WEB NEWS Comments & Business Outlook
Item 3.01. Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Standard; Transfer of Listing.
On July 8, 2016, in connection with the Merger, the Company notified NASDAQ Stock Exchange ( “NASDAQ”) of its intent to remove its common stock (the “Common Stock”) from listing on NASDAQ. On July 8, 2016, NASDAQ filed with the Securities and Exchange Commission (the “SEC”) an application on Form 25 to delist and deregister the Common Stock. In addition, the Company intends to file with the SEC a certification and notice of termination on Form 15 with respect to the Common Stock, requesting that the Common Stock be deregistered under the Securities Exchange Act of 1934, as amended (the “Exchange Act”), and that the reporting obligations of the Company with respect to the Common Stock under Sections 13(a) and 15(d) of the Exchange Act be suspended.
Item 3.03. Material Modification to the Rights of Security Holders.
As of the effective time of the Merger, each share of the Company’s Common Stock (other than shares owned by the Principal Shareholders) was converted into the right to receive $3.32 in cash, without interest and subject to any applicable withholding taxes. Certain shareholders beneficially owning an aggregate of 924,515 shares of the Company’s Common Stock gave written notice to the Company, prior to the Special Meeting, of their intent to exercise dissenters’ rights in accordance with the Nevada Revised Statutes (the “NRS”). Shares with respect to which dissenters’ rights have been properly exercised and not withdrawn or lost will be cancelled in consideration for the right to receive the fair value of such dissenting shares in accordance with the NRS.
Item 5.01. Changes in Control of Registrant.
Pursuant to the terms of the Merger Agreement, the Merger was completed on July 8, 2016 upon the filing of the Articles of Merger with the Secretary of State of the State of Nevada, at which time Acquisition merged with and into the Company, with the Company surviving the Merger and becoming wholly owned by the Principal Shareholders.
The aggregate consideration paid in connection with the Merger was approximately $5,487,920, which consideration was funded by the Principal Shareholder using cash on hand.
The foregoing summary of the Merger is not complete and is qualified in its entirety by reference to the Merger Agreement, a copy of which is attached hereto as Exhibit 2.1 and incorporated herein by reference. A copy of the press release announcing the results of the Special Meeting and the completion of the Merger is attached hereto as Exhibit 99.1 and incorporated herein by reference.
Comments & Business Outlook
CHINA YIDA HOLDING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31
2015
2014
Net revenue
$
14,509,124
$
13,124,152
Cost of revenue
9,562,829
9,053,904
Gross profit
4,946,295
4,070,248
Operating expenses
Selling expenses
9,528,549
10,037,292
General and administrative expenses
6,839,614
7,595,484
Impairment of long-lived assets
-
4,384,335
Total operating expenses
16,368,163
22,017,111
Loss from operations
(11,421,868
)
(17,946,863
)
Other income (expense)
Other (expense) income, net
(504,975
)
(394,144
)
Interest income
14,219
10,672
Interest expense
(8,240,163
)
(8,207,752
)
Total other expenses
(8,730,919
)
(8,591,224
)
Loss before income tax and non-controlling interest
(20,152,787
)
(26,538,087
)
Less: Provision for income tax
-
-
Net loss from continuing operations
(20,152,787
)
(26,538,087
)
Discontinued operation
Loss from discontinued operations, net of income taxes
-
(616,732
)
Loss on disposal of subsidiary, net of income taxes
-
(6,510,630
)
Net loss from discontinued operations, net of income taxes
-
(7,127,362
)
Net loss
$
(20,152,787
)
$
(33,665,449
)
Other comprehensive income (loss)
Foreign currency translation loss
(5,120,711
)
(879,782
)
Comprehensive loss
$
(25,273,498
)
$
(34,545,231
)
Amounts attributable to common stockholders:
Net loss from continuing operations, net of income taxes
$
(20,152,787
)
$
(26,538,087
)
Net loss from discontinued operations, net of income taxes
-
(7,127,362
)
Net loss attributable to common stockholders
$
(20,152,787
)
$
(33,665,449
)
Net loss attributable to common stockholders per share - basic and diluted:
- Basic & diluted earnings/(loss) per share from continuing operations
$
(5.15
)
$
(6.78
)
- Basic & diluted earnings/(loss) per share from discontinued operations
$
-
$
(1.82
)
- Basic & diluted earnings/(loss) per share attributable to common stockholders
$
(5.15
)
$
(8.60
)
Weighted average shares outstanding
- Basic
3,914,580
3,914,580
- Diluted
3,914,580
3,914,580
Management Discussion and Analysis
Net Revenue
Net revenue from continuing operations increased by approximately $1.38 million or approximately 10.55%, from approximately $13.12 million for the year ended December 31, 2014 to approximately $14.51 million for the year ended December 31, 2015, including approximately $9.11 million from Yunding Park, a decrease of $1.18 million or 11%, $0.48 million from Hua’an Tulou, a decrease of $0.15 million or 24%, $3.33 million from China Yang-sheng paradise, an increase of $1.13 million or 52%, and $1.58 million from the City of Caves, an increase of $1.58 million or 100%, for the year ended December 31, 2015, as compared to 2014. The primary sources of the revenues are ticket sales, tour shuttle bus fees, accommodation and sales from restaurants. The increase in tourism business was primarily due to the revenue increase at China Yang-sheng paradise and the City of Caves due to effective marketing and promotions that led to an increase in number of visitors. We provided deeper ticket discount due to the fierce competition among the destinations and the decreased tourist consumption. We expect the fierce competition and the reduced tourist consumption to continue in the near future.
As a result of the above factors, we experienced a net loss of approximately $20.15 million for the year ended December 31, 2015 as compared to a net loss of approximately $33.67 million for the year ended December 31, 2014, representing a decrease of loss of approximately $13.52 million or approximately 40.14%. The decrease in net loss was primarily attributable to the revenue increase at China Yang-sheng Paradise and City of Caves for the year ended December 31, 2015 as compared to the year ended December 31, 2014, and the loss incurred from disposal of Fujian Jintai for the year ended December 31, 2014.
Going Private News
Item 1.01 Entry into a Material Definitive Agreement.
On March 8, 2016, China Yida Holding, Co. (the “Company”) entered into an Agreement and Plan of Merger (the “Merger Agreement”) with China Yida Holding Acquisition Co., a Nevada corporation (“Acquisition”, together with the Company, the “Parties” and any one of them a “Party”).
The Merger Agreement
Pursuant to the Merger Agreement, upon the terms and subject to the conditions thereof, at the effective time of the merger, the Company will be merged with and into Acquisition, the separate corporate existence of the Company shall thereupon cease and Acquisition shall continue as the surviving company of the merger (the “Merger”). Each of the Company’s shares of common stock issued and outstanding immediately prior to the effective time of the Merger (the “Shares”) will be converted into the right to receive US$3.32 in cash without interest, except for (i) Shares owned by Acquisition, any of its affiliates or the Company, and (ii) Shares to be contributed to Acquisition by Mr. Minhua Chen and Mrs. Yanling Fan, immediately prior to the effective time of the Merger pursuant to a rollover agreement, dated as of March 8, 2016, among Acquisition, Mr. Minhua Chen and Mrs. Yanling Fan ((i) and (ii) collectively, the “Excluded Shares”), which will be cancelled for no consideration and cease to exist as of the effective time of the Merger. Currently, Mr. Minhua Chen and Mrs. Yanling Fan collectively beneficially own approximately 57.84% of the Company’s outstanding shares of common stock, on a fully diluted, as converted basis and 100% of Acquisition’s outstanding shares of common stock. Mr. Chen is Chief Executive Officer, President and Chairman and Ms. Fan is Chief Operating Officer of the Company and Acquisition.
Comments & Business Outlook
CHINA YIDA HOLDING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
Nine Months Ended
Three Months Ended
2015
2014
2015
2014
Net revenue
$
10,710,797
$
9,030,961
$
4,909,224
$
3,870,984
Cost of revenue
7,129,467
6,784,170
2,617,088
2,471,661
Gross profit
3,581,330
2,246,791
2,292,136
1,399,323
Operating expenses
Selling expenses
7,348,263
7,717,558
2,407,166
2,906,081
General and administrative expenses
5,278,801
5,555,330
1,423,944
1,967,665
Total operating expenses
12,627,064
13,272,888
3,831,110
4,873,746
Loss from operations
(9,045,734
)
(11,026,097
)
(1,538,974
)
(3,474,423
)
Other income (expense)
Other (expense) income, net
(326,284
)
(399,986
)
(12,713
)
(618,142
)
Interest income
12,836
7,448
4,013
2,975
Interest expense
(6,419,072
)
(6,460,899
)
(2,163,340
)
(1,999,487
)
Total other expenses
(6,732,520
)
(6,853,437
)
(2,172,040
)
(2,614,654
)
Loss before income tax and non-controlling interest
(15,778,254
)
(17,879,534
)
(3,711,014
)
(6,089,077
)
Less: Provision for income tax
-
-
-
-
Net loss from continuing operations
(15,778,254
)
(17,879,534
)
(3,711,014
)
(6,089,077
)
Discontinued operation
Loss from discontinued operations, net of income taxes
-
(616,732
)
-
(83,796
)
Loss on disposal of subsidiary, net of income taxes
-
(6,510,630
)
-
(6,510,630
)
Net loss from discontinued operations, net of income taxes
-
(7,127,362
)
-
(6,594,426
)
Net loss
$
(15,778,254
)
$
(25,006,896
)
$
(3,711,014
)
$
(12,683,503
)
Other comprehensive income (loss)
Foreign currency translation gain (loss)
(3,372,639
)
(1,138,800
)
(3,920,195
)
143,407
Comprehensive loss
$
(19,150,893
)
$
(26,145,696
)
$
(7,631,209
)
$
(12,540,096
)
Amounts attributable to common stockholders:
Net loss from continuing operations, net of income taxes
(15,778,254
)
(17,879,534
)
(3,711,014
)
(6,089,077
)
Net loss from discontinued operations, net of income taxes
-
(7,127,362
)
-
(6,594,426
)
Net loss attributable to common stockholders
(15,778,254
)
(25,006,896
)
(3,711,014
)
(12,683,503
)
Net loss attributable to common stockholders per share - basic and diluted:
- Basic & diluted earnings/(loss) per share from continuing operations
$
(4.03
)
$
(4.57
)
$
(0.95
)
$
(1.56
)
- Basic & diluted earnings/(loss) per share from discontinued operations
$
-
$
(1.82
)
$
-
$
(1.68
)
- Basic & diluted earnings/(loss) per share attributable to common stockholders
$
(4.03
)
$
(6.39
)
$
(0.95
)
$
(3.24
)
Weighted average shares outstanding
- Basic
3,914,580
3,914,580
3,914,580
3,914,580
- Diluted
3,914,580
3,914,580
3,914,580
3,914,580
Going Private News
FUZHOU, China —
October 27, 2015 — China Yida Holding, Co. (Nasdaq: CNYD) (“China Yida” or the “Company”), a tourism enterprise in China, today announced that its Board of Directors has received a preliminary, non-binding proposal letter dated October 24, 2015 from Mr. Minhua Chen, Chairman, CEO and President of the Company (“Mr. Chen”) and Yanling Fan, Chief Operating Officer of the Company and the wife of Mr. Chen (“Ms. Fan”), to acquire all of the outstanding shares of common stock of the Company not currently owned by them at a proposed price of $3.17 per share, in cash, subject to certain conditions. Mr. Chen and Ms. Fan currently beneficially own, in the aggregate, approximately 58% of the Company’s outstanding shares of common stock.
