VisionChina Media, Inc. (VISN) Q1 2011 Earnings Call May 05, 2011 8:00 pm ET Executives Colin Wang - Director, IR Limin Li - Chairman & CEO Stanley Wang - VP, Finance Analysts Philip Wan - Morgan Stanley Eddie Leung - Merrill Lynch Nan Li - SIG James Lee - CLSA Chenyi Lu - Cowen & Company Dick Wei - JPMorgan Presentation Operator
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 CEO, Mr. Li. Limin Li Hello everyone and thank you for joining us today. VisionChina saw success in line with our expectations in the first quarter of 2011. Total revenue reached $32.5 million, a 39.1% increase over the first quarter of last year and the company continued to achieve gross profit. Anticipated seasonality caused revenue to slide sequentially by 27.5%. As we celebrated our sixth year of operation in the first quarter of 2011, the company was pleased to note two favorable indications from independent parties. First the 2011 Global Advertisers Congress known as the World Expo of Global Advertising was held in China for the first time. During the event VisionChina was analyzed by a board of leading international and domestic industry experts that evaluated the company’s media influence, market value and growth potential. VisionChina was the only new media company placed in the grand prize category. The other placed in that category were China’s two leading satellite TV stations namely Hunan Satellite TV and Jiangsu Satellite TV. We are proud to have being recognized by the industry for the value of our media platform. Second, in the Autumn 2010 China Marketing & Media Study, subway and bus TV Media was ranked at the number one most influential out-of-home digital media platform, that in reach as high as 44.7%.
The week-long study was carried out in China’s major city and included all media platforms. In terms of reach, subway and bus TV was ranked number three, right behind the country’s most important TV station CCTV-1 and CCTV-3.As the market of VisionChina’s nationwide mobile TV media network mature, more third party research study is being conducted. These studies consistently support VisionChina’s intent to establish industry standard and also highlight the effectiveness and reach of our platform enhancing our growth processes. In terms of new revenue stream growth, in recent years we have seen a surge in new types of internet-based businesses such as social networking, group (inaudible) and video share website. These types of companies promote their brands and products aggressively across various channels. Without vast reach, high conversion rates of viewership to transaction, accurate targeting and massive coverage that reaches hundreds of millions of commuters daily, VisionChina has become a beneficiary of the growing advertising spending related to these emerging businesses. We have seen revenue growth potential in IT and internet advertising spending verticals as a result of recent placements by these new brands. As discussed in previous quarter, VisionChina has established cooperation with various leading satellite TV stations around China. By leveraging these relationships to broadcast highly rated and custom tailored content from these stations, VisionChina is creating secondary advertising sales opportunities for programming. We are also actively working with our satellite TV partners to promote trailers for top rated shows such as one called Happy Girls, which is a hit on Hunan Satellite TV to be played on our bus and subway networks. Leveraging VisionChina’s highly effective broadcasting capability to support their marketing campaign, these satellite TV stations are able to influence audiences’ brand perception and increase viewer ratings. We are confident that these partnerships will become another revenue growth area for VisionChina.
In terms of media platform maintenance and expansion, we have recently renewed our exclusive contract to operate on Guangzhou subway system for the next five years. The new contract includes all of Guangzhou’s existing subway lines and the extensions of those lines as well as new subway lines.Read the rest of this transcript for free on seekingalpha.com