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My understanding from the call:

- though no exciting numbers released (maybe some in subsequent session by CFO), CEO hinted he has seen exciting results. Word “Excitement” had been repeated many times.
- CEO said progress in line with last guidance so far, very comfortable with it. Though not too exciting to us (without hearing raised guidance) but could understand this company mgt tends to be conservative.
- Will keep their strategy and focus on domestic mkt because it has huge growth opportunities yet to exploit before going outside China in big step.
- Said they have very good existing business model, 90% market share, contract renewal rate 99% - consider very good news
- Successful sales team restructuring, has seen “exciting” result so far. Sales teams are motivated and also benefit with regard to commission. Every now and then CEO received phone call from sales on beating targets.
- Drop some business lines (including known push SMS advertising) that are not or generating low profit. Make sense.
- CEO emphasized improved professionalism, profitability and integration (team & product)

- Some strategy bits during Q&A:
— Hinted M&A may slow down and will only buy new business if it can integrate well with core business
— willing to sacrifice short term margin to gain market share (to create barrier to new entrants), but he assured growth in absolute dollars term
— currently giving quite some attention and doing research on WAP and Internet business, in search of best direction/strategy

- CEO summarized by asking all to be confident with their:
—– BUSINESS MODEL
—– PRODUCTS
—– PROFITABILITY

Mentioned Daniel (CFO) will go through some (positive) numbers of interest to the audience, hope this subsequent session by Daniel will very much impress the analysts.

Wish all luck with FMCN stock price from this point onward

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