VisionChina Media's CEO Discusses Q3 2011 Results - Earnings Call Transcript

| About: VisionChina Media, (VISN)

VisionChina Media Inc (NASDAQ:VISN)

Q3 2011 Earnings Call

November 14, 2011 8:00 PM ET

Executives

Colin Wang – Director, IR

Limin Li – Chairman and CEO

Stanley Wang – VP, Finance

Analysts

Wei Fang – CLSA

Steve Zhang – Macquarie Company

Ann Jie – Cowen & Co

Chunming Zhao – SIG

Dick Wei – JPMorgan

Operator

Good evening and thank you for standing by for VisionChina Media’s Third Quarter 2011 Earnings conference call. At this time, all participants are in a listen-only mode. After managements prepared remarks, there will be a question and answer session. Today’s conference is being recorded. If you have any objections you may disconnect at this time. I will now turn the call over to your host for today’s conference, Mr. Colin Wang, Investors Relations Director for VisionChina Media. Sir, please go ahead.

Colin Wang

Hello everyone and welcome to VisionChina Media’s third quarter 2011 earnings conference call. The company’s third quarter earnings results were released earlier today and are available on company’s IR website at www.visionchina.cn as well as on newswire services. Today you’ll hear from our Chairman and Chief Executive Officer, Mr. Limin Li, who will talk about industry company’s strategy and business operations, and Mr. Stanley Wang, our Vice President of Finance who will take you through our financials and key operational metrics. After their prepared remarks, Mr. Li and Mr. Wang will be available for your questions.

Please note that today’s discussion will contain forward-looking statements made under Safe Harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements involve inherent risks and uncertainties. As such, our future results may be materially different from the views expressed today.

Further information regarding these and other risks and uncertainties is included in our Annual Report on Form 20-F and other documents filed with the U.S. Securities and the Exchange Commission. VisionChina Media does not assume any obligation to update any forward-looking statements except as required under applicable law.

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

[Interpreted] Thank you, Colin. Hello everyone, and thank for joining us today. We’re thrilled by the growth momentum of the successful second quarter. Within VisionChina Media once again delivered strong results in the third quarter of 2011 with revenues meeting company’s guidance and breaking our record for revenue generated in a single quarter.

Total revenues in the third quarter of 2011 were $50.2 million, a 32.4% increase year-over-year and an 11.6% increase quarter-over-quarter. Additionally in the third quarter, we realized non-GAAP profitability of $3.7 million. Moreover it is worth mentioning that without any major pricing fluctuations VisionChina Media’s utilization rate during the third quarter surpassed our historical peak of the same period in 2008 with a record high of 10.64 minutes per broadcast hour.

This 59% year-over-year increase and 23% quarter-over-quarter increase in utilization demonstrates that VisionChina Media’s nationwide out-of-home digital mobile television network with proven reach, recall and conversion rate is gaining more and more recognition and acceptance among advertisers in China.

In terms of media network development, we have begun to see the results of a strategic year on media platform restart optimization initiatives. Capital resource management and effective negotiations have resulted in the restructuring of contractors with several partners, radio and broadcasting bureaus, and subway and bus companies. The result has been the successful lowering of the media cost of our network. Optimization of our media network means that every minute of advertising sold now generates gross profit guaranteeing the achievements of pre-determined annual target.

In addition, our strong market position and nationwide sales network is driving deeper penetration into tier-three and tier-four cities to support clients’ product promotion and sales in those regions. Thus far, we have obtained digital mobile television concession rates in more than 15 tier-three and tier-four cities in regions allowing us to better serve our clients needs and solidify our market leading position across the country.

As an update on our strategic partnership with CCTV, in relation to the Annual Advertising Auctions for 2012. And these 10 new national brands have engaged with a company to discuss the VisionChina’s CCTV value proposition. Additionally, more satellite TV stations and third-party researches have increased interactions with VisionChina Media through content, partnership and research studies as a directed growth [ph] of our relationship with CCTV.

