Goldman Sachs: auto industry does not have a material impact on the media

Lead: Goldman Sachs published a study today saying that while NASDAQ:AMCN's performance was affected by the weakness of the auto industry, it accounted for a smaller share of the overall revenue of the NASDAQ:FMCN, plus other specific factors,　　Therefore, the overall performance of the media will not be materially affected. The following is a summary of the report: The news agency said in a conference call yesterday that due to the disruption of the supply chain caused by the Japanese earthquake, its first-quarter car advertising revenue was materially affected and the second-quarter revenue generated a negative impact of 6 million to 8 million dollars, And the second-quarter earnings guidance forecast grew only 6.5% to 10% year-on-year, not only below expectations, but also far below the year-on-year growth of 26% in the first quarter (when car advertising revenue grew 75% per cent year-on-year).　　It also raised concerns among investors about the media, which will announce its first-quarter results by the end of May. Analysis we believe that the overall business of the media will not be materially affected: (1) The focus media on the automotive industry relies on a much smaller, accounting for only 15% of its income, and the U.S. media in the first quarter of this ratio as high as 44%.　　We expect strong growth in the focus media's core FMCG advertising and E-commerce and emerging category ads, such as group deals and car rentals, to offset the slowing growth of the auto industry. (2) The geographical concentration of the media is lower than that of the American media, which obtains two-thirds of the digital frame revenue from the three major airports (about 50% of the total income). The three major airports account for a higher proportion of car advertising.　　We believe that car advertisers in the media are increasingly willing to diversify their spending to more cities (we estimate about 25 to 30 cities) in order to focus on the profit growth of the two or three-line cities, and the networks of the media can more effectively reach consumers in these cities. (3) Media outlets in the fourth quarter of 2010, said the analyst conference call, the car business is relatively weak, because the car sales speed has slowed, indicating the overall impact will be more limited. Car advertising growth will continue to slow, April car sales have negative growth, and the second half will be affected by weak sales and subsidies expired.　　But the impact on advertising spending can be shifted because, in an environment where demand is weak, brand owners will spend more money to promote them.　　The implication is that we maintain a "buy" rating for the shares in the media, as well as a 12-month 43-dollar target, with a 2012-year P/E ratio of 22 times times, and PEG (P/E ratio) at 1 times times the relative profit growth rate. Risk poster Framework market competition and rising costs. (Ding Macro)