VisionChina Media Inc.

Transcription

1 VisionChina Media Inc. August 214

2 Disclaimer Information contained in these materials has not been independently verified. No representations or warranties, express or implied, are made and no reliance should be placed on the accuracy, fairness or completeness of the information presented or contained in these materials. Neither VisionChina Media Inc. (the Company or VisionChina), nor any of its affiliates, advisers or representatives accepts any responsibility whatsoever for any loss howsoever arising from any information presented or contained in or derived from these materials. The information presented or contained in these materials is subject to change without notice and its accuracy is not guaranteed. This presentation does not constitute an offer to sell or solicitation of an offer to buy or acquire securities of VisionChina Media Inc. in any jurisdiction or an inducement to enter into investment activity, nor may it or any part of it form the basis of or be relied on in connection with any contract or commitment whatsoever. Specifically, this presentation does not constitute a prospectus within the meaning of the U.S. Securities Act of 1933, as amended (the Securities Act ). No securities of the Company may be sold in the United States without registration with the United States Securities and Exchange Commission (the SEC ) unless pursuant to an available exemption from the registration requirement of the Securities Act. Any offering of the securities to be made in the United States will be made (i) on the basis of the information contained in a statutory prospectus included in a registration statement that has become effective or (ii) in transactions not subject to or exempted from the registration requirement of the Securities Act. This presentation contains forward-looking statements, including statements about the Company s business and financial outlook, strategy and market opportunity, and statements about the Company s historical results may suggest trends for its business. These statements are forward-looking statements within the meaning of the U.S. securities laws. These forward-looking statements are made only, and are based on estimates and information available to the Company, as of the date of this presentation. These forward-looking statements are not guarantees of future performance, are subject to risks and uncertainties that are difficult to predict, and are based on assumptions that may change. You are cautioned that actual results of the Company may differ materially from those set forth in the forward-looking statements herein. Except as otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise these forward-looking statements, whether as a result of new information, future events or otherwise. 1

3 Overview China s premier out-of-home day time TV network, connecting above ground bus media with below ground subway media seamlessly, making watching TV anytime and anywhere a reality. Launching free-to-air digital signals using terrestrial broadcasting technology, bringing TV from indoor to outdoor. Time and location-tailored real time mobile TV High quality programming including international and local TV news, stock w quotes, weather, sports, entertainment, etc. that highly attract audience s attention. The only measurable and metric-based day time TV media. Compulsive viewership inside enclosed spaces. Captive reception of advertising messages and interactions. 2

4 Our History Company inception with operation in 3 Tier II cities 12/27: Listed in the US NASDAQ stock market Network of screens on buses and subways covers 19 Chinese cities Receives strong endorsement from Focus Media Fast expansion to 3 Tier I cities and 11 Tier II cities 3 Presence in 3 Tier 1 cities and 13 Tier II cities VisionChina gains lead position on subways across China with near 1% market share Revenue from subway cities accounts for an important part in our total revenues since 21 3

5 VisionChina Network Media Coverage Data As of June 3, 214, 16 cities with bus mobile TV network + 6 cities subway mobile TV network As of June 3, 214, 4,99 bus digital mobile TV terminals + 69,91 subway TV terminals + 1,194 other TV terminals 81.6% coverage of China s wireless-transmission broadcasting terminals per Analysys International 21 4

6 Our platform: Seamless Coverage Getting on bus Transfer to subway In-bus Entering the station Buying tickets Waiting for the train In-train Getting off the train 5

7 Terrestrial Digital Mobile Broadcast Technology Local TV Station Collecting, editing and broadcasting system TV Tower Digital wireless broadcasting facilities Subway train & platform (operating) Bus (operating) Taxi Transmission from TV Station to TV tower via optical fiber Ferry Commercial building A 8Mhz wireless analogue channel can be split up to 12 wireless digital channels using digital graphics compression and terrestrial broadcasting technology. TV signals of these digital channels can be sent to different platforms. 6

