Subaye Sells Non-Core Businesses, Revises Guidance
PRNewswire-Asia, 5/03/10
Chinese Internet content service provider Subaye (Nasdaq: SBAY) announced today that it is exiting its trade services and entertainment businesses to focus on further development and growth of its higher margin, proprietary on-line video advertising business. To date, Subaye has sold its trade services business and certain assets of its entertainment business for a total of USD 7.0 mln in cash proceeds, and plans to sell the remaining assets of the entertainment business individually by the end of this fiscal year as terms are agreed to with buyers of those assets. Cash flow from operations of Subaye's core business coupled with the proceeds from the sale of non-core assets are expected to fund Subaye's organic growth objectives for the foreseeable future.
Subaye's core on-line video advertising business generated USD 26.7 mln in fiscal year 2009, contributing USD 5.5 mln, or 56%, of 2009 net income. Subaye's primary market for its on-line video advertising business today is Guangdong Province, home to over 3.6 mln SMEs.
The entertainment media business segment generated approximately USD 10.3 mln in revenues, or 21.4% of total sales, for fiscal year ended September 30, 2009.
Subaye now estimates fiscal year 2010 revenue of USD 38.3 mln and net income of USD 12.5 mln from continuing operations for the fiscal year ending September 30, 2010. For fiscal year 2011 Subaye expects growth in revenue and net income from continuing operations of 86.3% and 133.5% over fiscal year 2010 guidance, respectively, resulting in revenue of USD 71.3 mln and net income of USD 29.2 mln from continuing operations.
The preceding projections include assumptions based on the acquisition of new members in various provinces within Greater China. The projections do not include any revenues or profits potentially generated by Subaye's on-line 3D shopping portal, which is scheduled to be operational on August 31, 2010.
Keywords: online advertising guidance Internet revenue video advertising Subaye SBAY profit
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