Comments & Business Outlook
CHINA YIDA HOLDING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
Six Months Ended June 30,
Three Months Ended June 30,
2015
2014
2015
2014
Net revenue
$
5,801,573
$
5,159,977
3,228,611
3,152,911
Cost of revenue
4,512,379
4,312,509
2,375,198
2,177,890
Gross profit
1,289,194
847,468
853,413
975,021
Operating expenses
Selling expenses
4,941,097
4,811,477
2,431,728
2,180,854
General and administrative expenses
3,854,857
3,587,665
1,646,901
1,671,480
Total operating expenses
8,795,954
8,399,142
4,078,629
3,852,334
Loss from operations
(7,506,760
)
(7,551,674
)
(3,225,216
)
(2,877,313
)
Other income (expense)
Other (expense) income, net
(313,571
)
226,545
(305,860
)
22,120
Interest income
8,823
4,473
5,745
1,604
Interest expense
(4,255,732
)
(4,461,412
)
(2,307,324
)
(2,256,364
)
Total other expenses
(4,560,480
)
(4,230,394
)
(2,607,439
)
(2,232,640
)
Loss before income tax and non-controlling interest
(12,067,240
)
(11,782,068
)
(5,832,655
)
(5,109,953
)
Less: Provision for income tax
-
-
-
-
Net loss from continuing operations
(12,067,240
)
(11,782,068
)
(5,832,655
)
(5,109,953
)
Net loss from discontinued operations, net of income taxes
-
(541,325
)
-
77,605
Net loss
$
(12,067,240
)
$
(12,323,393
)
$
(5,832,655
)
$
(5,032,348
)
Other comprehensive income
Foreign currency translation gain (loss)
547,556
(1,282,207
)
204,053
(183,568
)
Comprehensive loss
(11,519,684
)
(13,605,600
)
(5,628,602
)
(5,215,916
)
Amounts attributable to common stockholders:
Net loss from continuing operations, net of income taxes
(12,067,240
)
(11,782,068
)
(5,832,655
)
(5,109,953
)
Net (loss) income from discontinued operations, net of income taxes
-
(541,325
)
-
77,605
Net loss attributable to common stockholders
(12,067,240
)
(12,323,393
)
(5,832,655
)
(5,032,348
)
Net loss attributable to common stockholders per share - basic and diluted:
- Basic & diluted earnings/(loss) per share from continuing operations
$
(3.08
)
$
(3.01
)
$
(1.49
)
$
(1.31
)
- Basic & diluted earnings/(loss) per share from discontinued operations
$
-
$
(0.14
)
$
-
$
0.02
- Basic & diluted earnings/(loss) per share attributable to common stockholders
$
(3.08
)
$
(3.15
)
$
(1.49
)
$
(1.29
)
Weighted average shares outstanding
- Basic
3,914,580
3,914,580
3,914,580
3,914,580
- Diluted
3,914,580
3,914,580
3,914,580
3,914,580
Managment Discussion and Analysis
Net Revenue
Net revenue from continuing operations increased by approximately $0.64 million or approximately 12.43%, from approximately $5.16 million for the six months ended June 30, 2014 to approximately $5.80 million for the six months ended June 30, 2015, including approximately $3.85 million from Yunding Park, a decrease of $0.41 million or 10%, $0.25 million from Hua’anTulou, a decrease of $0.11 million or 31%, $1.45 million from China Yang-sheng paradise, an increase of $0.90 million or 164%, and $0.25 million from the City of Caves, an increase of $0.25 million or 100%, for the six months ended June 30, 2015, as compared to the same period in 2014. The primary sources of the revenues are ticket sales, tour shuttle bus fees, accommodation and sales from restaurants. The increase in tourism business was primarily due to the revenue increase at China Yang-sheng paradise and the City of Caves due to effective marketing and promotions that led to an increase in number of visitors. We provided deeper ticket discount due to the fierce competition among the destinations and the decreased tourist consumption. We expect the fierce competition and the reduced tourist consumption to continue in the near future.
As a result of the above factors, we have net loss of approximately $12.07 million for the six months ended June 30, 2015 as compared to net loss of approximately $12.32 million for the six months ended June 30, 2014, representing a decrease of loss of approximately $0.25 million or approximately 2.08%. The decrease of loss was primarily attributable to the revenue increase at China Yang-sheng paradise and City of Caves for the six months ended June 30, 2015 as compared with that for the six months ended June 30, 2014.
Comments & Business Outlook
CHINA YIDA HOLDING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
For The Three Months Ended
March 31,
2015
2014
Net revenue
$
2,572,962
$
2,007,066
Cost of revenue
2,169,091
2,134,619
Gross profit (loss)
403,871
(127,553
)
Operating expenses
Selling expenses
2,509,369
2,630,623
General and administrative expenses
2,207,956
1,916,185
Total operating expenses
4,717,325
4,546,808
Loss from operations
(4,313,454
)
(4,674,361
)
Other income (expense)
Other (expense) income, net
(7,711
)
204,425
Interest income
3,078
2,869
Interest expense
(1,948,408
)
(2,205,048
)
Total other expenses
(1,953,041
)
(1,997,754
)
Loss before income tax and non-controlling interest
(6,266,495
)
(6,672,115
)
Less: Provision for income tax
-
-
Net loss from continuing operations
(6,266,495
)
(6,672,115
)
Net loss from discontinued operations, net of income taxes
-
(618,930
)
Net loss
(6,266,495
)
(7,291,045
)
Other comprehensive income
Foreign currency translation loss
(876,069
)
(1,098,639
)
Comprehensive loss
$
(7,142,564
)
$
(8,389,684
)
Amounts attributable to common stockholders:
Net loss from continuing operations, net of income taxes
(6,266,495
)
(6,672,115
)
Net loss from discontinued operations, net of income taxes
-
(618,930
)
Net loss attributable to common stockholders
(6,266,495
)
(7,291,045
)
Net loss attributable to common stockholders per share - basic and diluted:
- Basic & diluted earnings/(loss) per share from continuing operations
$
(1.60
)
$
(1.70
)
- Basic & diluted earnings/(loss) per share from discontinued operations
$
-
$
(0.16
)
- Basic & diluted earnings/(loss) per share attributable to common stockholders
$
(1.60
)
$
(1.86
)
Weighted average shares outstanding
- Basic
3,914,580
3,914,580
- Diluted
3,914,580
3,914,580
Management Discussion and Analysis
Net Revenue
As a result of the above factors, we have net loss of approximately $6.27 million for the three months ended March 31, 2015 as compared to net loss of approximately $7.29 million for the three months ended March 31, 2014, representing a decrease of loss of approximately $1.02 million or approximately 14.05%. The decrease of loss was primarily attributable to the revenue increase at China Yang-sheng paradise and Yunding Park for the three months ended March 31, 2015 as compared with that for the three months ended March 31, 2014.
Comments & Business Outlook
CHINA YIDA HOLDING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31
2014
2013
Net revenue
Advertisement
$
-
$
2,910,612
Tourism
13,124,152
9,457,821
Total net revenue
13,124,152
12,368,433
Cost of revenue
Advertisement
-
2,045,765
Tourism
9,053,904
4,214,436
Total cost of revenue
9,053,904
6,260,201
Gross profit
4,070,248
6,108,232
Operating expenses
Selling expenses
10,037,292
9,582,502
General and administrative expenses
7,595,484
7,527,230
Total operating expenses
17,632,776
17,109,732
Loss from operations
(13,562,528
)
(11,001,500
)
Other income (expense)
Other expense, net
(394,144
)
(119,700
)
Interest income
10,672
82,821
Interest expense
(8,207,752
)
(5,538,473
)
Total other expenses
(8,591,224
)
(5,575,352
)
Loss before income tax and non-controlling interest
(22,153,752
)
(16,576,852
)
Less: Provision for income tax
-
133,323
Net loss from continuing operations
(22,153,752
)
(16,710,175
)
Discontinued Operation
Loss from discontinued operations, net of income taxes
(616,732
)
(643,355
)
(Loss) gain on disposal of subsidiary, net of income taxes
(6,510,630
)
999,133
Net (loss) income from discontinued operations, net of income taxes
(7,127,362
)
355,778
Net loss
(29,281,114
)
(16,354,397
)
Net loss attributable to non-controlling interest:
Net loss from discontinued operation
-
102,215
Net loss attributable to China Yida Holding Co.
$
(29,281,114
)
$
(16,252,182
)
Net loss
$
(29,281,114
)
$
(16,354,397
)
Other comprehensive income
Foreign currency translation (loss) gain
(876,069
)
4,308,861
Comprehensive loss
(30,157,183
)
(12,045,536
)
Comprehensive income attributable to non-controlling interest
-
390,730
Comprehensive loss attributable to China Yida Holding Co.
$
(30,157,183
)
$
(11,654,806
)
Amounts attributable to common stockholders:
Net loss from continuing operations, net of income taxes
(22,153,752
)
(16,710,175
)
Net (loss) income from discontinued operations, net of income taxes
(7,127,362
)
457,993
Net loss attributable to common stockholders
(29,281,114
)
(16,252,182
)
Net loss attributable to common stockholders per share - basic and diluted:
- Basic & diluted earnings/(loss) per share from continuing operations
$
(5.66
)
$
(4.27
)
- Basic & diluted earnings/(loss) per share from discontinued operations
$
(1.82
)
$
0.12
- Basic & diluted earnings/(loss) per share attributable to common stockholders
$
(7.48
)
$
(4.15
)
Weighted average shares outstanding
- Basic
3,914,580
3,914,580
- Diluted
3,914,580
3,914,580
Management Discussion and Analysis
Net Revenue
Net revenue from continuing operations increased by approximately $0.75 million or approximately 6.11%, from approximately $12.37 million for the year ended December 31, 2013 to approximately $13.12 million for the year ended December 31, 2014. The increase in net revenue was primarily due to the increase in the revenue from tourism revenue which was partially offset by the decrease in advertisement revenue.
Advertisement
Advertisement revenue decreased by approximately $2.91 million or 100%, from approximately $2.91 million for the year ended December 31, 2013 to $0 for the year ended December 31, 2014. The decrease was caused by the termination of the advertisement business in 2013.
We generated no sales from the “Journey through China on the Train” program for the year ended December 31, 2014 as compared to approximately $0.06 million for the year ended December 31, 2013. The Company lost all its advertising clients since the railway program was broadcasted manually by train attendants and we had no control over the frequency of program broadcasting. We terminated “Journey through China on the Train” program in March 2013.