8 Our Network: National Coverage Subway network-tier 1 cities Beijing Guangzhou Shenzhen Subway network-tier 2 cities Chongqing Tianjin Nanjing Bus network-tier 1 cities Beijing Guangzhou Bus network-tier 2 cities Wuhan Chengdu Changsha Nanjing Suzhou Xiamen Dalian Ningbo Wuxi Changzhou Zhengzhou Taiyuan Changchun Shenyang 7

9 VisionChina Exclusive Agency Model Local TV grants exclusive advertising time and content Advertisers Places ads in chosen cities Reaches targets at 19.7% of price of traditional TV on a CPM basis Enhances revenue for Local TV Leverages national footprint Offers national sales network Local TV Station/ Mobile TV Subsidiary/ Subway Operator Content delivery Broadcasting capability Radio usage rights VisionChina pays fixed concession fee 8

10 VisionChina Joint Venture Model VisionChina pays fixed concession fee JV grants exclusive advertising time and content Advertisers Places advertisements in chosen cities Reaches targets at 19.7% of price of traditional TV on a CPM basis Leverages national footprint and enhances revenue for Local TV Offers national sales network Manages JV s daily operation Produce innovative program Joint Venture Entity (2) Most of the JV entities Have exclusive Right to operate mobile TV Install the hardware Provide TV content Joint Venture Partner (normally local TV Station) Delivers content Provides broadcast capability Provides radio usage rights 49% Stake (1) 51% Stake (1) (1) In most of the joint venture entities, VisionChina owns 49% of equity interest and the other 51% equity interest is typically owned by the local TV station. (2) We have also entered into an exclusive agency agreement with some of our direct investment entities, including but not limited to Changchun, Changzhou, Chengdu, Dalian, Ningbo, Wuhan, Wuxi and Suzhou. These cities also fall within the scope of exclusive agency model. 9

11 Our Audience: China s Long Commutes Average media duration of bus riders 6% 3% More than 6 minutes 15% 3-6 minutes 15-3 minutes 44% Average media duration of subway riders 5% 1% More than 6 minutes 15% 3-6 minutes 37% 15-3 minutes Under 15 minutes 32% 42% Under 15 minutes Can t remember Can't remember Source: CMMS 213 (A) Source: CMMS 213(A) Bus passengers average riding time is 46.7 minutes every time Subway passengers average riding time is 51.5 minutes every time Typically we have 2-4 screens per bus Typically we have 6-1 screens per subway car 1

12 CTR Research-CPM Results Over 2/3rds of audiences like watching our programs in Guangzhou Over 2/3rds of audiences pay attention to our programs in Beijing 8% 6% 4% 2% 8% 6% 4% 2% % Don't like Relatively don't like Like very much Fair Relatively like % No attention Low attention Highly attention Fair Pay attention Cost Effective Advertising Cost per thousand people (RMB) Cost per thousand people (RMB) * On tier-one cities average, our CPM is just 18.8% of that of traditional television VISN 25 TTV 133 VISN 21 TTV 129 VISN 17 TTV 162 VISN 29 TTV 9 VISN 33 TTV 15 Average Beijing Shanghai Guangzhou Shenzhen VISN TV Newspaper Magazine Commercial building 45 Radio Source: Analysys International Major Cities in China Tier-one Cities Source: Analysys International

13 Outdoor TV Media with High Reach All Media Level of reach of different media TV Outdoor digital displays Newspaper Internet Magazines Radio Outdoor Digital Media 9.6% 72.% 53.9% 44.7% 26.% 11.3% % 2% 4% 6% 8% 1% Level of reach of some of the main traditional TV channels/visionchina s subway TV Media platform/ Channel Level of reach VisionChina 67.6% CCTV % CCTV-News 22.1% Media platform/ Channel Hunan Satellite TV Jiangsu Satellite TV Beijing Satellite TV Level of reach 34.6% 23.1% 15.1% Bus/Subway TV 67.6% Shanghai Dragon TV 22.9% Phoenix TV Chinese 5.7% Outdoor LEDs Supermarket display screens 62.5% 6.1% Source: CMMS 213(A) Commercial building display 36.9% In-taxi display screens In-train display screens 4.5%.9% % 1% 2% 3% 4% 5% 6% Source: CMMS 213(A) 12