Our expanding cost ratio with these institutions has helped advertisers better understand the company nature of VisionChina Media’s real-time content driven platform to traditional television. According to 2010, China Market and Media Study, CMMS 2010 implemented effective reach of integrated advertising spending for clients advertising in a bundle that combines VisionChina Media and traditional TV platforms increased by a range of 11.3% to 36.7% compared to advertising only on traditional TV.

We believe this type of external communication incorporation will continue to give greater recognition of our platform in our traditional television sector furthering revenue growth opportunities. According to the published Framing Structure, Channel Coding and Modulation for Digital Television through registered broadcasting system issued by the China National Standing Committee on August 18, 2007.

VisionChina Media’s self-developed next generation set-top box includes new penetrative [ph] features such as auto-controlled volume that adjusts in accordance to external noise levels and will be letting to use in the overall national standard conversion, greatly enhancing audience experiences and effective reach of advertising.

As I am sure all of our investors are aware the Supreme Court of the State of New York recently entered orders deciding the pending motions, concerning the litigation VisionChina Media filed against Digital Media Group selling shareholders in connection to our acquisition of that company. VisionChina Media intends to appeal the Supreme Court order and will continue to vigorously pursue our remaining contract claims and defend against the claim assertive by the former Digital Media shareholders.

Turning now to developments in our industry, in the recent publication entitled a number of decisions on major issues regarding the reform of cultural systems to promote the development and prosperity of social culture put forth by the Chinese government on October 18, 2011 and it was decided for the first time that it is critical for the government to promote the cultural industry to allow it to become one of the nation’s premier industries. With this the importance of cultural industry development has been raised to an unprecedented height and the rare opportunity has arrived in our industry, as one of China’s leading company related to cultural enterprise and with all vast growth potential and vitality, VisionChina Media will benefit from industry policies such as supportive funds and tax incentives.

In fact, the Chinese government has actually conducted studies on VisionChina’s model regarded as a favorable one and appreciate our relation to culture, capital and technology and recognize the social and economic value of our offerings. During this time of countrywide culture industry promotion, VisionChina Media will continue to leverage opportunities to increase our scale of operation to support our financial stability and improve our profitability. We believe that VisionChina Media will benefit from reform in the cultural industry and that this will have a positive impact on the long-term value of our brand, bringing value to our shareholders.

I will now hand over the call to our Vice President of Finance, Mr. Stanley Wang, to discuss our financial and operating metrics in more detail.

Stanley Wang

Thank you, Mr. Li. (inaudible) anticipated strong growth trend of our business as well as our gross profit. We continued to grow our customer base and achieved record high total revenues during the quarter, with revenue growth of 11.6% quarter-over-quarter and 32.4% year-over-year. Furthermore, we achieved non-GAAP net income of $3.7 million, another improved results. As Mr. Li mentioned, we are confident that a strong future is now ahead for VisionChina Media.

Turning to our third quarter operating results. In addition to the key operational highlights just mentioned by Mr. Li, our network capacity which is measured by total broadcasting hour was 43,778 hours in the third quarter of 2011, representing a slight 1% decrease compared to 44,379 hours in the second quarter of 2011. This slight decrease was the result of management’s choice to not to renew an exclusive agency agreement upon its expiration in September 2011 in accordance to our strict cost control policy.

In the third quarter of 2011, the company sold a total of approximately 466,000 advertising minutes in our network compared to 383,000 advertising minutes sold in the second quarter of 2011, and 335,000 advertising minutes sold in the third quarter of 2010. We ended the third quarter of 2011 with 558 sales personnel, representing a net decrease of four sales personnel over the course of the third quarter.

Turning now to our third quarter financial results, total revenue was $50.2 million in the third quarter of 2011, falling within our revenue guidance range of $50 million to $53 million. This represented a quarter-over-quarter increase of 11.6% from the total revenues of $45 million in the second quarter of 2011, and a year-over-year increase of 32.4% from total revenue of $37.9 million in the third quarter of 2010.

