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VisionChina Media Inc. (VISN)
Q1 2010 Earnings Call
May 10, 2010 8:00 pm ET
Limin Li - Chairman & CEO
Scott Chen - CFO
Colin Wang - Director of IR
James Lee - CLSA Asia Pacific Markets
Ming Zhao - SIG
Philip Wan - Morgan Stanley
Eddie Leung - Banc of America
Paul Keung - Oppenheimer
Warren Wong - Hayman
James Marsh - Piper Jaffray
Dick Wei - JPMorgan
» VisionChina Media Q3 2009 Earnings Call Transcript
» VisionChina Media Q2 2009 Earnings Call Transcript
I’ll now turn the call over to your host for today’s Mr. Colin Wang, Investor Relations Director for VisionChina Media.
Hello, everyone, and welcome to VisionChina Media’s first quarter 2010 earnings conference call. The company's first quarter earnings results were released earlier today and are available on 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 discuss our company's strategy, and business operations, and Mr. Scott Chen, our Chief Financial Officer, who will take you through our financials and some key operating metrics after their prepared remarks Mr. Li and Ms. Chen will be available for 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 over to our Mr. Li.
Hello, everyone and thank you for joining us today.
The first quarter of 2010 was the most challenging quarter we have seen in all years as a public company, despite the changes, the total revenue in the first quarter of 2010 was US$23.4 million being the company’s guidance of no less than US$22 million for the quarter.
On the completion of our acquisition of Digital Media Group, we have close to 100% market share of subway mobile TV market and stronger pricing power. Therefore, we have made significant increases to our rate cuts in several key subway cities including Shanghai.
These significant increases did cause some clients to hesitate in the spending in the first quarter. However, more recently we have seen that at the time of revaluations, our clients have began to recognize the value of newly integrated media platform that combines both above and below ground networks on buses and subways in cities across China.
We saw a strong upward trend in late March, with international brands such as P&G, Amway and L'Oreal, significantly increasing the advertising spending with us towards the end of the first quarter.
With the first quarter of the hiring loss, we had to see further increases in advertising spending and have signed a number of annual contracts recently as well and large customers such as Unilever and Amway have continued their spending on media platform.
With the strong growth there of domestic of FMCG brands such as, Hangzhou Wahaha are already advertising with us. The quality of our platform has been further affirmed by adding new well known brands such as Nike, Red Bull, [Genivar] and (inaudible) to our list of clients. Moreover OMD one of the largest 4A agencies in China also signed a year-long contract with us as did Zenith Media and (inaudible) two other major media agencies operating in China.
All eyes in China are currently on Shanghai as the Shanghai World Expo open on May 1. Domestic and international advertisers alike are perusing this rare opportunity to actively promote their brand. At VisionChina Media, it’s the only public mass transit TV media platform at Shanghai.
We are seeing that in addition to a congressional advertiser large state-owned enterprises such as Sinopec have begun advertising with us. And several government entities such as the municipal government and Tourism Bureau of (inaudible) have leveraged the opportunity in Shanghai to foster their cities image, at high investment and the increased tourism.
Having taken giant steps in media network investment, we have also maintained an active compensational relationship with Beijing Subway operator. Currently, Beijing’s operator is in the process of upgrading their digital TV network transmission capabilities on certain lines and this process is going to take longer than expected. Therefore, a prior expiration of our current contract in June 2010, we expect to extend it again for short period. Ground network and subway line upgrade is complete; we do expect to sign a long-term contract with Beijing subway that will include all of Beijing’s subway lines.
Going forward we’ll continue to focus our sales strategy on providing high quality and effective advertising services to multinational corporations an large scale domestic companies. We’ll also continue to pursue local market opportunities to enhance network utilization with customized products such as sponsor T.V programming and soft advertising to satisfy diversified client needs.