Tourism revenue increased by approximately $3.66 million or approximately 38.77% from approximately $9.46 million for the year ended December 31, 2013 to approximately $13.12 million for the year ended December 31, 2014, including approximately $10.29 million from Yunding Park, an increase of $1.65 million or 19%, $0.63 million from Hua’an Tulou, a decrease of $0.05 million or 7%, and $2.20 million from China Yang-sheng paradise, an increase of $2.06 million or 1471%, for the year ended December 31, 2014, as compared to the same period in 2013. The primary sources of the revenues are ticket sales, tour shuttle bus fees, accommodation and sales from restaurants. The increase in tourism business was primarily due to the revenue increase at China Yang-sheng paradise, the newly opened tourism destinations, and Yunding Park due to effective marketing promotion activities and advertisement that led to an increase in number of tourists. We provided deeper ticket discount due to the fierce competition among the destinations and the decreased tourist consumption had also decreased. The gross revenue increased due to the increase in the number of tourists attracted by the reduced ticket fee. We expect the fierce competition and the reduced tourist consumption to continue in the near future.
Net Loss
As a result of the above factors, we have net loss of approximately $29.28 million for the year ended December 31, 2014 as compared to net loss of approximately $16.35 million for the year ended December 31, 2013, representing an increase of loss of approximately $12.93 million or approximately 79.08%. The increase of loss was primarily attributable to the decrease in advertisement revenue due to the termination of our advertisement business in July 2013, the increase in cost of revenue and general and administrative expenses in connection with the operation of China Yang-sheng paradise for the year ended December 31, 2014 as compared with that for the year ended December 31, 2013.
Comments & Business Outlook
CHINA YIDA HOLDING CO. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
Nine Months Ended
Three Months Ended
2014
2013
2014
2013
Net revenue
Advertisement
$
-
$
2,899,844
$
-
$
318,434
Tourism
9,030,961
6,891,455
3,870,984
2,616,382
Total net revenue
9,030,961
9,791,299
3,870,984
2,934,816
Cost of revenue
Advertisement
-
2,038,196
-
271,213
Tourism
6,784,170
3,104,123
2,471,661
1,145,681
Total cost of revenue
6,784,170
5,142,319
2,471,661
1,416,894
Gross profit
2,246,791
4,648,980
1,399,323
1,517,922
Operating expenses
Selling expenses
7,717,558
6,566,556
2,906,081
2,243,762
General and administrative expenses
5,555,330
4,160,079
1,967,665
1,669,838
Total operating expenses
13,272,888
10,726,635
4,873,746
3,913,600
Loss from operations
(11,026,097
)
(6,077,655
)
(3,474,423
)
(2,395,678
)
Other income (expense)
Other expense, net
(399,986
)
(560,284
)
(618,142
)
(527,976
)
Interest income
7,448
75,499
2,975
4,817
Interest expense
(6,460,899
)
(3,280,394
)
(1,999,487
)
(928,581
)
Total other expenses
(6,853,437
)
(3,765,179
)
(2,614,654
)
(1,451,740
)
Loss before income tax and non-controlling interest
(17,879,534
)
(9,842,834
)
(6,089,077
)
(3,847,418
)
Less: Provision for income tax
-
132,830
-
961
Net loss from continuing operations
(17,879,534
)
(9,975,664
)
(6,089,077
)
(3,848,379
)
Discontinued Operation
(Loss) income from discontinued operations, net of income taxes
(616,732
)
(782,692
)
(83,796
)
220,202
(Loss) gain on disposal of subsidiary, net of income taxes
(6,510,630
)
999,133
(6,510,630
)
-
Net (loss) income from discontinued operations, net of income taxes
(7,127,362
)
216,441
(6,594,426
)
220,202
Net loss
(25,006,896
)
(9,759,223
)
(12,683,503
)
(3,628,177
)
Net loss attributable to non-controlling interest:
Net loss from discontinued operation
-
102,215
-
-
Net loss attributable to China Yida Holding Co.
$
(25,006,896
)
$
(9,657,008
)
$
(12,683,503
)
$
(3,628,177
)
Net loss
$
(25,006,896
)
$
(9,759,223
)
$
(12,683,503
)
$
(3,628,177
)
Other comprehensive income
Foreign currency translation (loss) gain
(1,138,800
)
3,573,349
143,407
681,539
Comprehensive loss
(26,145,696
)
(6,185,874
)
(12,540,096
)
(2,946,638
)
Comprehensive loss attributable to non-controlling interest
-
390,730
-
-
Comprehensive loss attributable to China Yida Holding Co.
$
(26,145,696
)
$
(5,795,144
)
$
(12,540,096
)
$
(2,946,638
)
Amounts attributable to common stockholders:
Net loss from continuing operations, net of income taxes
(17,879,534
)
(9,975,664
)
(6,089,077
)
(3,848,379
)
Net income from discontinued operations, net of income taxes
(7,127,362
)
318,656
(6,594,426
)
220,202
Net loss attributable to common stockholders
(25,006,896
)
(9,657,008
)
(12,683,503
)
(3,628,177
)
Net loss attributable to common stockholders per share - basic and diluted:
- Basic & diluted earnings/(loss) per share from continuing operations
$
(4.57
)
$
(2.55
)
$
(1.56
)
$
(0.98
)
- Basic & diluted earnings/(loss) per share from discontinued operations
$
(1.82
)
$
0.08
$
(1.68
)
$
0.06
- Basic & diluted earnings/(loss) per share attributable to common stockholders
$
(6.39
)
$
(2.47
)
$
(3.24
)
$
(0.92
)
Weighted average shares outstanding
- Basic
3,914,580
3,914,580
3,914,580
3,914,580
- Diluted
3,914,580
3,914,580
3,914,580
3,914,580
Management Discussion and Analysis
Net Revenue
Net revenue from continuing operations increased by approximately $0.94 million or approximately 31.9%, from approximately $2.93 million for the three months ended September 30, 2013 to approximately $3.87 million for the three months ended September 30, 2014. The increase in net revenue was primarily due to the increase in the revenue from tourism revenue which was partially offset by the decrease in advertisement revenue.
As a result of the above factors, we have net loss of approximately $12.68 million for the three months ended September 30, 2014 as compared to net loss of approximately $3.63 million for the three months ended September 30, 2013, representing an increase of loss of approximately $9.05 million or approximately 249.58%. The increase of loss was primarily attributable to the decrease in advertisement revenue because the agreement with FETV expired in July 2013, the increase in cost of revenue and general and administrative expenses for the operation of China Yang-sheng paradise for the three months ended September 30, 2014 as compared with that for the three months ended September 30, 2013.
Comments & Business Outlook
Item 1.01 Entry into a Material Definitive Agreement.
Comments & Business Outlook
Six Months Ended
Three Months Ended
2014
2013
2014
2013
Net revenue
Advertisement
$
-
$
2,581,410
$
-
$
981,599
Tourism
7,146,130
6,140,564
4,492,098
4,042,327
Total net revenue
7,146,130
8,721,974
4,492,098
5,023,926
Cost of revenue
Advertisement
-
1,766,983
-
847,839
Tourism
5,544,286
3,152,029
2,856,041
1,682,403
Total cost of revenue
5,544,286
4,919,012
2,856,041
2,530,242
Gross profit
1,601,844
3,802,962
1,636,057
2,493,684
Operating expenses
Selling expenses
5,405,846
4,965,717
2,496,885
2,574,209
General and administrative expenses
4,062,942
3,011,374
1,883,351
1,406,653
Total operating expenses
9,468,788
7,977,091
4,380,236
3,980,862
Loss from operations
(7,866,944
)
(4,174,129
)
(2,744,179
)
(1,487,178
)
Other income (expense)
Other expense, net
355,451
(85,910
)
138,928
(38,134
)
Interest income
5,152
75,688
1,938
66,504
Interest expense
(4,817,052
)
(2,558,423
)
(2,429,035
)
(2,534,826
)
Total other expenses
(4,456,449
)
(2,568,645
)
(2,288,169
)
(2,506,456
)
Loss before income tax and non-controlling interest
(12,323,393
)
(6,742,774
)
(5,032,348
)
(3,993,634
)
Less: Provision for income tax
-
131,869
-
943
Net loss from continuing operations
(12,323,393
)
(6,874,643
)
(5,032,348
)
(3,994,577
)
Discontinued Operation
Loss from discontinued operations, net of income taxes
-
(255,536
)
-
(198,351
)
Gain on Disposal of Subsidiary
-
999,133
-
999,133
Net income from discontinued operations, net of income taxes
-
743,597
-
800,782
Net loss
(12,323,393
)
(6,131,046
)
(5,032,348
)
(3,193,795
)
Net loss attributed to non-controlling interest:
Net loss from discontinued operation
-
102,215
-
79,364
Net loss attributable to China Yida Holding Co.
$
(12,323,393
)
$
(6,028,831
)
$
(5,032,348
)
$
(3,114,431
)
Net loss
$
(12,323,393
)
$
(6,131,046
)
$
(5,032,348
)
$
(3,193,795
)
Other comprehensive income
Foreign currency translation (loss) gain
(1,282,207
)
2,891,810
(183,568
)
1,532,088
Comprehensive loss
(13,605,600
)
(3,239,236
)
(5,215,916
)
(1,661,707
)
Comprehensive income attributable to non-controlling interest
-
390,730
-
330,030
Comprehensive loss attributable to China Yida Holding Co.
$
(13,605,600
)
$
(2,848,506
)
$
(5,215,916
)
$
(1,331,677
)
Amounts attributable to common stockholders:
Net loss from continuing operations, net of income taxes
(12,323,393
)
(6,874,643
)
(5,032,348
)
(3,994,577
)
Net income from discontinued operations, net of income taxes
-
845,812
-
880,146
Net loss attributable to common stockholders
(12,323,393
)
(6,028,831
)
(5,032,348
)
(3,114,431
)
Net loss attributable to common stockholders per share -basic and diluted:
-Basic & diluted earnings/(loss) per share from continuing operations
$
(3.15
)
$
(1.76
)
$
(1.29
)
$
(1.02
)
-Basic & diluted earnings/(loss) per share from discontinued operations
$
-
$
0.22
$
-
$
0.22
-Basic & diluted earnings/(loss) per share attributable to common stockholders
$
(3.15
)
$
(1.54
)
$
(1.29
)
$
(0.80
)
Weighted average shares outstanding
-Basic
3,914,580
3,914,580
3,914,580
3,914,580
-Diluted
3,914,580
3,914,580
3,914,580
3,914,580
Management Discussion and Analysis
Net Revenue
Net revenue decreased by approximately $0.53 million or approximately 10.59%, from approximately $5.02 million for the three months ended June 30, 2013 to approximately $4.49 million for the three months ended June 30, 2014. The decrease in net revenue was primarily due to the decrease in the revenue from advertisement revenue which was partially offset by an increase in tourism.
