on 2009-12-07 at $14.50 (-100.00% since Uplisting)
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.
The Company commenced the second phase construction for Yunding Park and expects to introduce a new restaurant in the gorges and valley rafting by the end of June 2011. The Company is also designing a camping center and a shopping plaza to provide tourists with multiple activity choices and experiences. Management expects that the average expenditure per tourist can be readily increased through a combination of catering, entertainment, transportation and shopping visitor expenditures once the camping center and the shopping center are put into operation. Tourist traffic is expected to accelerate even further once the construction of the expressway connecting Fuzhou and Yunding Park is completed in June 2012.
Based on operational results in April 2011, management is satisfied with the recovery of Shangqing River, although the negative impact on the Great Golden Lake from the flood last summer is expected to persist. The Company anticipates that normal operations will resume in the second quarter, with the number of visitors returning to seasonal levels in the third quarter of 2011.
In the near term, management expects FETV's advertising revenue to 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. The Company's media management team is actively seeking to target new sponsors to help alleviate any negative impact of these controls. Longer term, the Company views the controls as a positive development for FETV, as it is expected to upgrade its profile in the community. The management expects "Journey through China on the Train" infomercial program's revenue might decline slightly in 2011.
"Despite some short term disruptions to our top line, we remain optimistic about the future of our Company. With our valuable land reserve base, a solid tourism marketing model and an expansion plan that will ensure China Yida a very promising future, we believe we are well positioned to take advantage China's growing tourism industry for years to come." Management reaffirms its belief that the Company can finance all of its ongoing capital expenditures from cash on hand, cash from operations and bank loans secured with its tourism assets.
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.
Despite this setback, I believe we still have a clear growth plan and long-term visibility into the profitability of our business model. In 2010, we renewed our contract to operate FETV for an additional 5 years, we opened Yunding Park, and signed three new tourism projects outside Fujian Province. We also strengthened our management team to support the development of our new tourism destinations. With our business model combining 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 years ahead.
"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. 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."
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. 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 $25-26 million, respectively.
Looking into the future, the Company's three projects in Anhui and Jiangxi are on track and are expected to start to generate revenue in 2012. The Company expects its cash on hand and cash flow from operations to be sufficient to fund the investment over the next 2 years which is estimated to be a total of US$ 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.