I'm not the type to make grim market calls on body parts, but now would be a good time to go long on Chinese eyeballs.
Focus Media (Nasdaq: FMCN ) posted blowout results last night. The advertising giant delivered a 45% pop in net revenue to $159.7 million. Earnings soared 71% higher to hit $0.41 a share. Analysts were banking on a profit of only $0.37 a share on $142.5 million in revenue.
Focus Media operates several real world marketing platforms. Its network includes 164,575 LCD screens, 300,012 poster frames, and 35,810 digital posters cranking out ads in highly trafficked areas. It also watches over traditional billboards and a movie theater advertising network.
It's not just Focus Media getting advertisers to pay more to reach audiences. AirMedia (Nasdaq: AMCN ) -- an operator of digital posters and LCD screens in leading Chinese airports -- posted market-thumping results on Monday night.
AirMedia's fourth-quarter revenue soared 57% to $70.8 million. Along with its adjusted profit of $0.10 a share, AirMedia topped Wall Street's target of $0.08 a share on $67.8 million in revenue.
AirMedia's stock still fell 7% yesterday, but that was the result of problematic guidance. It sees revenue clocking in between $58 million to $60 million for the current quarter. There is a seasonal dip to bake in, but the pros were forecasting revenue of $64 million. Margins will also be pressured, as the $38.1 million that AirMedia is expected to shell out in concession fees to its airport landlords is more than the $35.8 million it shelled out during the fourth quarter despite the sequential top-line drop.
Focus Media's outlook, on the other hand, didn't disappoint. It's looking to earn $0.25 a share to $0.27 a share on $132 million to $135 million in revenue. Wall Street's projecting a profit of $0.22 a share on $114.2 million in revenue.
There are other plays to consider for those wanting to go long Chinese eyeballs. VisionMedia (Nasdaq: VISN ) operates LCD screens on buses and trains. China MediaExpress (Nasdaq: CCME ) focuses on buses.
There are also plenty of online advertising specialists for those seeking some dot-com sizzle. SINA (Nasdaq: SINA ) and Sohu.com (Nasdaq: SOHU ) are display advertising powerhouses, while Baidu (Nasdaq: BIDU ) commands the lion's share of China's paid search market.
All seven of these companies are cashing in on China's booming economy and its financially empowered middle class. It's hard to bet against these trends and recent financials. Short Chinese eyeballs at your own risk.
Want to learn about a stock that's destined to shoot higher as China's first global brand emerges? Check it out in this special free report.
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