VisionChina (VISN): Media ‘bargain’
"If you travel by bus or subway in China, you will likely be exposed to countless screens put there by VisionChina Media (NASDAQ: VISN)," says Jim Trippon in The China Stock Digest.
"The company’s first-quarter net profit jumped 23.7% year on year to $6.7 million from $5.4 million a year earlier. In the quarter ending March 31, total revenues surged 100% year on year to $27.3 million.
"Operating profit was $6.1 million, up 35%, exceptional results for a company with a 9.1 P/E multiple. VisionChina Media says it’s expecting a surge in second quarter revenues upon easing of the global financial crisis.
"The company distributes advertising using real-time mobile digital television broadcasts to deliver content and advertising on mass transit systems in China.
"Its digital displays can be found on buses, subway trains in Beijing, and other selected locations that can receive mobile digital television broadcasts.
"In the first quarter of 2009, the company sold a total of 184,045 advertising minutes in its network compared to 162,193 minutes in the first quarter of 2008 and 281,059 minutes in the fourth quarter of 2008.
"Average advertising service revenues per broadcasting hour grew 60.6% year-over-year to $792 per broadcasting hour from $493 per broadcasting hour in the first quarter of 2008.
"Despite budget pressures in the advertising business, VisionChina says its retention and renewal rates in the first quarter of 2009 were strong, and it continues to secure contracts with a healthy mix of international and domestic advertisers.
"The stock is still selling at bargain prices of less than a quarter of the company’s 52-week high which was $25.60 We’ve st a target sell price of $20.00, and our stop loss price is $4."
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