CCME, VISN , and the industry:
- About VISN : They are trying to integrate an acquisition that they paid alot of money for but was not super profitable. As a result they are restructuring their sales team. There bus routes are "inner" city, whereas CCME's are from city to city. VISN was priced to perfection at over 20 forward P/E. CCME is priced at 5-7 forward P/E. CCME has stated twice there fourth quarter was exceptionally strong. They have 100m in cash, no debt and are targeting 100% growth in 2010 for net income after they will have done it in 2009 (next earnings release imo). Most likely an accretive acquisition is coming or they will use the cash to grow organically. Let's say CCME only grows net income to $1.50 EPS next year instead of targeted $2 eps. They would be trading at an 8 P/E with 50% earnings growth. Chinese companies with that growth usually have a 20+ P/E. Even at a lame 10 P/E CCME should be $15+.
CCME Feb 8th/2010: Jacky Lam, CME’s Chief Financial Officer stated, “As anticipated, we believe our 2009 fourth quarter was exceptionally strong. We expect to announce 2009 fourth quarter and year-end results in mid-March.”
VISN - The company expects several factors will hamper revenue, including a sales force restructuring and the integration of subway advertising company Digital Media Group, which is recently bought.
In a note to clients, Susquehanna analyst C. Ming Zhao downgraded the stock to "Negative" from "Neutral" and set a $4.50 price target.
Zhao said that while the company's fourth-quarter earnings met analyst estimates, its outlook "shocked" investors. He thinks that the company's guidance, coupled with an expected $29 million in first-quarter costs and expenses, will lead it to report a loss this year.
As you can see VISN's problems are related to VISN.
AMCN is also an out of home China advertising Company and here is what they said (they were up $1 today):
"We are inspired by the strong recovery of advertising expenditure of our customers, which is reflected in our first quarter 2010 revenue guidance. In general, the first quarter is the lowest quarter of the year for advertising due to the Spring Festival, with revenues showing a sequential drop from the fourth quarter of the previous year. However, so far this year, due to strong demand from advertisers, we have not experienced the usual seasonality. We expect the recovery in advertising to continue throughout the year based on feedback from our advertisers indicating their confidence in the Chinese economy and confirming incremental advertising budget increases at the beginning of the year. We believe the valuable media resources we captured during the recent economic downturn will bring significant commercial benefits and turn 2010 into a year of harvesting," continued Herman Guo.
Towona is another non-public bus advertiser and this is what they said about 2010:
Looking into 2010, following the expansion of public transport resources and consolidation of its position in the industry, TOWONA is full of confidence about its development. China expects the advertising revenue in 2010 to grow by 9.8% in China, and foresees that the advertising market will regain prosperity, which provides strong support for the bus-dependent television industry. Significant improvement in advertisers' recognition and the new national policies regarding traditional TV advertising also create opportunities for mobile TVs. Furthermore, major events including the Asian Games, World Expo 2010 and the World Cup will fuel the performance of bus- borne TV operators represented by TOWONA.
"TOWONA will benefit a lot from the recovery of the market and opportunities to arise in the future. Meanwhile, we will set an eye on the competition environment of the industry, so as to identify potential targets of mergers and acquisitions," Gareth Chang added finally.
TOWONA Media
AI