Media cost, the most significant component of the advertising service cost was $26.4 million in the third quarter of 2011, representing 81.4% of our total advertising service cost compared to a media cost of $25.6 million in the second quarter of 2011. Media cost increased by $0.8 million in the third quarter of 2011.

Gross profit in the third quarter of 2011 was $17.8 million, compared to gross profit of $13.2 million in the second quarter of 2011 and a gross profit of $6.8 million in the third quarter of 2010. Advertising service gross margin was 35.5% in the third quarter of 2011 compared to 29.3 % in the second quarter of 2011, and 18.1% in the third quarter of 2010 as a result of stronger contribution by our in-house sales team and continued revenue growth.

Selling and marketing expenses were $11.5 million in the third quarter of 2011, an increase of 27.1% from $9 million in the second quarter of 2011, and an increase of 84.4% from $6.2 million in the third quarter of 2010. The increase in selling and marketing expenses was attributable to an increase in marketing effort that resulted in strong revenue growth. Selling and marketing expenses represented 22.8% of our total revenues in the third quarter of 2011 compared to 20% in the second quarter of 2011, and 16.4% in the third quarter of 2010.

General and administrative expenses were $3.1 million in the third quarter of 2011, an increase of 13.3% from $3.6 million in the third quarter of 2011, and an increase of 25.7% from $2.5 million in the third quarter of 2010.

Income from equity method investments amounted to approximately $200,000 in the third quarter of 2011 compared to an income of $200,000 in the second quarter of 2011, and an income of $20,000 in the third quarter of 2010. The company recorded a contingent loss of $2.7 million in connection to our pending litigation with the selling shareholders and former management of Digital Media Group.

Operating results – operating profit was $800,000 in the third quarter of 2011, compared to operating profit of $700,000 in the second quarter of 2011, and an operating loss of $1.8 million in third quarter of 2010. The company recorded a net interest expense of $600,000 in the third quarter of 2011 leveled with the net interest expense of $600,000 in the second quarter of 2011, and a slight decrease from the net interest expense of $700,000 in the third quarter of 2010. Net loss attributable to VisionChina Media shareholders was $800,000 million in the third quarter of 2011. Basic and diluted net loss per share attributable to VisionChina Media’s shareholders in the third quarter of 2011 were both $0.01.

Net income attributable to VisionChina Media’s shareholder excluding share-based compensation expenses, amortization of intangible assets, and provision for contingent loss in connection with our litigation which we refer to as non-GAAP net income was $3.7 million in the third quarter of 2011 compared to a non-GAAP net income of $900,000 in the second quarter of 201l and a non-GAAP net income of $1.1 million in the third quarter of 2010.

The company had cash and cash equivalents of $111.3 million as of September 30, 2011. The company’s net cash used in operating activities during the third quarter of 2011 was $10.7 million. Depreciation and amortization was $2.9 million and the capital expenditure was $0.5 million in the third quarter of 2011 respectively.

Turning now to our guidance. The company estimates total revenue, which consists of advertising revenue only, in the fourth quarter of 2011 to be $51 million and $54 million. Fourth quarter 2011 net income attributable to VisionChina Media’s shareholders, excluding share-based compensation expenses, and amortization of intangible assets and provision for contingent loss in connection with litigation which as we refer to non-GAAP net income is expected to be between $4 million and $7 million. These estimates are based on an exchange rate of US$1 versus RMB6.3885.

As a reminder our guidance is based on our current network of 20 cities that as of today have already been secured exclusive agency contracts and based on our current assessments of an outcome of pending litigation with selling shareholders of Digital Media Group Company Limited. If our network expands to additional cities either organically or through acquisition or if there was any progress in the pending litigation that affects our assessment of the possible outcomes, our forecasts could be affected.

Thank you again for joining us today. And I will now open the call for your questions.