As a result of the above factors, we have net loss of approximately $5.03 million for the three months ended June 30, 2014 as compared to net loss of approximately $3.11 million for the three months ended June 30, 2013, representing an increase of loss of approximately $1.92 million or approximately 61.58%. The increase of loss was primarily attributable to the decrease in advertisement revenue because the agreement with FETV expired in July 2013, the increase in cost of revenue and general and administrative expenses for the operation of China Yang-sheng paradise for the three months ended June 30, 2014 as compared with that for the three months ended June 30, 2013.
Comments & Business Outlook
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
(UNAUDITED)
For The Three Months Ended
March 31,
2014
2013
Net revenue
Advertisement
$
-
$
1,599,811
Tourism
2,654,032
2,098,237
Total net revenue
2,654,032
3,698,048
Cost of revenue
Advertisement
-
919,144
Tourism
2,688,245
1,469,626
Total cost of revenue
2,688,245
2,388,770
(34,213
)
1,309,278
Operating expenses
Selling expenses
2,908,961
2,391,508
General and administrative expenses
2,179,591
1,604,721
Total operating expenses
5,088,552
3,996,229
Loss from operations
(5,122,765
)
(2,686,951
)
Other income (expense)
Other income (expense), net
216,523
(47,776
)
Interest income
3,214
9,184
Interest expense
(2,388,017
)
(23,597
)
Total other expenses
(2,168,280
)
(62,189
)
Loss from continuing operations before income tax and non-controlling interest
(7,291,045
)
(2,749,140
)
Less: Provision for income tax
-
130,926
Net loss income from continuing operations
(7,291,045
)
(2,880,066
)
Discontinued Operation
Loss from discontinued operations, net of income taxes
-
(57,185
)
Net Loss
(7,291,045
)
(2,937,251
)
Net loss attributed to non-controlling interest:
Net loss from discontinued operation
-
22,851
Net loss attributable to China Yida Holding Co.
$
(7,291,045
)
$
(2,914,400
)
Net Loss
$
(7,291,045
)
$
(2,937,251
)
Other comprehensive income
Foreign currency translation (loss) gain
(1,098,639)
1,359,722
Comprehensive loss
(8,389,684
)
(1,577,529
)
Comprehensive income attributable to non-controlling interest
-
60,700
Comprehensive loss attributable to China Yida Holding Co.
$
(8,389,684
)
$
(1,516,829
)
Amounts attributable to common stockholders:
Net loss from continuing operations, net of income taxes
(7,291,045
)
(2,880,066
)
Net loss from discontinued operations, net of income taxes
-
(34,334
)
Net loss attributable to common stockholders
(7,291,045
)
(2,914,400
)
Net loss attributable to common stockholders per share - basic and diluted:
- Basic & diluted loss per share from continuing operations
$
(1.86
)
$
(0.73
)
- Basic & diluted loss per share from discontinued operations
$
-
$
(0.01
)
- Basic & diluted loss per share attributable to common stockholders
$
(1.86
)
$
(0.74
)
Weighted average shares outstanding
- Basic
3,914,580
3,914,580
- Diluted
3,914,580
3,914,580
Management Discussion and Analysis
Net Revenue
Net revenue decreased by approximately $1.04 million or approximately 28.23%, from approximately $3.70 million for the three months ended March 31, 2013 to approximately $2.65 million for the three months ended March 31, 2014. The decrease in net revenue was primarily due to the decrease in the revenue from advertisement revenue which was partially offset by an increase in tourism.
the increase in interest expense because the interest expense for the three months ended March 31, 2013 was capitalized as part of construction in progress.
Comments & Business Outlook
CONSOLIDATED STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
FOR THE YEARS ENDED DECEMBER 31
2013
2012
Net revenue
Advertisement
$ 2,910,612 $ 16,993,999
Tourism
14,930,274 10,611,890
Total net revenue
17,840,886 27,605,889
Cost of revenue
Advertisement
2,045,765 5,360,780
Tourism
6,933,503 6,068,111
Total cost of revenue
8,979,268 11,428,891
Gross profit
8,861,618 16,176,998
Operating expenses
Selling expenses
11,217,087 6,691,946
General and administrative expenses
8,535,974 4,296,548
Total operating expenses
19,753,061 10,998,494
(Loss) Income from operations
(10,891,443 ) 5,188,504
Other income (expense)
Other expense, net
(227,307 ) (323,804 )
Interest income
90,717 30,754
Interest expense
(5,936,638 ) (1,833,196 )
Total other expenses
(6,073,228 ) (2,126,246 )
(Loss) Income from continuing operations before income tax and non-controlling interest
(16,964,671 ) 3,062,258
Less: Provision for income tax
133,323 2,847,274
Net (loss) income from continuing operations
(17,097,994 ) 214,984
Discontinued Operation
Loss from discontinued operations, net of income taxes
(255,536 ) (822,171 )
Gain on Disposal of Subsidiary
999,133 -
Net income (loss) from discontinued operations, net of income taxes
743,597 (822,171 )
Net Loss
(16,354,397 ) (607,187 )
Net loss attributed to non-controlling interest:
Net loss from discontinued operation
102,215 327,683
Net (loss) income attributable to China Yida Holding Co.
$ (16,252,182 ) $ (279,504 )
Net Loss
$ (16,354,397 ) $ (607,187 )
Other comprehensive income
Foreign currency translation gain
4,308,861 1,359,722
Comprehensive (loss) income
(12,045,536 ) 752,535
Comprehensive loss attributable to non-controlling interest
390,730 275,219
Comprehensive (loss) income attributable to China Yida Holding Co.
$ (11,654,806 ) $ 1,027,754
Amounts attributable to common stockholders:
Net income (loss) from continuing operations, net of income taxes
(17,097,994 ) 214,984
Net income (loss) from discontinued operations, net of income taxes
845,812 (494,488 )
Net Loss attributable to common stockholders
(16,252,182 ) (279,504 )
Net income (loss) attributable to common stockholders per share - basic and diluted:
- Basic & diluted earnings/(loss) per share from continuing operations
$ (4.37 ) $ 0.06
- Basic & diluted earnings/(loss) per share from discontinued operations
$ 0.22 $ (0.13 )
- Basic & diluted earnings/(loss) per share attributable to common stockholders
$ (4.15 ) $ (0.07 )
Weighted average shares outstanding
- Basic
3,914,580 3,913,000
- Diluted
3,914,580 3,913,000
Management Discussion and Analysis
Net Revenue
Net revenue decreased by approximately $9.77 million or approximately 35.37%, from approximately $27.61 million for the year ended December 31, 2012 to approximately $17.84 million for the year ended December 31, 2013. The decrease in net revenue was primarily due to a decrease in advertisement revenue which was partially offset by an increase in tourism.
Net Losswe have net loss of approximately $16.25 million for the year ended December 31, 2013 as compared approximately $0.28 million for the year ended December 31, 2012, representing a decrease of approximately $15.97 million or approximately 5714.65%. The decrease was primarily attributable to the decrease in advertisement revenue from FETV and the increase in general and administrative expenses for the operation of new tourism destinations for the year ended December 31, 2013 as compared with the same period in 2012.
Comments & Business Outlook
(UNAUDITED)
Six Months Ended June 30,
Three Months Ended June 30,
2013
2012
2013
2012
Net revenue
Advertisement
$ 2,581,410 $ 10,957,060 $ 981,599 $ 4,762,541
Tourism
6,140,564 4,188,339 4,042,327 2,652,149
Total net revenue
8,721,974 15,145,399 5,023,926 7,414,690
Cost of revenue
Advertisement
1,766,983 2,990,408 847,839 1,431,408
Tourism
3,152,029 2,759,334 1,682,403 1,491,741
Total cost of revenue
4,919,011 5,749,742 2,530,241 2,923,149
Gross profit
3,802,962 9,395,657 2,493,684 4,491,541
Operating expenses
Selling expenses
4,965,717 2,647,120 2,574,209 1,504,155
General and administrative expenses
3,011,374 2,091,284 1,406,653 980,367
Total operating expenses
7,977,091 4,738,404 3,980,862 2,484,522
(Loss) Income from operations
(4,174,129 ) 4,657,253 (1,487,178 ) 2,007,019
Other income (expense)
Other expense, net
(85,910 ) (112,882 ) (38,134 ) (74,247 )
Interest income
75,688 16,350 66,504 10,284
Interest expense
(2,558,423 ) (119,491 ) (2,534,826 ) (55,231 )
Total other expenses
(2,568,645 ) (216,023 ) (2,506,456 ) (119,194 )
(Loss) Income from continuing operations before income tax and non-controlling interest
(6,742,774 ) 4,441,230 (3,993,634 ) 1,887,825
Less: Provision for income tax
131,869 2,006,321 943 720,133
Net (loss) income from continuing operations
(6,874,643 ) 2,434,909 (3,994,577 ) 1,167,692
Discontinued Operation
Loss from discontinued operations, net of income taxes
(255,536 ) (330,078 ) (198,351 ) (161,821 )
Gain on Disposal of Subsidiary
999,133 - 999,133 -
Net income (loss) from discontinued operations, net of income taxes
743,597 (330,078 ) 800,782 (161,821 )
Net (loss) Income
(6,131,046 ) 2,104,831 (3,193,795 ) 1,005,871
Net loss attributed to non-controlling interest:
Net loss from discontinued operation
102,215 131,214 79,364 63,911
Net (loss) income attributable to China Yida Holding Co.
$ (6,028,831 ) $ 2,236,045 $ (3,114,431 ) $ 1,069,782
Net (loss) income
$ (6,131,046 ) $ 2,104,831 $ (3,193,795 ) $ 1,005,871
Other comprehensive income
Foreign currency translation gain
2,891,810 1,234,044 1,532,088 83,727
Comprehensive (loss) income
(3,239,236 ) 3,338,875 (1,661,707 ) 1,089,598
Comprehensive loss attributable to non-controlling interest
390,730 83,409 330,030 60,743
Comprehensive (loss) income attributable to China Yida Holding Co.
