As i said...you better watch out though..don't be too optimistic...a loss of 1) exclusivity contract in an airport and 2) possible declining margins can really hit this stock...
Come olympic time, I'm sure they will jack up the lease rates or (already have)...when analysts see it they may balk......who knows how the general population will react to that. Anyway all looks good so far...
IMHO this is a momentum stock that has limited growth capabilities in the long term. The forward P/E ratio is sitting at around 70. In the short term...I believe the stock will perform fantastically due to a revised earnings estimates for 2008 (olympics).
I looked at the IPO prospectus and found everything to be sound. There are two issues to worry about in this company.
1) leasing price for TVs (rent at airports is rising at an astronomical rate yoy like 30%+ which may eat into profits).
2) preipo they really beefed up their earnings b/c increasing the ad time block by 20% or so (can't remember teh exact figures). They can only decrease the content so much and increase ad time so much. The YOY gains in earnings will probably not be so phenomenal as what we see in the IPO prospectus.
3) as long as this company doesn't do some BS like GA (they didn't write the fact that their hit game had a declining customer base in their prospectus and released that info 1-2 months post ipo), I see the price of this stock flying to the atmosphere in the next year or so.
4) they lose their exclusive right at the airports to operate then they are screwed.
In the end though....this company is in a hot market (china), advertising cannot be affected next year b/c of the olympics and in such a growing country, advertising is a relatively underdeveloped industry in china, and lastly.....this is a very targeted audience that AMCN is dealing with (I like FMCN b/c it's larger and more stable than AMCN but they don't have the niche guaranteed audience that AMCN does). IMHO, this is the stock to own...but again b/c they operate in such a small network and any loss of privelege to operate in the big airports will cause the stock to tumble greatly at any given time....
More profits here, but less stability....FMCN..more stability, but less profits.
The wisest thing to do is to split your money 50/50 into the two stocks...if i've done this I would have made so much more( off of previously poor decisions I made), but human greed always gets into the way :(