Question-and-Answer Session

Operator

Thank you. Ladies and gentlemen, we will now begin the question and answer session. (Operator Instructions) The first question comes from the line of James Lee from CLSA. Please ask your question.

Wei Fang [ph] – CLSA

Hi, thank you for taking my question, actually this is Wei Fang calling on behalf of James Lee. The first question is regarding your media cost outlook for 4Q. And previously you mentioned that a 10% year-over-year growth for the year of 2011 and if you are on track and how about the outlook for 2012? And the second question is regarding the ad market outlook for 2012, regarding from the recent CCTV auction, both the domestic and multinational companies cutting their spending, it’s quite meaningful. Just want to get a sense of how you look at this and what’s the impact on your platform? Thank you very much.

Stanley Wang

We will – thank you for the question, and I am Stanley. We’ll first translate the question to Mr. Li and I’ll take the first question and Mr. Li will take the second question.

Wei Fang – CLSA

Thank you.

Stanley Wang

Hi Fang, the first question is about media costs and the outlook of media cost structure in Q4, actually we have a continued improvement in our media costs that means our media costs will continue to decrease because in Q3 we chose not to renew one exclusive contract and actually from another exclusive contract due to the reasonable cost increased demands from the local operating partner.

So when we talk about the overall target of 2011 which is within 10% increase as compared to 2011, this result is definitely achievable and we expect that for 2011, the overall media cost increase as compared to 2010 will be at around 7% to 8%. So in the 2012, the media costs will continue to exit straight cost controlled policy overall media costs and the other costs – and other cost components.

We expect that again in 2012, the media costs growth will be no less than 10%. And this is the first – my response to the question and Mr. Li would take the second question.

Limin Li

[Interpreted] The CCTV auction has been a very optimistic signal as the growth prospects towards 2012 for the whole advertising industry in China. And we’re confident that VisionChina is going to benefit from this signal too. Apart from the annual strategic cooperation with CCTV, we also established the partnership with another six top satellite TV in China for their annual advertising auction. And so far we have received very positive feedback from their clients.

And going forward, apart from positioning ourselves as one of the most cost effective outdoor digital media platform, we will continue to promote VisionChina as complementary priorities as the only expansion to the traditional TV in outdoor environment as to obtain more advertisers’ budget their TVs – their advertising allocation traditional television.

Wei Fang – CLSA

Okay, thank you. I’ll follow-up.

Operator

Thank you. The next question comes from the line of Steve Zhang from Macquarie Company. Please ask your question.

Steve Zhang – Macquarie Company

Hi thanks for taking my question. My first question is with regard to your outlook, can you describe – it seems the Q-over-Q growth was a little weaker than seasonal. Can you give a little bit more color on why that is and why the year-over-year growth has slowed down a bit, and also can you describe maybe a little bit on your Shenzhen bus contract and how that is going? Thank you.

Stanley Wang

Hi Steve, this is Stanley. Could you repeat your first question?

Steve Zhang – Macquarie Company

Yes, so in regards to your outlook [ph] it seems like your year-over-year growth is slowing down significantly, and then your sequentially growth Q-over-Q is also a little lighter than usual, can you describe why?

Stanley Wang

OK, we will translate the other question to Mr. Li. Please hold on. Hi Steve, in Q4 actually we have sold some cautious efficient from the advertisers on their placement. Certain advertisers were actually affected by the macroeconomic change and also – and certain worthy quotes [ph] were, there are certain changes that affect us our original expectation. And I would highlight certain companies say like the certainly in internet business, we will see a change of increase in placement in certain segments in the internet business such as like group-buying and the classified information companies.

We will see temporary change because we are – VisionChina actually working very hard and putting efforts to develop our business opportunities in other segments in the internet business. We believe that in the coming quarters, internet business is proportion in our total revenue. We decreased to 5% to 6% in our total revenue as compared to 12% in Q3. So this is basically the reason why we give our guidance which is lower than – that the growth is lower than the previous quarter and historical pattern.