$ (2,848,506 ) $ 3,422,284 $ (1,331,677 ) $ 1,150,341
Amounts attributable to common stockholders:
Net loss (income) from continuing operations, net of income taxes
(6,874,643 ) 2,434,909 (3,994,577 ) 1,167,692
Net loss (income) from discontinued operations, net of income taxes
845,812 (198,864 ) 880,146 (97,910 )
Net loss (income) attributable to common stockholders
(6,028,831 ) 2,236,045 (3,114,431 ) 1,069,782
Net loss (income) attributable to common stockholders per share - basic and diluted:
- Basic & diluted earnings/(loss) per share from continuing operations
$ (1.76 ) $ 0.62 $ (1.02 ) $ 0.30
- Basic & diluted earnings/(loss) per share from discontinued operations
$ 0.22 $ (0.05 ) $ 0.22 $ (0.03 )
- Basic & diluted earnings/(loss) per share attributable to common stockholders
$ (1.54 ) $ 0.57 $ (0.80 ) $ 0.27
Weighted average shares outstanding
- Basic
3,914,580 3,911,188 3,914,580 3,911,188
- Diluted
3,914,580 3,911,188 3,914,580 3,911,188
Comments & Business Outlook
Second Quarter 2012 Results
Total net revenue was $7.4 million , a decrease of 32.5% compared to $11.0 million in the year-ago period
Net revenue from the tourism business was $2.7 million , an increase of 6.1% year over year, with a gross margin of 35.8%
Net revenue from the media business was $4.8 million , a decrease of 43.9% year over year, with a gross margin of 64.2%
Gross profit was $4.5 million , a decrease of 40.2% compared to $7.5 million in the year-ago period
Operating income was $1.8 million , a decline of 64.3% compared to $5.2 million in 2011
Net income attributable to China Yida Holding Company was $1.1 million, a decrease of 69.3% compared to $3.5 million in the year-ago period
Fully diluted EPS was $0.05 per share compared to $0.18 in the year-ago period
"We are pleased to announce that we achieved a solid increase in tourist traffic to two of our key tourist destinations in the quarter as well as a modest rise in revenue from our tourism segment. We believe that this is a result of the successful execution of a number of initiatives, including our strategy to create scale economies in marketing that extends to all of our properties with the goal to boost tourist traffic to all of our sites," commented Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida. "We are encouraged to see that visitor traffic to Great Golden Lake has recovered and that visitor traffic to Yunding Park has begun to flourish, although both sites are hampered by ongoing road access issues. Given that the fundamentals in China's dynamic tourism market remain strong, we expect further contribution from our tourism segment growth to the Company's top and bottom line as the summer tourism season draws to a close."
"We reiterate that our focused growth strategy is the development of unique and attractive tourist destinations to meet the strong fundamentals for tourism in China and we plan upon strategically shifting more fully towards this segment of our business over time," Dr. Chen continued. "The development of three additional properties is on schedule and we expect to commence operation of these new tourist destinations in early 2013."
Investor Alert
FUZHOU, China, July 7, 2012 /
PRNewswire-Asia-FirstCall / -- China Yida Holding Company (Nasdaq: CNYD) ("China Yida"or the "Company"), a diversified tourism and entertainment enterprise in China, today announced that the Company has received a letter from The NASDAQ Stock Market LLC
("Nasdaq") informing the Company that its
common stock has not met the $1.00 minimum bid price requirement for continued listing on The Nasdaq Capital Market under Nasdaq Listing Rule 5550(a)(2). The Company did not meet Nasdaq's minimum bid price requirement because the closing bid price for its common stock for each trading day in the 30-business day period from May 17, 2012 to June 28, 2012 was less than $1.00 per share. In accordance with Nasdaq Listing Rule 5810(c)(3)(A), China Yida has a grace period of 180 calendar days, or until December 31, 2012, to regain compliance with the minimum bid price requirement. To regain compliance, the closing bid price of the Company's common stock must meet or exceed $1.00 per share for at least ten consecutive business days during this 180-day grace period. If the Company chooses to implement a reverse stock split, it must complete the split no later than ten business days prior to the expiration date of the grace period in order to regain compliance. If the Company does not regain compliance within this period, it may be eligible for additional time. To qualify, the Company will be required to meet the continued listing requirement for market value of publicly held shares and all other initial listing standards for The Nasdaq Capital Market, with the exception of the bid price requirement, and will need to provide written notice of its intention to cure the deficiency during the second compliance period, by effecting a reverse stock split, if necessary. If the Company fails to regain compliance within the grace period permitted by Nasdaq, the Company's common stock will be subject to delisting by Nasdaq. The Company will consider available options to resolve the noncompliance with the minimum bid price requirement. The notification letter has no immediate effect on the listing of the Company's common stock on The Nasdaq Capital Market. China Yida's common stock will continue to trade on The Nasdaq Capital Market under the symbol "CNYD."
Comments & Business Outlook
First Quarter 2012 Results
Total net revenue was $7.7 million, a decrease of 34.4% compared to $11.8 million in the Net revenue from the tourism business was $1.5 million, a decrease of 19.8% year over year, with a gross margin of 17.5%
Net revenue from the media business was $6.2 million, a decrease of 37.2% year over year, with a gross margin of 74.8%
Gross profit was $4.9 million, a decrease of 40.6% compared to $8.3 million in the year-ago period
Operating income was $2.5 million, a decline of 59.5% compared to $6.1 million in 2011.
Net income attributable to China Yida Holding Company was $1.2 million, a decrease of 70.5% compared to$4.0 million in the year-ago period
Fully diluted EPS was $0.06 per share, compared to $0.20 in the year-ago period.
"In the first quarter of 2012, we continue to face challenges in our tourism and media businesses. However, we are confident that our business model is sound and we remain committed to the dynamic tourism market in China," commented Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida. "Although road access issues continue to hinder visitor traffic to Great Golden Lake, we have forged ahead and plan to develop guest cottages that will accommodate overnight guests at Yunding Park, which has also benefited from enhanced marketing resulting in much improved tourist traffic. We have also developed a new pricing strategy at the Hua'An Tulou cluster to counter competitive pressures. We expect an increase in tourist traffic to all of our destinations as we enter the warm weather tourist season."
"Our media segment continued to feel the impact of restrictions imposed by domestic media authorities," Dr. Chen continued. "Despite the continued volatility of our media segment, our focused growth strategy remains the development of unique and attractive tourist destinations to meet the growing domestic demand for tourism in China. With the addition of three new properties in development, we foresee a strategic mix of six operating properties with the potential to generate a diversified income stream that will enhance shareholder value in the long run," concluded Dr. Chen.
Management believes that it can finance all of its ongoing capital expenditures from cash on hand, cash from operations and bank loans secured against its land bank. Entering 2012, new construction and development was adversely affected by more-than-normal rainy days. However, Management will undertake its best efforts to complete Phase I construction of these new projects and commence operation of the new tourist destinations by the end of 2012.
Auditor trail
FUZHOU, China, April 18, 2012 /
PRNewswire-Asia-FirstCall / -- China Yida Holding Company (Nasdaq: CNYD) ("China Yida" or the "Company"), a leading tourism and media enterprise in China, today announced that the Company has
appointed KCCW Accountancy Corp. ("KCCW") to serve as its independent registered
public accounting firm, replacing Friedman LLP ("Friedman"). KCCW will begin providing services for the first fiscal quarter of 2012. The decision to change auditors was not the result of any disagreement between the Company and Friedman LLP on any matters of accounting principles or practices, financial statement disclosure, or auditing scope or procedures.
Comments & Business Outlook
Fourth Quarter 2011 Results
Total consolidated net revenue for the Company's two business segments, Tourism and Media, decreased 33.2% to $8.2 million in the fourth quarter of 2011 as compared to $12.3 million in the fourth quarter of 2010.
Net income attributable to China Yida Holding Company for the fourth quarter of 2011 was $1.5 million , or $0.08 per diluted share, as compared with $5.3 million , or $0.26 per diluted share, for the fourth quarter of 2010.
"Although we were still profitable in a difficult year, our fiscal year 2011 results fell below our expectations reflecting certain challenges associated with our business segments that we are working hard to address. The recovery of tourist traffic to our Great Golden Lake destination has been slower than expected as has traffic to Yunding Recreational Park, as access to both sites is currently limited while modern roads are being built by the local governments. Also, while results from our media segment also fell somewhat due to restrictions imposed by domestic media authorities, our focus, first and foremost, is our tourism business which we are working very hard to grow and develop," Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida stated.
"We are currently taking steps to maximize the dollars earned from tourists who are visiting our existing destinations. We are building a new resort at Yunding Park that we hope will contribute to revenue by year-end 2012 and set the stage for a recovery in 2013. We anticipate that our operating cash flow and our reserve of land provides sufficient liquidity to maintain our development goals in the years ahead. With the Company operating a strategic mix of properties that yield a diversified revenue stream, and with three exciting projects currently in development, we anticipate a rising and sustainable level of revenue flow in the long run," Dr. Chen added.
Business Update and 2012 Outlook
In conjunction with strict regulations on certain types of TV advertising, Management expects that FETV's advertising revenue may decline further in 2012. Beginning in January 1, 2012 , the State Administration of Radio Film and Television (SARFT) disallowed any commercial advertisements that are inserted in the midst of certain TV programming with the result that ad time is now minimized and only able to be inserted at a program's end. In addition, it has become challenging to find buyers for advertising on the Company's "Journey through China on the Train" railway program due to the absence of an automatic broadcasting and monitoring system.
As of December 31, 2011 , China Yida has made significant progress in the development of its new tourism destinations in Anhui and Jiangxi Provinces, with over 200 million RMB invested in acquisition of land use rights and over 60 million RMB in construction of tourism facilities. Management reaffirms its belief that despite recent setbacks, the Company can finance all of its ongoing capital expenditures from cash on hand, cash from operations and bank loans secured against its land bank. Entering 2012, new construction and development was adversely affected by more-than-normal rainy days. However, Management will undertake its best efforts to generate revenues from the new properties by the end of 2012.
Investor Alert
FUZHOU, China , March 19, 2012 /PRNewswire-Asia-FirstCall / -- China Yida Holding Company (Nasdaq: CNYD) ("China Yida" or the "Company"), a leading tourism and media enterprise in China , today warned investors as to inquiries from certain entities.
Recently, the Company heard from a few shareholders that they had received emails from some so-called merger management companies who claimed that they are acting in connection with a take-over deal. Shareholders were told these shareholders held common stock positions being registered as InteliSys Aviation Systems, a former entity of China Yida. Some investors were even offered very attractive prices and were told that there were warrants attached to these shares that had value. Please be advised that there are no warrants attached to the shares. Shareholders were also being requested to pay a documentation fee in advance in order to facilitate a transaction.
China Yida's management is concerned that these are scams from fraudulent entities. Although InteliSys Aviation Systems has the origin of being the Company's public shell company, there are no warrants attached to these InteliSys Aviation Systems shares. Management encourages investors to validate their CNYD stock positions first, by sending emails to ir@yidacn.net, and upon receiving these suspicious mails, to be extremely cautious about signing over shares or disbursing with any funds.
CFO Trail
FUZHOU, China, Jan. 2, 2012 /
PRNewswire-FirstCall / -- China Yida Holding Company (
Nasdaq :
CNYD) ("China Yida" or the "Company"), a leading tourism and media enterprise in China, today announced that Mr. Yongxi Lin was appointed to be the Company's
interim Chief Financial Officer. Mr. Lin has been working with China Yida as its Financial Controller since 2003. Before joining China Yida, he was Chief Financial Director with Fujian Furi Group. He received his Bachelor's degree in Accounting in 1994 and is a member of the Chinese Institute of Certified Public Accountants (CICPA). About China Yida China Yida is a leading tourism and media enterprise focused on China's fast-growing leisure industry and headquartered in Fuzhou City, Fujian province of China. The Company provides tourism management services and specializes in the development, management and operation of natural, cultural and historic scenic sites. China Yida currently operates the Great Golden Lake tourist destination (Global Geopark, including Golden Lake, Shangqing River, Zhuangyuan Rock, Luohan Mountain and Taining Old Town), Hua'An Tulou tourist destination (World Culture Heritage, including Dadi Tulou cluster and the Shangping Tulou cluster) and China Yunding Park (National Park, including Flower Terrace, Heavenly Lake, Colorful Waterfall, Red River Valley and Jade Valley). China Yida is also developing three additional tourism projects including Ming Dynasty Entertainment World, China Yang-sheng (Nourishing Life) Tourism Project and the City of Caves. The Company's operating scenic sites total in aggregate over 300 square kilometers in area. The Company's media business provides operations management services including content and advertisement management for the Fujian Education Television Station
("FETV"), a top-rated provincial education television channel, and "Journey through China on the Train", an advertisement-embedded travel program, currently the only on-board media program from a third party authorized by China's Ministry of Railways.
