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AirMedia Group Inc. 08 July 2008

Company News Alert

AirMedia makes strategic acquisitions of two airport gate bridge advertising companies

ADR BUY We reiterated the AirMedia Group Inc. (AMCN) ADR a BUY in our update report dated 26 June 2008.
Since then the ADR has declined 4.7%. We believe this decline is largely is on account of the
Fundamental Stock weakness witnessed in global bourses over concerns of an economic slowdown triggered by US
Ticker: AMCN recessionary indicators and rapidly increasing fuel prices. However we believe the acquisition of
Target price: US$20.90 Direct access to the full report free of charge at
Excel Lead International Ltd (Excel Lead) and Flying Dragon Media Advertising Co. Ltd (Flying
Dragon) will boost the company’s top-line growth and aid long-term profitability. Therefore based on
Current price: US$14.00 http://www.iirgroup.com/researchoracle/viewreport/show/20230
fundamental factors we maintain our BUY rating for the ADR.
Price change since (4.76%)
our last report We will reassess our estimates and target price for the ADR in our next update report

European BUY We continue to rate the European ADR a BUY as we continue to expect a positive currency impact
in the medium to long term.
ADR1
Ticker: AMCNy.F
Target price: €15.48
Current price: €8.78
Price change since 3.78%
We will reassess our estimates and target price for the ADR in our next update report.
our last report

Supervisor: Meera Patil


Investment horizon- short term actionable trading strategies
Analyst: Sumit Jain
Editor: Shem Pennant This report addresses the needs of strategic investors with a long-term investment horizon of 6-24 months. If
Global Research Director: this report is provided to you by your broker under the Global Settlement, you may now also access (free of
Satish Betadpur, CFA charge) the short-term trading outlook that we publish from time to time for this issuer, looking at the coming
5-30 days for readers with a shorter trading horizon. These are available on-line only at
www.researchoracle.com
Next news due:
1Q 08 results, August 2008
On 07 July 2008, Airmedia announced that it has entered into an agreement to purchase 100% of the
equity interest in Excel Lead and 80% of the equity interest in Flying Dragon. The two companies will
give Airmedia control over the advertising business on gate bridges in 10 airports in mainland China.
According to Airmedia’s share purchase agreement with Excel Lead entered into on 04 July 2008,
Airmedia will acquire 100% of the equity interest in Excel Lead, with the contingent consideration
based on the after-tax net profit performance of Excel Lead in 2H 08, FY 2009 and FY 2010,
respectively, up to RMB189.3 mn in cash and 1,530,950 ordinary shares or 765,475 ADS of Airmedia
or up to RMB 275.5 mn in cash only. Subject to the customary closing conditions, the transaction with
Excel Lead is expected to close on 01 July 2008 and is expected to add to Airmedia’s non-GAAP EPS
in FY 2008. In addition, Beijing AirMedia Advertising, a consolidated affiliate of Airmedia, entered into
a share purchase agreement to acquire 80% of the equity interest in Flying Dragon for a total
consideration of RMB 10 mn in cash. The transactions are expected to expand the company’s
network in China and further strengthen its position in the Chinese air travel advertising sector. Taking
into account Airmedia’s presence in the air travel advertising sector as the largest digital media
network in China, we believe that these two acquisitions will further enable the company to
consolidate its position and boost top-line growth as well as long-term profitability. Therefore we
reiterate the ADR a BUY based on fundamental factors.

Footnotes
1 The AMCNy.F stock has low average daily trading volume of below US$1 mn since it was listed in November 2007.

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