In their 10Q they segment their revenue into advertising and tourism.

For Q3 they had:

Advertising - $8.5 MM
Tourism - $5.5 MM
Net income $7.2 MM

For the nine months they had:

Advertising - $23
Tourism - $14


So the tourism revenue is expanding quickly because they recently opened a new developed site, and Yunding Park is soon to be open as well. Given this information I did very rough calculations for 2010 of:

Advertising $36 MM
Tourism $29 MM
Total: $65 Million revenue for 2010

Net Margins were 51% in Q3 and 53% in first nine months.

So using 50% gets you $32.5 million, or $1.63/share.

The extra $0.12/share comes from the realization that the Yunding Park revenue is unknown and therefore not included, and the train advertising revenue is included with no growth.

I personally think they will get closer to $2.00/share, but feel quite safe with my $1.75/share estimate.

CNYD - selling $0.32 below recent offering.

If you haven't started building a position, consider it now. Tremendous value with an excellent business model. They have three lines of business:

1) TV station - advertising revenue generated on 4th highest rated station in Fujian Province. Extremely high profit margins of 50+%.

2) Develop and manage tourist destinations, with emphasis on natural and historic wonders such as parks, lakes, heritage and cultural sites etc. Significant upfront costs to develop, low maintenance costs going forward since not like a theme park where you have to add a new ride every year to keep people coming back. The historical or natural significance of the destination keeps drawing people in year after year.

3) Trains - advertise via on-board screens through 20 minute tourism destination infomercials. "Journey through China on the Train" (an advertisement-embedded travel program, currently the only on-board media program from third party authorized by Ministry of Railways). Plus the average trip length for the train passengers is over 11 hours, so that is a captive audience who will view the segments multiple times on the same trip. Should create a high retention rate for the disseminated information with the programs. The revenue from this is just beginning, but it's resemblence to the business model of CCME should not be overlooked.

4) Advertising expense competitive advantage. They use their tv station and the train segments to promote their tourist destinations. Very cost effective marketing, and allows for high exposure rate. The exponential increase in attendance at their tourist destinations shows this strategy has been highly effective.

Summary:

Think of the business model as a mini-Disney. All the cross-selling and integration creates a strategic competitive advantage which can be easily scaled to include new acquired tourist destinations in the future.

Presently selling at $11.18.

Approx. 20 million shares outstanding after recent offering.

I expect 2010 eps to be roughly $1.75 or higher.

Forward PE of 6.4

CNYD - selling $0.32 below recent offering.

If you haven't started building a position, consider it now. Tremendous value with an excellent business model. They have three lines of business:

1) TV station - advertising revenue generated on 4th highest rated station in Fujian Province. Extremely high profit margins of 50+%.

2) Develop and manage tourist destinations, with emphasis on natural and historic wonders such as parks, lakes, heritage and cultural sites etc. Significant upfront costs to develop, low maintenance costs going forward since not like a theme park where you have to add a new ride every year to keep people coming back. The historical or natural significance of the destination keeps drawing people in year after year.

3) Trains - advertise via on-board screens through 20 minute tourism destination infomercials. "Journey through China on the Train" (an advertisement-embedded travel program, currently the only on-board media program from third party authorized by Ministry of Railways). Plus the average trip length for the train passengers is over 11 hours, so that is a captive audience who will view the segments multiple times on the same trip. Should create a high retention rate for the disseminated information with the programs. The revenue from this is just beginning, but it's resemblence to the business model of CCME should not be overlooked.

4) Advertising expense competitive advantage. They use their tv station and the train segments to promote their tourist destinations. Very cost effective marketing, and allows for high exposure rate. The exponential increase in attendance at their tourist destinations shows this strategy has been highly effective.

Summary:

Think of the business model as a mini-Disney. All the cross-selling and integration creates a strategic competitive advantage which can be easily scaled to include new acquired tourist destinations in the future.

Presently selling at $11.18.

Approx. 20 million shares outstanding after recent offering.

I expect 2010 eps to be roughly $1.75 or higher.

Forward PE of 6.4

ChinaStockPicker, re: 'And welcome to the board.'

Thanks. I have been looking for a group of like-minded investors for a long time now. This board is a welcome chance to intellectually converse in an otherwise solitary endeavour.

Keep up the good work with the moderation.

Best Regards,


Adam

ari,

Take a moment and try to determine what you believe the worst-case scenario valuations for each of your holdings, and then brace yourself for that level. Then determine what the worst-case scenario is for a year from now and compare. This should be your comfort zone in a crappy market. When sentiment improves you will be pleasantly surprised with the performance of your holdings.

Keep in mind that we are always asking the management of our companies to under-promise and over-deliver, yet sometimes we do not adhere to this line of thought ourselves. We expect vast over-performance and forget to take into consideration the negative variables.

In terms of a worst-case scenario valuation:

1) I don't think we can expect to get as low as early 2009, so I double the 2009 52-week low(or triple/quadruple if they have uplisted) to get my worst-case market crash bottom.

2) The fundamentals of many of the ECSC companies are significantly better and many have improved corporate controls, accounting controls, balance sheets, and therefore do not carry as much inherent risk as they once did.

3) Go get a beer, watch some t.v., take a nap. The Chinese government is tightening to maintain phenomenal growth of 7-8%, they just don't want 10%+ due to inflation concerns. Our companies are more volatile but also have some serious growth providing wind for their sails.

4) This too shall pass, and then gains will begin anew.


'Pscyhologically, I think I have hit rock bottom'

I would have to agree. I wouldn't be surprised to see a third of the ECSC stocks in the green by the end of the day. I suck at technicals though, this is more a gut feeling.

'today is capitulation day'


p.s. I have enjoyed reading this board so much over the past couple months that I became a premium member today. Looking forward to many great discussions in the future.