Comments & Business Outlook
Third Quarter 2011 Results
Total net revenue was $11.2 million , an increase of 1.6% as compared to $11.0 million in the third quarter of 2010
Net revenue from the tourism business was $2.9 million , an increase of 121.9% year over year with a gross margin of 51.8%
Net revenue from the media business was $8.3 million , a decrease of 14.4% year over year with a gross margin of 74.3%
Gross profit was $7.7 million , a decrease of 7.0% compared to $8.3 million in the same period last year
Net income attributable to China Yida Holding Company was $3.2 million , a decrease of 31.3% as compared to $4.7 million posted in the same period last year
Fully diluted EPS was $ 0.16 per share, compared to $0.23 in the third quarter of 2010
"We are pleased to see a significant improvement in tourist traffic to our premier Great Golden Lake destination in the quarter, and remain confident about its continued full recovery. We are also reporting ongoing progress at Yunding Recreational Park, which we believe will develop into a highly popular destination with a wide array of attractions for people of all ages," said Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida.
"We remain confident about the future of our Company. With the Company operating and developing a strategic mix of properties that yield diversified revenue streams, we anticipate stable and sustainable sources of income. We remain committed to meeting the needs of the dynamic tourism market in China and believe that our unique tourist destinations will generate a high level of tourist satisfaction as well as sound returns on investment," concluded Dr. Chen.
"We are buoyed by the positive developments at the Great Golden Lake and Yunding as well as ongoing progress with our new projects," said Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida. "Our wholly-owned subsidiary, Fujian Yida Travel Service Co., Ltd., will integrate the marketing of all our tourist destinations and they have now opened 16 branches in seven provinces - which we plan to increase to 24 in 2012. Finally, our advertising and broadcast business currently presents certain challenges and we look forward to developing solutions to stabilize this segment," concluded Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida.
2011-2012 Outlook
In 2011, we have been constructing and developing Yunding Park’s second phase of construction and three new tourism projects, the Ming Dynasty Entertainment World in Bengbu City, Anhui province, the China Yang-sheng (Nourishing Life) Paradise in Zhangshu City, Jiangxi province, and the City of Caves in Fenyi City, Jiangxi province, which represent our commitment to expanding our business operations by applying our current business model to the development of other valuable tourist destinations out of Fujian province, and throughout China. The construction was in line with our schedule. We expect that we will complete the first phase construction of these three new projects and open them to the public by the end of 2012. In addition, in June 2011, we announced the establishment of our new subsidiary, Fujian Yida Travel Service Co., Ltd. Over the next three years, we will mainly focus on developing our existing six tourist destinations. All required construction funds will be funded either from our net income and operating cash flow or will be financed through bank loans.
Comments & Business Outlook
Second Quarter 2011 Highlights
Total net revenue was $11.0 million, a decrease of 32.9% as compared to $16.4 million in the second quarter of 2010
Net revenue from the tourism business was $2.5 million, a decrease of 64.5% year over year with gross margin of 51.9%
Net revenue from the media business was $8.5 million, a decrease of 9.0% year over year with a gross margin of 73.2%
Gross profit was $7.5 million a decrease of 43.4% to compared to $13.3 million in the same period last year
Net income attributable to China Yida Holding Company was $3.5 million, a decrease of 57.1% as compared to $8.1 million posted in the same period last year
Fully diluted EPS was $0.18 per share compared to $0.41 in the second quarter of 2010 "As anticipated, the performance of our tourism segment for the second quarter was below year-ago levels. However, though the continued effects of last year's floods continued to impact tourist traffic at our premier Great Golden Lake destination, we are encouraged by the healthy increase in visitors to the site from the first quarter," said Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida.
"We remain optimistic about the future of our Company. With three highly appealing tourist destinations in operation, three new projects under development, a newly-formalized tourism marketing entity and a valuable land reserve base, we are well positioned to take advantage of China's rapidly growing tourism industry for years to come, and we still believe that Yida will have a profitable future," concluded Dr. Chen.
Business Update and 2011 Second Half Outlook
The Company's strategic plan is to transition from what is currently a media and tourism company to one that is primarily a tourist company, where revenues derived from its tourism properties account for an ever-increasing percentage of its total revenues. The Company foresees many diverse sources of income emanating from its tourist properties. This further diversifies the contribution of all China Yida's properties so as to drive a sustainable level of total Company revenue growth, high margins and strong future earnings.
Of its existing tourist destinations, The Company anticipates that additional time is required for the Great Golden Lake to return to seasonal levels and that the third quarter will show additional progress towards that goal. At Yunding, the construction of the valley rafting facilities has been completed, and the restaurant in the gorges will be ready to operate at the end of 2011. In addition, the designs for the camping center and shopping plaza have been completed and the process to receive the necessary approval for construction has commenced. Finally, at Tulou, approval to improve the stream area is processing with the goal of reinstating the primitive beauty of the Dadi cluster. Once approved, the Company will enhance the stream area so as to further enrich the site's natural environment.
In order to launch and promote its strategic marketing plan, the Company has formed a wholly owned subsidiary, Fujian Yida Travel Service Co., Ltd. China Yida plans to conduct integrated marketing for its three current tourist destinations and eventually, for its three tourist destinations currently under construction.
In terms of its advertising and broadcast business, as previously disclosed, the Company expects that FETV's advertising revenue will be impacted by controls imposed by domestic media authorities that prohibit specialized channels such as FETV from broadcasting TV shopping programs, TV screen mini ads and certain medical ads. This has impacted the Company's revenues for the most recent quarter as the Company is utilizing media marketing strategies to prevent the continual decline of media revenue. The Company will seek to increase this advertising revenue and ultimately intends to upgrade the TV channel's profile which could lead to a more secure sourcing of advertising revenue. Finally, as also disclosed, Management continues to expect that its "Journey through China on the Train" infomercial program revenue will decline slightly in 2011 mostly due to an absence of an automatic broadcasting and monitoring system.
In terms of China Yida's three new tourism projects, development and construction events are proceeding according to schedule. The local government has approved most of the complex regulatory approvals necessary to ensure that the demolition, construction and development work will be done in line with the Company's estimates. Approximately $1.4 million in capital expenditures were disbursed during the second quarter for road construction for the Yang-sheng and City of Caves tourist destinations.
Management Share Buyback
The Company announces that Dr. Minhua Chen, Chairman and Chief Executive Officer of China Yida, intends to use his personal funds to purchase up to $250,000 worth of the Company's stock in open market transactions from the date of this announcement to the end of 2011, pursuant to a Rule 10b5-1 plan and subject to the restrictions of and consistent with the Company's securities trading policy.
"The purchase of the Company's shares reflects the confidence I have in the long-term fundamentals and growth prospects of China Yida," said Chairman Chen. "I remain committed to maximizing long-term value for shareholders and realizing the full potential of our business and operations."
Acquisition Activity
On June 24, 2011, China Yida Holding, Co. (the “Company”) incorporated an indirect wholly-owned subsidiary , China-Fujian Yida Travel Service Co., Ltd (the “New Subsidiary”), in Fuzhou City, Fujian Province, China. The New Subsidiary is 100% owned by our subsidiary Yida (Fujian) Tourism Group Limited, an indirect wholly foreign owned entity incorporated in China, which is 100% owned by our Hong Kong subsidiary, Hong Kong Yi Tat International Limited. The New Subsidiary is incorporated in China with a registered capital of RMB 10,000,000 (USD $1,546,670). Ms. Yanling Fan, the Chief Operating Officer and Director of the Company, is the President of the New Subsidiary. The authorized business term of the New Subsidiary is from June 24, 2011 to June 23, 2051.
The New Subsidiary’s business scope will be to conduct domestic and international traveling services in China, including but not limited to, operating the direct sales of travel services for our current tourist destinations at the Great Golden Lake, Yunding Recreational Park, and Hua’An Tulou Cluster, and our three tourist destinations currently under construction, Ming Dynasty Entertainment World, China Yang-sheng (Nourishing Life) Paradise, and the City of Caves. These destinations compose the tourism business segment of the Company.
Comments & Business Outlook
First Quarter Results :
Total net revenue was $11.8 million, a decrease of 20.4% as compared to $14.8 million in the first quarter of 2010
Net revenue from the tourism business was $1.9 million, a decrease of 68.3% year over year with a gross margin of 43.1%
Net revenue from the media business was $9.9 million, an increase of 12.6% year over year with a gross margin of 75.3%
Gross profit was $8.3 million a decrease of 30.5% to compared to $11.9 million in the same period last year
Net income attributable to China Yida Holding Company was $3.96 million, a decrease of 44.5% as compared to $7.1 million posted in the same period last year
Fully diluted EPS was $0.20 per share compared to $0.37 in the first quarter of 2010
"Our first quarter results were impacted by the lingering effects of declining tourist traffic at our Great Golden Lake destination as a result of last year's floods. While the physical damage to the facilities was repaired late last year, the region's natural landscape continues to recover. We are currently developing a new marketing strategy that will educate the public that Great Golden Lake has regained its former state of natural beauty and is an attractive tourist destination. We anticipate a rebound in visitor traffic at Great Golden Lake beginning in the third quarter ," said Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida.
Liquidity Requirements
We believe that our currently available working capital, credit facilities referred to above and the expected additional credit facility should be adequate to sustain our operations at the current level for the next twelve monthsWe believe that our currently available working capital, credit facilities referred to above and the expected additional credit facility should be adequate to sustain our operations at the current level for the next twelve months.
Please note that the above statement and the statement made in CNYD 2010 third quarter 10Q..
In 2010, we have entered into agreements to develop three new tourism projects, the Ming Dynasty Entertainment World in Bengbu City, Anhui province, the China Yang-sheng (Nourishing Life) Paradise in Zhaungshu City, Jiangxi province, and the City of Caves in Fenyi City, Jiangxi province, which represent our commitment to expanding our business operations by applying our current business model to the development of other valuable tourist destinations throughout China. We expect these three projects will complete their first phase of construction and be open to the public by the end of 2012. In addition, in September 2010 we timely announced the grand opening of our Yunding Park to the public. Over the course of the next few years, we intend to further grow and expand our businesses in China’s tourism, media, entertainment and other related industry by acquiring additional tourist areas. Such acquisitions will be financed either through our revenues and cash flows or by financings.