And however for the traditional other vertical costs, the trend remains strong. Another reason is also our revenue – our top liners are slightly negatively affected by our exit from the Shenzhen bus contract because just like now and also I will answer your second question by the way because for Shenzhen bus contract which chose not to renew with exclusive agency contract because the local operating partner is asking for a more than 30% increase in the commission cost.

And if – under such offer, we will actually make a loss in the first three operational period if we renew this contract. So after very long time of negotiation about this contract that, unfortunately we cannot reach a consensus and reach an agreement on the new price. So we decided to turn this contract into non-exclusive basis so that we can make sure profitability of the placement for the advertisement for national and international customers.

Steve Zhang – Macquarie Company

Okay, thank you. Can you also talk a little more about the court case ruling, and when do you expect to actually have to pay the attachment of $30 million?

Stanley Wang

Steve, let me translate this question with Mr. Li first.

I think this will make – well we are making an appeal on this, if $30 million attachment was raised by the former DMG shareholders and managements, and the costs to grand the motion to the DMG’s shareholders and the former managements but now we are making uphill on the costs ruling over this motion of attachment. So basically we do not anticipate we will have any actions or payments or any cash flow in connection to this attachment until our restart of the appeal actually resolved.

Steve Zhang – Macquarie Company

Okay, thank you.

Operator

Thank you. The next question comes from the line of Chenyi Lu from Cowen. Please ask your question.

Ann Jie [ph] – Cowen & Co

Hi this is Ann Jie calling in on behalf of Chenyi Lu, thanks for taking my question. I was actually wondering are there any contracts coming up for renewal in the fourth quarter and also in 2012?

Stanley Wang

I will translate this question to Mr. Li.

Limin Li

[Interpreted] There was no major contract renewal in Q4 and 2012.

Ann Jie – Cowen & Co

Okay, great. And just another follow-up question, for the contingent loss related to the litigation I was wondering what’s the likelihood that this could increase over the next quarter or in 2012 and also how did you arrive at the $2.7 million?

Stanley Wang

Okay. Currently $2.7 million is based on our – I’ll say the best estimate of the current court ruling, and then we have a discussion with our legal council and the accountants to derive this number. And this actually for the coming quarters and 2012, it is if – it depends on the actual result of the court decision. If the court decision is unfavorable decision, it is possible that we may need to recall additional contingent on the court case [ph].

Ann Jie – Cowen & Co

Okay, thanks. That’s helpful. And my last question was just why was selling and marketing, we can think as a percentage of sales higher in the first quarter just sequentially, and can you give us your view going forward for fourth quarter and 2012?

Stanley Wang

For fourth quarter, we anticipated this – the percentage of our selling and marketing against the revenue will continue to increase by one percentage point because we anticipated in our potential economic downturn we will pay more efforts to the marketing efforts. So in the 2012, we will continue to keep the selling and marketing as a percentage of revenues at 20%.

Ann Jie – Cowen & Co

Thank you.

Operator

Thank you. The next question comes from the line of Dick Wei from JPMorgan. Please ask your question. Dick Wei your line is open. Dick Wei from JPMorgan your line is open. We will take the next question – the next question comes from the line of Ming Zhao from SIG. Please ask your question.

Chunming Zhao – SIG

Thank you very much, hello everyone. So my question is about the advertiser mix. So could you give us an update on the percentage of revenue coming from each vertical, also a follow-up to your previous answer to a question, that you said there were seven advertisers that are seeing some weakness in their ad spending, particularly you talked about the internet, you said group-buy and what are these others in that category, could you clarify? Thank you.

Stanley Wang

I mean I will answer the first question and then the – the major verticals in the Q3 was actually the FMCG was still the largest vertical which account for 32% of our total revenue. And the second largest vertical is internet business which accounts for 14% of our total revenue. And then the third and fourth major verticals were household products accounted for 12%, and the consumer product that accounts for 7% and also fashion and accessories accounts for 6%. This is the major – this is basically an update on our vertical change. And the second question, I beg your pardon, repeat I guess I didn’t quite catch it. Hi Ming.

