"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," I suggested after Focus Media's
Well, China's leading out-of-home digital marketer is at it again.
Net revenue soared 51% to $146.6 million in Focus Media's first quarter, with adjusted earnings nearly doubling to $0.30 a share. Analysts expected a profit of $0.27 a share on $134.9 million in revenue.
Focus Media's empire of LCD monitors, multiplex ad networks, poster frames, and traditional billboards continues to grow, and advertisers are willing to spend more to reach Chinese consumers on the go.
There are plenty of ways to play the obvious marketing angle within China's booming economy. Focus Media recently acquired a 15% stake in VisionMedia
Real-world marketers won't sport the sexy net margins that overhead-light online juggernauts can offer. Investors will continue to flock to SINA
However, we can't dismiss Focus Media. Few traditional marketers sported the 14% net margins the company posted during the first quarter -- a seasonally sleepy period. Three months prior, Focus Media scored nearly 30% in net margins for the fourth quarter.
Those results should continue to get better. Focus Media aims to earn between $0.38 a share and $0.39 a share on $160 million to $164 million in net revenue for the current quarter. Analysts are targeting a profit of just $0.37 a share on $156 million in net revenue.
Though no one's ever doubted the growth potential of China's consumer market, Wall Street somehow keeps lowballing that strength. For investors, those mismatched expectations offer a refreshing opportunity.
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