So I worked up a quick model for just the revenue for the inter-city segment. For me, this was just a way to gauge reasonableness.
1. How many inter-city buses? @22,780 Gene backed into the inter-city bus network size by estimating the airport bus network size. This seemed logical to me, but instead of using city size I found a site with airport passenger statistics.
Based on Beijing's known network size of 229 buses and published passenger volume of 65M passengers I extrapolated the size of airport buses for the other cities at 183. Of course, who knows what city factors might cause these numbers to be higher or lower. It really doesn't make a huge difference in the inter-city model.
2. Revenue for inter-city buses: $39.9M from Q2 breakout, or 3M RMB/day.
3. Thousands of Passengers/Day: 730 across operational buses - Outdated 10k data where they said had about 53M passengers monthly in 2008. At the time I think they had 16k inter-city buses. - 53M/16k/30 days = 110 passengers/day but this seems much too high so I used 40 - 40 x @80% of 22,780 buses being operational at any given time due to maintenance (reasonable based on an old friend who manages fleet maintenance for buses) - Divide by 1000
4. Ads Sold/Day/Bus: 400 20 ads per hour x 10 hours of bus operations x 60 minutes / 15 second ad spots is 800 ad slots per bus per day. Assume 50% of ad slots are sold = 400.
Even though a CPM of 10.34 RBM is higher than the @3 RMB in the 10k, I think their revenues for the inter-city bus segment is reasonable because of a) price increases occurred this year so the 10k CPM numbers are outdated and b) even putting in much lower assumptions (60% buses operational and 25% ad sales = CPM of 27.5 RMB) is reasonable with alternatives.
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