken from Tom Bulford's free twice-weekly small-cap investment email The Penny Sleuth. Sign up to The Penny Sleuth here.

Information in Penny Sleuth is for general information only and is not intended to be relied upon by individual readers in making (or not making) specific investment decisions. Penny Sleuth is an unregulated product published by Fleet Street Publications Ltd.