VisionChina Media, Inc. (VISN) Q1 2012 Earnings Call May 8, 2012 8:00 p.m. EDT Executives Colin Wang – IR Director Limin Li – Chairman and CEO Stanley Wang – SVP of Finance Analysts Julian Cheung – Morgan Stanley Chenyi Lu – Cowen & Co. Dick Wei – JPMorgan Presentation Operator Ladies and gentlemen, thank you for standing by for VisionChina Media’s first quarter 2012 earnings conference call. (Operator Instructions). Today’s conference is being recorded. If you do have any objections, you may disconnect at this time.
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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. In the first quarter of 2012, as anticipated, the company saw quarter-over-quarter decrease in revenue, largely due to the Chinese New Year holiday. Despite this seasonality and other pressures of the quarter, advertising service revenue reached $28.3, exceeding the company’s guidance. In the first quarter of 2012, we celebrated VisionChina Media’s seventh anniversary. As a company growing from a small startup, VisionChina Media has become the market leader in China’s mobile television industry. Boasting an influential media network across China, VisionChina Media’s distinctive model and its impact on the development of media in China have been groundbreaking, and we have benefited from strong and stable relationships with the Chinese government. Most recently we have begun exploring ways to lead the development of the new national media and advertising industrial park to be based in Shenzhen that will be fully funded by the central government and municipal government of Shenzhen. The project will support the development of a large industry cluster that would include companies that serve various media functions such as concept design, content and programming, advertising production, as well as many others. As the ultimate leading developer of this program -- project, VisionChina Media will benefit from the collective cooperation of the companies in this area. With central and municipal government bodies paying close attention to the development of this project and supporting the initiative, there would be additional opportunities for VisionChina Media’s long-term growth. Turning now to our media network development, the implementation of our proven cost control initiatives continues, including our proactive approach to control costs, developing our core media resources. In addition, we are deepening our penetration into tier 3 and tier 4 cities through plausible agency agreements that allow us to expand our media coverage and enhance our ability to support multinational and domestic brands in their product promotion and sales in those region without increasing our fixed media costs.
The Chinese government is promoting a development of a new massive public transportation system in the tier 2 cities such as Wuhan, Suzhou and Hangzhou. These cities are preparing to open new subway lines, and VisionChina Media has initiated preliminary discussions regarding cooperation in these cities. We plan to conduct further research in this region to assure a favorable cost structure that will provide a solid base for future growth if we choose to add this new system to our existing network.To update you all on our external cooperation regarding technological development, VisionChina Media has successfully obtained new patrons in the development of television’s core hardware technology. Some of them such as broadcasting monitoring tools, noise reduction and interactive systems have already been put into use on our platform, greatly enhancing the viewing experience of our mobile television audience while increasing advertising effectiveness in this era of new media technology innovation. We have also made strides in programming innovation. We have recently been authorized to jointly broadcast more public service announcements for CCTV, thereby enhancing VisionChina Media’s public credibility and value as a public media platform. In addition, we have further strengthened our cooperation with various leading satellite TV stations in China. By leveraging this relationship to broadcast highly-rated and customer-tailored content from these stations and leveraging the public’s appreciation for public service announcements, VisionChina Media is creating secondary advertising sales opportunities for such programming. This type of cooperation allows us to cultivate VisionChina’s media value and create new revenue opportunities. Read the rest of this transcript for free on seekingalpha.com