VisionChina Media Inc. (VISN)
Q3 2012 Earnings Call
November 15, 2012 7:00 PM ET
Colin Wang – Director, IR
Limin Li – Chairman and CEO
Stanley Wang – CFO
Chris Luan – Merrill Lynch
Wei Fang – CLSA
Gillian Chan – Morgan Stanley
Previous Statements by VISN
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I will now turn the call over to your host for today’s conference, Mr. Colin Wang, Investor Relations Director for VisionChina Media.
Hello, everyone. Welcome to VisionChina Media’s third quarter 2012 earnings conference call. The company’s third quarter 2012 earnings results were released earlier today and are available on the company’s IR website at www.visionchina.cn as well as on Newswire services.
Today you will hear from our Chairman and Chief Executive Officer, Mr. Limin Li, who will talk about our industry, our company strategy and business operations; and Mr. Stanley Wang, our Chief Financial Officer, who will take you through our financials and key operating metrics. After their prepared remarks, Mr. Li and Mr. Wang will be available for your questions.
Please note that today’s discussion will contain forward-looking statements made under Safe Harbor Provisions of the US Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today. Further information regarding these and other risks and uncertainties is included in our Annual Report on Form 20-F and other documents filed with the US Securities and Exchange Commission. VisionChina Media does not assume any obligation to update any forward-looking statements except as required under applicable law.
As a reminder, this conference is being recorded. In addition, a webcast of this conference call will be available on VisionChina Media’s Investor Relations website at www.visionchina.cn.
I will now turn the call to our CEO, Mr. Li.
Hello, everyone, and thank you for joining us today. In the past seven years, VisionChina has undergone rapid growth in its early days and great expansion in recent years which has brought us both good and challenging time to company. Adapting our lessons learned through with the challenges for the current VisionChina Media operating environment has helped us to established revive the business initiative. They are guiding our future development. Our aim is to operate China’s largest nationwide mobile television broadcasting network.
In yet another economically challenging quarter was cautious sentiment in the advertising market. VisionChina Media has remained committed to achieving our overall internal targets. Total revenues in the third quarter of 2012 were up 18.2% quarter-over-quarter to $33.2 million, meeting with company’s guidance.
In the third quarter we firmly pursue our media platform optimization and cost control plans and restructure our acquired media assets that have high fixed cost and faster growing annual increases. In prior years, it’s terminated several unfavorable exclusive agency agreements acquired through Digital Media Group that had resulted in significant losses including those for the Hong Kong Airport Express line, Kowloon-Canton Through Train, Shanghai Intelligent Transport Information Signboards and Shenzhen Subway Line 1 in-train media assets.
In the third quarter we restructured the original exclusive agency agreement with Shanghai Metro TV which also – which was also acquired from Digital Media Group under the new contract, VisionChina Media pays media cost, pays only advertising minutes purchase, which releases us from unreasonably high fixed media costs and resulting gross loss in Shanghai.
The restructuring of our Shanghai Subway contract is an important step in our overarching plan to optimize media resources and control costs associated with our media platforms. We would continue to conduct close evaluations of our current media assets and engage in mutually beneficial negotiations with our local operating partners to assure a more favorable structure and provide a solid basis for our long-term growth while avoiding any negative impact on customer demand or our market presence.
Interesting and engaging content, whether it be satellite TVs most famous program Triple Growth making its first debut on our media platform or the mobile television industry’s latest fit for the voice of China air on Jun Satellite TV and our media networks remain vital to the success of TV media. Being the only outdoor extension of traditional TV, we are fully tapping into the potential of the TV content available on our media platforms. We’re also set up a programming innovation center and invite it to talented industry experts Mr. Huimin Zhang and Mr. Zhenhong Xie to join our company in the third quarter.
Their decade of extensive experience in TV programming innovation, large scale event planning as well as advertising marketing will be extremely beneficial to the development of our new programming innovation center.
Prior to joining VisionChina Media, Mr. Huimin Zhang, one of the key founding members of Huimin Satellite TV was also the head of its advertising department. During his tenure, overseeing the advertising department, its advertising revenue was ranked among the top eight provisional Satellite TV stations in China.
Mr. Zhenhong Xie is the Senior TV programming and innovation expert with extensive knowledge regarding television operations and comprehensive industry connections at home and abroad. He was also the programming director in two well known satellite TVs. A number of TV programs he produced and operated have received national prizes and are highly regarded within the industry.