Chunming Zhao – SIG

So the second question is on your earlier comments about the nucleus you see within the internet I heard that the combined business is slowing down that spending [ph], the other one you talked about?

Stanley Wang

Classified information.

Chunming Zhao – SIG

Classified.

Stanley Wang

Classified information companies.

Chunming Zhao – SIG

Right. What about those e-commerce companies selling products rather than group-buying companies?

Stanley Wang

Okay. The e-commerce company remains stable and we see e-commerce company and the online gaming to be a next growing point in the internet sector, but in Q4, there is least growth is obviously we are still working on that and we believe in the coming Q1 and Q2, we will have a better results from this segment of internet business.

Chunming Zhao – SIG

Okay, and what about in the traditional segments like automobile, real estate, are those significant in your categories?

Stanley Wang

These two are not significant vertical for us because historically and in current year, automobile and real estate in total, it accounts for less than 3% of our total revenue.

Chunming Zhao – SIG

Okay, got you. Thank you very much.

Stanley Wang

Thanks Ming.

Chunming Zhao – SIG

Thank you.

Operator

Thank you. (Operator Instructions) Our next question comes from the line of Dick Wei from JPMorgan. Please ask your question.

Dick Wei – JPMorgan

Hi, sorry, I was on mute earlier. My first question is that what is the plan for media expansion or city expansion next year, and then also what – also about the key contract going to be deal kind of the next contract is away or what are the contracts that is on the deal, that’s it? Thank you.

Stanley Wang

Hi, Dick we will translate it to Mr. Li first.

Limin Li

[Interpreted] As we are seeing a trend that a lot of the multinational national brands are having deepening penetration into the tier-three and tier-three four cities in China in terms of their product promotion and product promotion and sales. So that this original media network – we will continue to expand our network into tier-three and tier-four cities to better serve our clients needs and continue to expand coverage of our current network. Right now we have already entered the concession contract with around 15 tier-three and tier-four cities, based on the purchase of advertising minutes.

Dick Wei – JPMorgan

And can I have a follow-up on that, basically it is the 14 to 15 tier-three tier-four cities already in the 20 cities by the end of this quarter?

Stanley Wang

No, these cities are not included. It’s in addition to the 20 cities we’re having by the end of this quarter.

Dick Wei – JPMorgan

Okay I see, so should that looking as like maybe in 2012 we will be expecting to be like what 34, 35 cities?

Stanley Wang

I think this is based on for the 20 cities we are based – our network is based on the exclusive agency agreement basis. These 15 new contracts are non-exclusive basis. We will run the businesses in these cities on a non-exclusive basis for a period to see if it is appropriate or cost effective to enter into exclusive agreement in the future.

Dick Wei – JPMorgan

Okay. And how would those non-exclusive contracts impact your media costs, has it been reflected on your earlier guidance?

Stanley Wang

Not actually, there is – currently in these 15 cities actually do not cost to the assessment part of our media cost but if I think in the coming six months or nine months, we will enter into some more non-exclusive agreements in other tier-two or tier-three cities. So basically I think in the 2012 that will – these agreements will have an impact on our media costs but currently our 10% estimate of our media cost growth has not – it’s actually excluding the impact of this additional non-exclusive cities.

Unidentified Company Representative

And the models we used to enter these 15 tier-three, tier-four cities are mostly based on purchasing advertising time based per minute. So we want to incur media costs in addition to our current fixed cost structure when we see revenues coming in.

Dick Wei – JPMorgan

Right, understood, great. And then I guess follow-up on my earlier questions that what about the contract, the new contracts – sort of when the exclusive contract would expire, some of the key contract (inaudible).

Stanley Wang

I think it’s in Q4 in 2012 we do not have any major contract renewal.