Somewhat contradicts verbiage in its 2010 year end press release:
Management reaffirms its belief that, despite the recent setbacks, China Yida can finance all of its on-going capital expenditures from cash on hand, cash from operations and bank loans secured against its land bank.
Comments & Business Outlook
Fourth Quarter Highlights :
Total net revenue decreased 15.1% to $12.3 million, compared to $14.5 million in the fourth quarter of 2009
Net revenue from the tourism business dropped 62.5% year over year to $2.2 million , with a gross margin of 44.3%
Net revenue from the media business increased 17.9% year over year to $10.1 million , with a gross margin of 77.8%
Gross profit decreased 22.4% to $8.8 million, compared to $11.4 million in the same period last year
Net income attributable to China Yida Holding Company decreased 10% to $5.3 million, compared to $5.9 million in the same period last year
Fully diluted EPS was $0.26 per share, compared to $0.34 in the fourth quarter of 2009
"Our 2010 results were adversely affected by a significant decline in tourist traffic at our Great Golden Lake destination during the back half of the year, as a result of the summer flash floods. I believe we have a two-phase process to recover from the unexpected damages caused by the floods. We successfully completed the first phase in early December of last year, that is, we recovered from the physical damages to facilities in the destination and re-opened it to the public. Now, we are in the second phase which requires us to strengthen the marketing effort to re-build Great Golden Lake's image in order to attract tourist traffic back to previous levels ," Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida stated.
Management reaffirms its belief that, despite the recent setbacks, China Yida can finance all of its on-going capital expenditures from cash on hand, cash from operations and bank loans secured against its land bank.
Investor Presentations
Officers of China Yida Holding, Co. presented information th Annual Consumer Conference held by Cowen and Company on January 10-11, 2011 in New York City.
Investor Presentations
Officers of China Yida Holding, Co. presented
information and participated in information sessions with analysts and investors during the Brean Murray, Carret & Co. 2010 China Growth Conference on November 17-18, 2010 and the Maxim Group Growth Conference on November 18, 2010 in New York City.
Liquidity Requirements
In 2010, we have entered into agreements to develop three new tourism projects, the Ming Dynasty Entertainment World in Bengbu City, Anhui province, the China Yang-sheng (Nourishing Life) Paradise in Zhaungshu City, Jiangxi province, and the City of Caves in Fenyi City, Jiangxi province, which represent our commitment to expanding our business operations by applying our current business model to the development of other valuable tourist destinations throughout China. We expect these three projects will complete their first phase of construction and be open to the public by the end of 2012. In addition, in September 2010 we timely announced the grand opening of our Yunding Park to the public. Over the course of the next few years, we intend to further grow and expand our businesses in China’s tourism, media, entertainment and other related industry by acquiring additional tourist areas.
Such acquisitions will be financed either through our revenues and cash flows or by financings and sales of our stock or other securities.
Comments & Business Outlook
Third Quarter 20 10 Highlights
Total net revenue decreased 21.2% year over year to $11.0 million
Net revenue from the media business increased 14.6% year over year to $9.7 million
Net revenue from the tourism business decreased 76.4% year over year to$1.3 million
Operating income was $6.6 million
Net income attributable to China Yida Holding Company was$4.7 million , compared to $7.1 million in the same period last year
Fully diluted EPS was $0.23 per share, compared to $0.40 in the third quarter of 2009
"During the third quarter the good performance of our media businesses was offset by a significant decline in tourist traffic at our Great Golden Lake destination as a result of the summer flash floods," Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida stated. "Despite this setback, we are encouraged by progress in a number of areas that we believe will position us for positive results going into 2011. During the quarter we renewed our contract to operate FETV for an additional 5 years, opened Yunding Park, and strengthened our management team to support the development of our new tourism destinations. With a unique business model combing high quality tourism and media assets and a strong pipeline of new tourism destinations under development, we believe that we remain well positioned to deliver positive results for our shareholders in the quarters ahead."
Business Outlook
Towards the end of the third quarter the Company opened Yunding Park to visitors, thus successfully expanding its portfolio of world class tourism destinations under management. The number of visitors to Yunding in the fourth quarter 2010 is expected to reach 30,000 visitors with average revenue estimated to reach RMB 160.00 per visitor.
The Company is currently in consultation with the Taining government to reopen Shangqing River and hopes this can be done in the current fiscal year. Currently management expects 60,000 tourists will visit the Great Golden Lake destination in the fourth quarter 2010, compared to 163,000 in the same period of 2009.
Management expects that, with improved highway access and the recent decision by UNESCO's World Heritage Committee to declare "China Danxia", including the Golden Lake, Shangqing River, and Zhuangyuan Rock, as a natural site on UNESCO's World Heritage List, visitor traffic to the Great Golden Lake will recover in the quarters ahead.
The Company expects 35,000 tourists to visit its Tulou destination in the fourth quarter of 2010, down from 55,000 in the same period of 2009. The reduction in visitor traffic is attributed to roadwork in the region that restricted access to the tourist spot.
On the media side of the business the Company expects continued and gradual increase in prices as well as demand for airtime at both FETV and "Journey through China on a Train". As a result the media business should provide a steady contribution to top- and bottom-line results in the fourth quarter 2010.
With these developments in the background the Company is lowering its expectation for full year revenue and net income to be in the range of $55-56 million and $25-26 million , respectively.
"Despite disappointing results from our tourism business in the third quarter, we continue to expect a number of positive catalysts in the weeks ahead and believe we have an opportunity to build the leading portfolio of highly desirable destinations for China's rapidly developing tourism industry. We also expect our media assets to perform reasonably well and provide support to our overall financial performance in the quarters ahead," Dr. Chen Minhua concluded.
Looking into the future, the Company's three projects in Anhui and Jiangxi are on track and are expected to start to generate revenue in 2012. The Company expects its cash on hand and cash flow from operations to be sufficient to fund the investment over the next 2 years which is estimated to be a total of US$ 63.0 million . If necessary, the Company also has access to bank loans that will be secured by land grants from local governments supporting these projects. Land use rights grants for 1,730 Mu (1 acre = 6.07 Mu) of land are current being reviewed for approval at the provincial level in Anhui and Jiangxi .
Comments & Business Outlook
Second Quarter 2010 results:
Total net revenue increased by 27.0% to $16.4 million , compared with $12.9 million in the second quarter of 2009.
Net revenue from the media business grew 18.2% to $9.3 million , compared with $7.9 million in the same period of last year. Advertising revenue from FETV during the second quarter of 2010 was $7.9 million , approximately the same level as last year. The "Journey through China on the Train" infomercial program generated $1.4 million in revenue for the quarter, compared to no revenue in the second quarter of 2009 when the project was in development stage. Net revenue from the tourism business increased 40.9% to $7.0 million , compared to $5.0 million in the second quarter of 2009.
Net income for the second quarter of 2010 was $8.1 million , or $0.41 per diluted share , an increase of 16.7% , compared with a net income of $7.0 million , or $0.39 per diluted share , in the second quarter of 2009.
Business Outlook:
Subsequent to the end of the quarter the Company was able to reopen partial operations at the Great Golden Lake in the aftermath of two sets of flash floods experienced during the months of June and July 2010 . As of this date, most of the scenic areas including Golden Lake , Zhuangyuan Rock, Luohan Mountain and Taining Old Town have been reopened to the public, and management expects to reopen Shangqing River in early September 2010 .
Management expects a record high volume of visitors to the Great Golden Lake during China's National Holiday, following the decision by UNESCO's World Heritage Committee to "China Danxia" as a natural site on UNESCO's World Heritage List on August 1, 2010 . Golden Lake , Shangqing River, and Zhuangyuan Rock are all part of China Danxia and have been well publicized in the Chinese media recently, resulting in a high degree of visitor interest.
In addition, the expressway connecting Wuyi Mountain and the Great Golden Lake is expected to be completed and put into use by September 2010 . Management believes this will also benefit the Great Golden Lake destination, as Wuyi Mountain attracts approximately two million visitors per year. The Yunding Park remains on target to open in September 2010 just in time for China's National Holiday.
"Despite the temporary shutdown of operations due to the unprecedented flooding in the Great Golden Lake's region, we expect a number of positive catalysts for our tourism business in the second half of the year, which should result in another year of record revenues and net income for China Yida," said Dr. Chen.
Based upon currently available information, the Company expects :
Total revenues for 2010 to be in the range of $67-68 million . N et income in the range of $32-33 million .
Please note : On July 6, 2010, the GeoTeam® removed all Chinese stocks that were on GeoBargains and GeoSpecial lists to respective Radar lists as we complete our "quality assessment." *** Very Important GeoTeam note . We have yet to verify if the Chinese filings for ChinaHybrid stocks we monitor match respective SEC filings. We are in the process of completing this task. Although we are not totally convinced that SAIC filings are an accurate represenation of financial statements the issue is impacting stock prices. Conservative investors may want to limit exposure or buy put options on stocks, that have this availability, as insurance against long positions, until we publish our findings. Odds are we will identify some promising companies that will fail this litmus test. see relevant articles
see relevant articles
GeoBargain Notes
Added to the GeoSpecial list on July 14, 2009 @ $9.01
Catalyst: Had been reporting strong EPS growth; New tourist ventures are expected to add a new phase of revenues.
"On June 18, 2010 the Taining County in the Fujian Province of China recorded an average 9.2 inches of rainfall within 24 hours, causing flash floods in the county. The entire county suffered enormous damage in this disaster. China Yida's tourism properties within the Great Golden Lake suffered unprecedented damage, with total impairment of tangible assets estimated at $0.5 million. In addition, the Great Golden Lake tourism area is expected to be closed until June 30, 2010, which is expected to lead to an estimated direct loss in revenues of approximately $0.3 million. The expected Great Golden Lake reopening date is subject to change, and will depend on weather conditions as well as progress in the cleaning and restoration effort . Management is pleased that visitors and employees were reported safe and unharmed during the flood, and that the appeal and beauty of the natural resources in the area have not been affected."
The fact that the company has some monster 2009 EPS quarters they are going up against (Around .40 for each of last three quarters of 2009) also poses some challenges.
Basically we have another situation where short-term we are faced with some EPS growth challenges. If history is our guide, fear will eventually create an immense opportunity to invest in the companies that prove they can meet quality litmus tests enact shareholder friendly moves . Credibility can also be restored if independent legal/SEC opinions validate accounting practices currently in question.
With a cash balance of approximately $31.06 million and 2010 annualized operating cash flow tracking at about $32.0 million, liquidity seems intact . However, the company has left the door open for more dilution:
"In April 2010, we engaged two new tourism projects, the Ming Dynasty Entertainment World in Bengbu City, Anhui province, and the China Yang-sheng (Nourishing Life) Paradise in Zhaungshu City, Jiangxi province, which represent our commitment to expanding our business operations by applying our current business model to the development of other valuable tourist destinations throughout China. We expect both projects will complete their first phase of construction and be open to public by the end of 2012. Over the course of the next few years, we intend to further grow and expand our businesses in China’s tourism, media, entertainment and other related industry by acquiring additional tourist areas. Such acquisitions will be financed either through our revenues and cash flows or by financings and sales of our stock or other securities . "
Long-term investors should read Drexion’s post from March 24, 2010 .
