The first-quarter results of Focus Media Holdings Ltd on the Nasdaq outperformed NetEase.com Inc, making it the best Chinese concept share on the US exchange market.

Focus Media CEO Jiang Nanchun's personal wealth shot up to US$700 million on his 25 per cent stake in the company.

The financial statement, released last Friday, showed that Focus Media's pre-tax revenue for the first quarter was US$33.1 million, a 246 per cent surge over the same period last year.

The company reported a net profit of US$9.4 million, more than 2.5 times that of the first quarter of 2005.

The release sparked a quick response from the stock market, pushing Focus Media's share price up 12 per cent to close at US$69.18 last Friday.

Based on 41.55 million shares released, Focus Media's overall stock value reached US$2.87 billion, exceeding the US$2.79 billion record from NetEase.

Focus Media's first-quarter statement combined for the first time the performances of Framedia and Target Media, the company's two recent acquisitions.

In November last year, Focus Media purchased 100 per cent of Infoachieve Ltd to take over Framedia, a Shanghai-based advertising company which owned the largest elevator advertising network in China.

In January this year, Focus Media acquired competitor Target Media at a price of US$325 million.

The two acquisitions consolidated Focus Media's unrivalled position in China's fast-growing out-of-home advertising market, mainly advertisements seen in offices and retail stores.

According to the statement, the office liquid crystal display (LCD) advertising network more than doubled its contribution over last year to reach US$21.5 million in the first quarter.

Advertisements on the LCDs of retail stores were sold for US$5.3 million and poster advertisements US$6.1 million during the period.

After it merged with Target Media, Focus Media cut down the costs of developing and operating office LCD advertisements throughout the country, Jiang Nanchun was quoted by the Oriental Morning Post as saying.

He was also happy to see the rental costs of the LCD locations in offices had dropped.

All this means the synergistic effect of the acquisitions is taking shape.

Jiang said his company will capture more offices and phase out the discounts on LCD advertisements offered in the past to fight the competition.

Prior to Focus Media's financial statement, other Chinese concept shares on the Nasdaq also released their first-quarter statements.

NetEase posted a net profit of US$36.6 million while Sina.com saw net profits drop by 30 per cent to US$7 million.

In terms of price-to-profit ratio, measuring a listed company's profitability, Focus Media came top at 82.36, followed by Sina.com at 38.88 and NetEase at 21.98.

In the three business models represented by the three listed companies, Sina.com, known as a "news supermarket," gained 44 per cent of its income from advertising while NetEase made 81 per cent of its income from online games.

Jiang made Focus Media known by initiating the brand-new concept of out-of-home LCD advertisements in the China market.

The Shanghai-based group boasts the country's largest out-of-home audio-visual advertisement network, which covers 100 cities and 100,000 terminals and has about 100 million viewers.

"Our expanding network enables us to achieve further media segmentation and provides advertisers with more targeted channels so as to improve their investment return," Jiang told the China Daily Shanghai & Delta edition in an earlier interview.

Audio-visual advertising on LCDs has mushroomed in Chinese offices, grocery stores, outdoor signs and posters in the past three years.

China's out-of-home advertisement spending was about US$1.4 billion in 2004, equivalent to one-third of the country's TV advertisement expenditure and half of newspaper advertising.

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