Dick Wei – JPMorgan

Okay, great. And then lastly what I want to ask about the litigation, I think first of all I think that is the DMG holders now can attach to your assets, meaning that they can raise in that excess in some of the cash from VisionChina, is that correct, I am just trying to understand a little bit more some of the current situation?

Stanley Wang

First of all we are now appealing on this motion. And as I just mentioned the court has actually granted motions to DMG shareholders and now we’re making an appeal. And we do not anticipate the – in the foreseeable future where we need to transfer our assets to make attachment. And also we actually are fairly confident that the company’s current cash position and liquidity is sufficient to handle these any potential unfavorably sort out the – of this court case ruling.

Dick Wei – JPMorgan

What is the financial arrangement, if there is like a kind of I guess non-favorable outcome?

Stanley Wang

I think it maybe too early to talk about at this moment and actually it’s still in the court, it’s still in the process of sort of protest the case. So I wouldn’t like to comment on much about this process if any unfavorable result comes out, so I would like to hold that a little bit back until the resolved appeal actually comes out.

Unidentified Company Representative

Yes and we’ll try to have more big, hello.

Dick Wei – JPMorgan

Yes.

Unidentified Company Representative

Yes, the $30 million attachment that was what was written in the decision made by the court, our intention is to continue to appeal to the Supreme Court of New York State and we think this is going to be another long-term process. We do not see any impact to our cash position in the short-term.

Dick Wei – JPMorgan

That’s great. And lastly I just wanted to – what is the – if do we expect any kind of litigation expenses going to be booked in Q4?

Stanley Wang

Right. We expect kind of potentially about additional around $1 million to be recalled in the Q4 for the litigation expense. That is that a lot of people see [ph] and for the provisions I think in Q3 we have made $2.7 million provision for contingent liability. In Q4, I don’t see any indication that we make any additional provisions. And in 2012, once if the appeal has a – result comes out that maybe unfavorable to us, we may need to recall an additional contingent losses. Is it helpful [ph]?

Dick Wei – JPMorgan

Thank you very much. Yes, it helps, thank you.

Operator

Thank you very much. There are no further questions on the line. I will hand the conference back to Colin, sir please go ahead.

Colin Wang

Thank you all for joining us today. If you have any questions, please do not hesitate to contact us at ir@visionchina.cn.

Operator

That does conclude our conference for today. Thank you very much for participating. You may all disconnect.

Copyright policy: All transcripts on this site are the copyright of Seeking Alpha. However, we view them as an important resource for bloggers and journalists, and are excited to contribute to the democratization of financial information on the Internet. (Until now investors have had to pay thousands of dollars in subscription fees for transcripts.) So our reproduction policy is as follows: You may quote up to 400 words of any transcript on the condition that you attribute the transcript to Seeking Alpha and either link to the original transcript or to www.SeekingAlpha.com. All other use is prohibited.

THE INFORMATION CONTAINED HERE IS A TEXTUAL REPRESENTATION OF THE APPLICABLE COMPANY'S CONFERENCE CALL, CONFERENCE PRESENTATION OR OTHER AUDIO PRESENTATION, AND WHILE EFFORTS ARE MADE TO PROVIDE AN ACCURATE TRANSCRIPTION, THERE MAY BE MATERIAL ERRORS, OMISSIONS, OR INACCURACIES IN THE REPORTING OF THE SUBSTANCE OF THE AUDIO PRESENTATIONS. IN NO WAY DOES SEEKING ALPHA ASSUME ANY RESPONSIBILITY FOR ANY INVESTMENT OR OTHER DECISIONS MADE BASED UPON THE INFORMATION PROVIDED ON THIS WEB SITE OR IN ANY TRANSCRIPT. USERS ARE ADVISED TO REVIEW THE APPLICABLE COMPANY'S AUDIO PRESENTATION ITSELF AND THE APPLICABLE COMPANY'S SEC FILINGS BEFORE MAKING ANY INVESTMENT OR OTHER DECISIONS.

If you have any additional questions about our online transcripts, please contact us at: transcripts@seekingalpha.com. Thank you!