Our intent over the short-term is to build a check list to assess the risk position of firms in the ChinaHybrid space. For the time being this will consist of the following: (this list is likely to grow substantially)
-Is the company's auditor ranked in the top 100?Public Company Oversight Board ) may be denied access to investigate the practices of the auditing firm. Short sellers have been using this information as a tool to validate their opinions.
Criteria
Meets Criteria
Notes
Top 100 Auditor
Yes; Top 10
BDO China
Is Auditor Located in U.S.A
No
Shenzhen, China
Satisfactory Internal Controls
YES
Our Chief Executive Officer and Chief Financial Officer concluded that as of the end of the period covered by this report, our disclosure controls and procedures were effective and adequately designed
No Legal issues
Yes
None Found
Customer Concentration
Yes
There were no major customers which accounting over 10% of the total net revenue for the three months ended March 31, 2010)
Cash Flow Ratio is Greater than 1
Yes
5.62
Cash Ratio is Greater than 1
Yes
5.74
Buying Back Stock/Insider Buying
No
n/a
Short term and risk adverse investors should be aware of the quality issues currently present in the ChinaHybrid Space, questioning the validity of what seem like solid fundamental stories. It is beginning to get ugly so be cautious and understand that more pain may have to be endured, as ChinaHybrids are easy prey for short investors. The broad brush that is being applied to theses stocks appears unfair, but we can�t ignore the psychological impact this can have on investors� portfolio decisions. If history is our guide, fear will eventually create an immense opportunity to invest in the companies that prove they can meet quality litmus tests enact shareholder friendly moves . Credibility can also be restored if independent legal/SEC opinions validate accounting practices currently in question.
We have yet to verify if the Chinese filings for ChinaHybrid stocks we monitor match respective SEC filings . We are in the process of completing this task. Conservative investors may want to limit exposure or buy put options on stocks, that have this availability, as insurance against long positions, until we publish our findings. Odds are we will identify some promising companies that will fail this litmus test.
Please note: On July 6, 2010, the GeoTeam ® removed all Chinese stocks that were on GeoBargains and GeoSpecial lists to respective Radar lists as we complete our "quality assessment."
***Very Important GeoTeam® note . We have yet to verify if the Chinese filings for ChinaHybrid stocks we monitor match respective SEC filings. We are in the process of completing this task. Although we are not totally convinced that SAIC filings are an accurate represenation of financial statements the issue is impacting stock prices. Conservative investors may want to limit exposure or buy put options on stocks, that have this availability, as insurance against long positions, until we publish our findings. Odds are we will identify some promising companies that will fail this litmus test.
see relevant articles
Comments & Business Outlook
Dr. Chen Minhua, Chairman and Chief Executive Officer of China Yida, stated , "We are very pleased to report strong profitable growth for the first quarter of 2010 , driven by the increase in visitors to our Great Golden Lake park, as well as higher advertising revenue from FETV, and revenue contribution from Hua'An Tulou and railway media. We recently signed two new tourism projects outside the Fujian Province to further expand our capacity to take advantage of the flourishing tourism and leisure market in China. As we look to the future, we feel confident that our track record of execution, industry leading portfolio of tourism and media assets, and strong pipeline of new opportunities positions well to participate in the expected growth of the leisure industry in China."
For the media business management expects 2010 organic growth of 5-10% in advertising revenues from FETV. As the initial phase defined in the management agreement with FETV station will expire in July 2010, the management has started negotiation to secure the extended management term. As of this date, the negotiation is going well and within management's expectations. In addition, the Company will continue its marketing efforts to expand the advertising client base for the "Journey through China on a Train" infomercial program.
Management believes the Company's tourism business will achieve strong growth in 2010 both at existing and newly opened tourist attractions. The high-speed train between Fuzhou and Xiamen was put into use in April 2010, which makes the transportation much easier between the two largest cities of Fujian Province. The management expects that the high speed train will help bring more visitors to their tourism destinations in Fujian Province. Also, the expressway connecting Wuyi Mountain and the Great Golden Lake is expected to be completed and put into use by September 2010, which the management believes will greatly benefit the Great Golden Lake destination. The construction of Yunding Park however, has been affected by poor weather. Management is working hard to catch up on the schedule and looks forward to opening the park to tourists in September 2010, i.e. prior to China's National Holiday.
"We currently have two world class tourism destinations - Great Golden Lake and Hua'an Tulou - under operation with strong growth, and a new large recreational park - Yunding Park - opening to visitors soon. In addition, we have two promising projects outside Fujian Province which we expect will come on line in 2012. As we leverage our strong tourism management expertise and our portfolio of premium media assets, we believe China Yida to deliver long term sustainable growth and to create meaningful and lasting value to our shareholders," Dr. Chen Minhua added.
Conference Call Notes
GeoMember Drexion's take on CNYD 2010 year end conference call:
1) Visitors to Toulou tourist attraction going to be around 160 thousand in 2010 (This could add another $3.5 million to 2010 revenues . In 2009 Toulou visitors and revenues were around 50.0 thousand in 2009 and $1.7 million, respectively)
2) Yunding tourist venture 2010 revenues are expected to increase 50M RMB ($7.3 million ).
3) Train segment did $1.6 million revenue in 2009 and they expect 3.5x to 5x in 2010. So assume 4x or an additional $4.5 million revenue in 2010 .
My 2010 revenue calculation :
$3.5 + $7.3 + $4.5 = $15.3 million of incremental revenue gains.
Total 2009 revenue was $51.2 million. This brings us to $66.5 million or 30% revenue growth.
This is not including ANY:
Growth from the FE-TV segment ($31.5 million in 2009, will grow at least 10% or $3.15 million more revenue) Growth from the Golden Lake ($18.5 million revenue in 2009, should grow at LEAST 35% in 2010 or $6.5 million )
If you tack that expected growth on as well, that means another $9.65 million revenue more or $76.15 million revenue expected for 2010 .
$76.15 million would mean = 49% revenue growth ... And this is with a conservative 10% growth for FE-TV and 35% for Golden-Lake.
Note: This does not include any possible acquisitions from the latest financing deal.
Special Situations
Correction: Yesterday, our original third quarter note highlighted nine months results. We have corrected the information to include the third quarter results. The correction results in an even more bullish CNDH story.
China Yida Holding reported strong 2009 third quarter results, experiencing strong growth in both its tourism and media marketing divisions. We are speculating that momentum will continue to build as the Company soon realizes benefits from two new tourism ventures. We do need to be mindful to the possibility of an increase in shares outstanding in the future:
"Over the course of the next few years, we intend to grow and expand our businesses in China’s tourism, media, entertainment and other related industries. We expect to acquire additional tourist areas that will enhance our reputation as a world-class company that develops and manages tourist attractions. These acquisitions will be financed either by our revenues or by funds raised from sales of our stock or other securities. With respect to the mass media business, we expect to grow by acquiring another operating television network ."
Qtr. Ended March
3rd Quarter 2009 3rd Quarter 2008 Period Change
GAAP Revenue
$8.5 million
$5.8 million
49.1%
GAAP EPS
$0.40
$0.28
42.9%
Tax Rate
25.3%
2.9%
772.4%
Fully Tax-Adjusted EPS a
$0.40
$0.22
81.8%
Fully Diluted Shares
17.9 million
17.3 million
3.5%
Source: PR Newswire (November 17, 2009)
The GAAP EPS growth of 42.9% is no doubt impressive. However, astute investors should key in on the fully taxed adjusted EPS growth of 81.8% . The GeoTeam ® prefers to observe apples to apples comparisons. a For valuation purposes, The GeoTeam® prefers to adjust EPS to reflect a standard United Chinese tax rate of 25 %.( Previously we had used a U.S. tax rate of 36%)
Comments & Business Outlook
Looking forward, Yida's tourism business is expected to experience strong growth driven by existing and newly opened tourist attractions supported by marketing activities nationwide and the addition of services to the Company's scenic spots. The Company also expects moderate organic growth in advertising revenues from its existing media assets. In addition, China Yida will continue to evaluate opportunities to acquire additional TV stations in other provinces where management can find attractive opportunities to replicate its media and tourism business model to accelerate its profitable growth.
Source: PR Newswire (November 17, 2009 - 7:30 AM EST)
Special Situations
The GeoTeam ® is taking a closer look at China Yida Holding Co. ($9.01)
The Company:
China Yida first division is contracted to provide managerial and media services to three tourist destinations in China.
The Company's second division receives advertising revenue by providing programming through one TV channel and Railroad-on-board program-infomercial programming.
Positive Points to Ponder
Industry growth rates of both company divisions have been experiencing growth well on excess of 10%.
The China advertising sector is becoming a "hot" sector on Wall Street.
New tourist revenue source on the horizon: CNDH has been only receiving revenue from its Great Golden Lake resort venture, one of its three contracted tourist destination agreements. CNDH helped increase visitors to this resort to 320 thousand in 2008, from 30 thousand in 2001. This track record bodes well for its two other tourist ventures. Beginning in the third quarter of 2009, the Company began receiving revenue from a second agreement (Hua'an Tulou destination). The third destination (Yunding) is slated to contribute to revenues in the second quarter of 2010.
Revenues have grown from 10.2 million in 2006 to $30.6 million in 2008 with a commensurate growth in net-income.
Pre-Tax profit margin is around 66%.
Under 10% total debt to equity.
What investors need to know
How many railroad lines are in China Yida's target market? It currently has arrangements with 31 railroad lines.
Can CNDH maintain above average margins?
Current ratio is under 2 to 1. Is the Company comfortable with this statistic?
What are time line terms of contracts in both divisions?
Is there is a need for equity capital? Although China Yida has experienced a robust net income growth of 42% year to date, EPS has been flat due to dilution. Comments from the company's 2009 second quarter 10Q shed some light on this issue and may be encouraging for investors:
"We currently generate our cash flow through operations which we believe will be sufficient to sustain current level operations for at least the next twelve months. In addition, in February 2008, we completed a $14 million financing and we intend to use the proceeds to expand our operations and improve the “Great Golden Lake” and increase the number of visitors we can attract to the destination. In 2009, we intend to continue to work to expand our tourism services and mass media outlets, including the acquisition of a provincial-level education TV station."
The GeoTeam ® is speculating that revenues will get an immediate boost from its new tourist ventures. We are therefore coding CNDH as a GeoSpecial . If we can verify that dilution won't be a factor going forward, then this story becomes more appealing and we would likely qualify the Company as a GeoBargain. At a P/E of only 9.40 times GeoCalculated tax adjusted trailing twelve month EPS of $0.93, value investors may find the stock appealing . Also, the company has recently affected a 1 for 4 reverse split, a common precursor to an exchange uplisting .
Please be aware that CNDH has a wide bid ask spread
