China Yida Holding Co (NASDAQ:CNYD)

Fourth Quarter 2012 Results

• Total consolidated net revenue for the Company's two business segments, Tourism and Media, was $6.1 millionin the fourth quarter of 2012, a decrease of 25.5% as compared to $8.2 million in the year-ago quarter. A review of each business segment follows.
• Gross profit for China Yida's consolidated operations was $3.3 million in the fourth quarter of 2012, representing a gross profit margin of 54.0%, compared to gross profit of $5.3 million and a gross margin of 63.8% for the comparable period of 2011.
• The net loss attributable to China Yida Holding Company for the fourth quarter of 2012 was $1.5 million, or $0.39 per diluted share, as compared to net income attributable to China Yida Holding Company of $1.5 million, or $0.38 per diluted share, for the fourth quarter of 2011.

"As previously stated, China Yida's mission is to be a preeminent tourist company with all of its operations to consist of existing and new tourist destinations, and so I am pleased to report that the Company's tourist segment showed a solid revenue gain of 14.8% in fiscal 2012 compared to fiscal 2011," stated Dr. Minhua Chen, Chairman and Chief Executive Officer of China Yida. "We are also pleased to report a robust 68.5% rise in tourism revenue for the fourth quarter of 2012 versus the year-ago quarter driven by increased visitor traffic to our two prime tourist destinations. However, we expect continued pressure from the high levels of debt that we have had to assume to fulfill our commitment to local governments to develop our new tourist projects outside Fujian Province. Therefore, we expect further losses in the quarters ahead and a loss for the full year 2013."

"We are especially pleased to see that visitor traffic to the Great Golden Lake has normalized this year and that a record number of tourists visited Yunding Recreational Park in the fourth quarter. We believe that both of these tourist destinations will generate even greater tourist traffic once ongoing road access issues are resolved," CEO Minhua Chen continued. "Given that the fundamentals in China's tourism market remains strong, we continue to be committed to our participation in this market and we will work hard to prevail despite our current funding challenges."

Business Update and 2013 Outlook

The Company experienced vastly improved attendance at its Great Golden Lake and Yunding Recreation Park tourist destinations in the fourth quarter of 2012 attributable to the promotion efforts of the Company's tourist agency as well as enhanced tourist attractions at the Yunding site. For the year, tourist traffic increased 9.4% at the Great Golden Lake to 339,000 visitors and tourist traffic increased 38.7% to 165,000 visitors at Yunding Recreational Park. The Company believes that there is room for improved tourist traffic to both tourist destinations when road construction that will enable easier travel to both sites is completed.

Third Quarter 2012 Results

• Total net revenue was $6.3 million, a decrease of 43.6% compared to $11.2 million in the year-ago period
• Gross profit was $3.5 million, a decrease of 54.8% compared to $7.7 million in the year-ago period
• Operating income was $0.3 million compared to $4.9 million in the third quarter of 2011.
• Net loss attributable to China Yida Holding Company was $1.0 million, compared to net income attributable to China Yida Holding Company of $3.2 million in the year-ago period
• Fully diluted loss was $0.05 per share compared to earnings $0.16 per share in the year-ago period

"We saw a solid level of tourist traffic to two of our key tourist destinations in the third quarter which drove a modest rise in revenue in our tourism segment. However, the quarter marked the expected contraction of our media business, which experienced the full effects of regulations that seriously hamper the means and mode of advertising. As a result, we reported a loss in the quarter and anticipate an eventual further move away from this business segment. Most important, we are committed to our vision of creating a pre�minent tourist company and therefore continue to focus our efforts on developing an array of attractive tourist destinations," commented Dr. Minhua Chen, Chairman and Chief Executive Officer of China Yida.

"We are especially pleased to see that visitor traffic to Great Golden Lake has stabilized with the site's full recovery and that visitor traffic to Yunding Park has begun to grow. Further, we believe that both tourist destinations have substantially greater visitor potential once ongoing road access issues are resolved," CEO Chen continued. "The development of our three new properties is largely on schedule and we expect to commence operation of these new tourist destinations during the first half of 2013. Given that the fundamentals in China's tourism market remain strong, we are confident that our tourism segment can achieve continued growth and that our strategy of developing distinctive and varied tourist destinations will succeed in the long run."

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."

First Quarter 2012 Results

• Total net revenue was $7.7 million, a decrease of 34.4% compared to $11.8 million in the
  year-ago period
• 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.

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.

Third Quarter 2011 Results

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.  

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.

Third Quarter 2010 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 millionin 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.

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.
  
• Net 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

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.

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)