Phoenix New Media Limited (FENG)

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Phoenix New Media Limited (FENG)

Q1 2013 Earnings Call

May 14, 2013 9:00 PM ET

Executives

Matthew Zhao – Investor Relations Director

Shuang Liu – Chief Executive Officer

Ya Li – Chief Operating Officer

Lily Liu – Chief Financial Officer

Analysts

Alex Yao – Deutsche Bank

Julia Chung – Morgan Stanley

Jiong Shao – Macquarie

William Huang – Barclays

Eric Qiu – Guosen Securities

Presentation

Operator

Ladies and gentlemen, thank you for standing by and welcome to the Phoenix New Media First Quarter and 2013 Earnings Call. At this time, all participants are in a listen-only mode. There will be a presentation followed by a question-and-answer session. (Operator Instructions) I must advise you that this conference is being recorded today, Wednesday, 15 May 2013.

I would now like to hand the conference over to your first speaker today, Mr. Matthew Zhao. Thank you. Please go ahead, sir.

Matthew Zhao

Thank you, operator. And thank you and welcome to Phoenix New Media first quarter and fiscal year 2013 earnings conference call. I am joined here by our Chief Executive Officer, Mr. Shuang Liu; our Chief Operating Officer, Mr. Ya Li; and our Chief Financial Officer, Ms. Lily Liu.

For today’s agenda, management will provide us with a review on the quarter and also include a Q&A session after the management’s prepared remarks. The first quarter 2013 financial results and the webcast of this conference call are available at the Investor Relations sections of www.ifeng.com. A replay of the call will be available on the website in a few hours.

Before we continue, I refer you to our Safe Harbor statements in our earnings press release, which applies to this call, as we will make forward-looking statements. Finally, please note that unless otherwise stated, all figures mentioned during this conference call are in Renminbi.

With that, I would like to turn the call over to Mr. Liu Shuang, our CEO.

Shuang Liu

Thank you, Matthew. Good morning and good evening everyone. We are very pleased to announce our first quarter 2013 financial results which exceeded consensus estimated for both top-line revenues and the bottom-line net profits.

For the first quarter of 2013, we outpaced other major internet portals in terms of user traffic growth making iFeng one of China’s fastest growing internet portals.

Despite the first quarter is our seasonally weakest quarter for our online advertising sales, we still grew advertising revenue by over 29% year-over-year to approximately RMB166 million, well ahead of the internet display advertising market growth average of 14.6% according to iResearch.

Our strong momentum in online ad revenue drove our total revenue growth which increased by over 18% year-over-year to RMB283 million.

With that today I would like to discuss three key topics with you. First, our significant user base expansion, along with our premium content offers. Second, our efforts to further expand our mobile internet operations and third update on our gaming business.

First, our user growth dynamics and content offering, along with China’s accelerated modernization and integration with the global community, our Chinese leaders have showed greater interest in news coverage on social and political peers that increasingly matters in the daily life, such as domestic issues, geopolitics, diplomatic issues and global current affairs.

Meanwhile, China’s rising educated middle-class are also hungry for unbiased, high-quality and intensive news coverage and professional journalism that will help them make the important decisions for them and the family lifestyle decisions, investments, education and other matters.

From a voters perspective, the professional journalism that iFeng strives to provide with the current healthy courage active participation of public opinions, the societal developments and encourage citizens in decision-making of social areas with defining our mission development priorities.

Against this macro factor of independence and professionalism in news coverage and our expertise in covering key verticals such as finance, auto and technology has been increasingly valued by China’s mainstream audience and evidenced in our strong user growth that I will elaborate on lately.

Our strong media DNA and prominent brand image enable us to truly stand up in China’s media landscape that is open the place with homogenous media coverage. Driven by users strong demand for our – in the first quarter our photo growth rate continued to significantly outpace our peers.

According to iResearch for March 2013, our average daily visitors rose 49% year-over-year to 34 million user visits in contrast with at a time of at least 10% for the rest of major peers daily unique visitors in the same period.

Meanwhile, according to iResearch, in terms of average monthly user timestamps that also grew over 7% year-over-year and remained one of the fastest growth portal in China. This strong user growth has enabled to further capture market share from other major competitors in terms of user traffic and user stickiness, it’s more users spending more time on our site.

Regarding our video example, we remained a leader of professional source on news content among all of China’s leading sites as discussed earlier this greater traffic growth is a testament of our variety influence and the feel at the reliable and an effectible media source in China.

It also demonstrates our huge growth potential in advertising as we continue to include our ad solutions offerings, traffic have increased our utilization.

Throughout the first quarter we continue to deliver comprehensive media coverage of major news events and issues that can play along China and the world. In our own site and signature style that is characterized by portal and in-depth analysis. iFeng remains the premier online destination especially for white collars and educated viewers who seek soak provoking and high quality content.

Read the rest of this transcript for free on seekingalpha.com