14 Major Event Research Results Means of watching the Game during the 28 Olympics: TV VisionChina bus TV Radio Internet Other Mobile phone TV 1.6% 1.7% 23.6% 55.9% 2.5% 16.7% 27.6% 1.2% 51.7% 43.7% Source: CTR Research June % 95.6% 86.7% Means of receiving information during the 21 World Expo: VisionChina subway TV Local TV channels Internet /Cell phone Newspaper/ Magazines Bus mobile TV Outdoor advertising Radio 1.6% 27.6% Source: Sinomonitor July % 51.7% 43.7% 9.3% 86.7% Source: CTR Research

15 In The Right Place at the Right Time China Advertising Market Segmentation, 212 Large and Rapidly Growing Advertising Market... Others 46% Fashion and Accessories 13% Commercial and Services 13% (US$ mm) 9, 8, 7, 6, 5, 4, China Advertising Expenditure 69,381 53,786 61,544 44,567 34,51 38,5 77,557 Source: CMMS 212(W) Food 9% Beverage 1% Pharmaceutical 9% VisionChina 2Q214 Advertising Revenue Verticals 3, 25,774 2, 1, f 214f Source: GroupM (December, 212) with Significant Room for Sustained Growth Nutritional Supplements, 4% Pharmaceutical 4% Internet and Communicatio, 11% Food and Beverage, Restaurant, Wine and Spirit, 51% Household Products, 9% Financial Services,2% Travel, 7% Fashion and Accessories, 1% Electronic Products, 2% Others, 9% (% of GDP) 2.% Advertising Expenditure Per Capita in % 1.%.9%.9% %.8%.7% 37.4% 135.5% % 2.3% 719 China Taiwan South Korea UK Japan USA Hong Kong % of GDP Advertising Expenditure Per Capita (US$) Source: GroupM (December, 211) 14

16 Minutes Advertisers Hours Historical Key Operating Metrics Total Network Capacity Average Revenue Per Broadcasting Hour (US$) 5, 4, 3, 2, 1, 39,6 39,495 39,93 38,458 37,62 38,39 $9 $6 $3 $394 $665 $687 $772 $543 $734 $ Advertising Minutes Sold Per Broadcasting Hour & Total Minutes Sold Per Quarter Number of Advertisers Each Quarter & In-house Sales Employees ,418 35, , ,21 24, , Sales Headcount Number of advertisers Number of in-house sales at the end of the quarter 15

17 Historical Financial Results 3.% 2.% 1.%.% -1.% -2.% -3.% -4.% Advertising Service Gross Margin 27% 23% 22% 17% -1% -3% (US$ in thousands) Operating Profit/Loss (+/-) & Margin 5, -84% -2% -1% 2% 7% 2% -32% % 498 2,23-5,29-2,945-2% -5, -7,121-4% -1, -6% -15, -14,352-8% -2, -1% Operating Profit/Loss (+/-) Operating Margin NON-GAAP Net Income/Loss (+/-) GAAP Net Income/Loss (+/-) & Net Margin (US$ in thousands) (US$ in thousands) -5, -1, -15, NON-GAAP Net Income/Loss (+/-) 2, ,528-5,51-7,155-12,839 1, -1, -2, -3, -85% -22% -13%.4% -34% 8% -5,841-3, ,421-7,456-14,554 2% % -2% -4% -6% -8% -1% Net Income/Loss (+/-) Net Margin 16

18 Historical Financial Results (Continued) (US$ in thousands) Total Revenues Net Income/Loss Per ADS (+/-) (Diluted) 4, 3, 2, 1, 32,48 26,676 28,52 3,469 22,35 17,66 Accounts Receivable Turnover Days $1. $. -$1. -$2. -$3. -$4. * ADS amounts adjusted for a change in the ratio of the Company s American Depositary Shares to ordinary shares from 1:1 to 1:2, effective as of December 12, 212. (US$ in millions) -$2.87 -$1.15 -$.73 Cash Position $.3 -$1.41 $

19 Contact us For more information, please contact: Shuning Yi, Investor Relations Department Mobile: