Raymond Huang – Senior Director, IR Herman Man Guo – Chairman and CEO Henry Ho – CFO

Gillian Chung – Morgan Stanley [Mai Yu] – ICBC International Wei Fang – CLSA

Good morning all sites and welcome to the AirMedia Group Inc. Third Quarter 2013 Earnings Conference Call. For the duration of the presentation, all lines will be placed in a listen-only mode. There will be opportunity to ask questions after the presentation, which instructions will be provided at a later stage. Now I would like to hand the call over to Mr. Raymond Huang, Senior Director of Investor Relations of the company. And I will be standing by for the Q&A session. Thank you. You may begin.

Hello everyone. Thank you for joining AirMedia's third quarter 2013 earnings conference call. Today Herman Man Guo, our Chairman and CEO, will present highlights for the third quarter of 2013, and Henry Ho, our CFO, will provide details on our financial results. Following their prepared remarks, the management team will be available to take your questions. Before management presentation, please allow me to read you our Safe Harbor statement. During this conference call, representatives of the company will make certain forward-looking statements. These statements are based upon management's current views and expectations with respect to future events and are not a guarantee of future performance. Furthermore, these statements are by their nature subject to a number of risks and uncertainties that could cause actual performance and results to differ materially from those discussed in the forward-looking statements. AirMedia does not undertake any obligation to publicly update any forward-looking statements whether as a result of new information, future events or otherwise, except as required by applicable law. Please refer to AirMedia's filings with the SEC including its Form 20-F for a discussion of important factors that could affect future results. Our press release and this call include discussion of unaudited GAAP financial information as well as some unaudited non-GAAP financial measures. Our press release contains a reconciliation of the unaudited non-GAAP measures to the unaudited most directly comparable GAAP measures. The press release is available on the Investor Relations section of AirMedia's website at ir.airmedia.net.cn. I would now turn the call over to our Chairman and CEO, Herman Man Guo.

Thank you, Raymond. Good morning and good evening everyone. Total revenues for the third quarter of 2013 reached $69.0 million, representing a year-over-year decrease of 5.6% from $73.1 million in the same period one year ago and a quarter-over-quarter increase of 7.3% from $64.3 million in the previous quarter. The year-over-year decrease was primarily due to decreases in revenues from digital TV screens on airplanes and traditional media in airports, which were primarily caused by AirMedia's termination of the operations of certain unprofitable or low-margin contracts as well as China's replacement of regular business tax with VAT in Beijing, one of AirMedia's key regions of operations. The quarter-over-quarter increase was primarily due to increases in revenues from most product lines other than traditional media in airports, which decreased quarter over quarter primarily due to AirMedia's termination of the operations of certain unprofitable or low-margin contracts. Currently our business focus are on two fronts. The first one is to turn around our unproductive product lines. The other one is to implement new products that are aimed to promote the long-term growth of the company. I'd like to share with you my thoughts and our developments on both of these fronts. First, to turn around our unprofitable product lines. We had GAAP net loss and a non-GAAP adjusted net income of $3.6 million in 2012. The number was not so satisfactory because although we had several profitable product lines [indiscernible] unprofitable product lines [indiscernible] in airports [indiscernible] gas station media network were eating into profits. If we are successful [indiscernible] these product lines around is the new priority [indiscernible] that our company will obtain decent profit levels. We have communicated with the investors regarding our turnaround strategy on our gas station media network in the past several quarters. As of November 17 we have installed LED screens in [150] gas stations in four cities. Advertisers' initial feedback on our LED screens in gas stations is extremely encouraging. We [indiscernible] cycles [indiscernible] available for sale, at the introduction phase of this new product, we [indiscernible]. All of the available LED screens [indiscernible] available were sold out during the introduction phase, which represented 100% utilization rate and gives us strong confidence in the future of this product line. Advertisers like [indiscernible] because it can help them reach and simultaneously deliver messages [indiscernible] of potential customers [indiscernible]. Some advertisers have expressed interest in signing large frame contracts for our LED screens in gas stations in 2014. We currently expect to operate 300 LED screens in gas stations throughout China by the end of this year and expect that this product line to break even in 2014. As for our digital TV screens in airports and the TV-attached digital frames, our other two unprofitable product lines, we believe we have found a way to turn them around. We have developed an interactive system with a large [indiscernible] which can attract the attention of air passengers and [indiscernible] them to watch and particularly the advertisement in an interactive way. More importantly, the budget of this interactive advertisement will come from advertisers, especially the budgets for events and promotions, which [indiscernible] able to reach [indiscernible] the advertisers [indiscernible] to our existing product lines. Our initial feedback from advertisers on this interactive [indiscernible] is very promising. We will upgrade our equipment in Beijing airport first as a trial and a sample and expect to operate these interactive screens in Beijing airport beginning from the first quarter of next year. Now on the development side, we expect that our mega-size LED network [indiscernible] revenue and the [indiscernible] for the company in the next fiscal year. In the third quarter of 2013, revenues from digital TV -- digital frames in airports which included revenues from mega-size LED screens increased 12.3% year on year and by 15.3% quarter over quarter to $39.2 million. By November 17, 2013 we already had mega-size LED screens in operation in 12 airports and have concession rights to operate mega-size LED screens in airports [indiscernible] airport. Our nationwide network of mega-size LED screens have begun to take shape. We have been considering the company's development strategy [indiscernible] with the emerging satellite and internet technology. A new business opportunity [indiscernible]. It is tied to the same demographic of our current media in airports and in the airplanes. We think [indiscernible] from the new [indiscernible] which can bring tremendous growth to the company in the next decade [indiscernible] the opportunity of the in-flight internet service. We believe that the in-flight internet [indiscernible] entertainment and represents excellent opportunities for our company. No doubt internet has been an integral part of people's daily lives. Pony Ma founder and CEO of Tencent recently said [indiscernible] that mobile internet is not only the expansion of PC internet but a game changer. Average use time per person on PC internet is 2.8 hours per day, while it is 15 hours a day on mobile internet. It seems that the mobile internet has become a habit and addiction for many internet users. But [indiscernible] how internet and telecom in the past [indiscernible]. So here comes the demand and opportunity. According to our online survey of approximately 300 Chinese airline [indiscernible] members conducted by [indiscernible] Monitor, a third-party market research firm, in March 2013, 80.6% of the participants in the survey are willing to pay for in-flight internet connectivity. We believe more and more people will have demand for and be willing to pay for in-flight internet connectivity so that they can continue to work, communicate with friends, or enjoy online entertainment while in the air. Whichever company is able to satisfy air traveler demand for in-flight and mobile internet service is in a position to capitalize on this opportunity. We have recently partnered with Hainan Airlines Group to form an [indiscernible] of the in-flight internet [indiscernible] the opportunity of in-flight internet service and multimedia platform on the airplanes of the member airlines of Hainan Airlines Group. Hainan Airlines Group, the fourth largest airline in China, now operates more than 400 airplanes on over [270] domestic and international routes that connect more than 190 cities. They are [indiscernible] of our business [indiscernible] in providing in-flight entertainment to air passengers and expanding our revenue sources. Now I'd like to elaborate our business model with you. Before that, I'd like to [indiscernible] at the early stages, the business and monetization model of PC internet before 2000 and mobile internet before this year will be [indiscernible] defined. With the expansion of user base, more and more business models were created. I believe this will also happen with in-flight internet. The business models I am going to talk about below [indiscernible] to the potential of the in-flight internet business. The first revenue source of our in-flight internet will be the expense -- be the connectivity paid by air passengers to get access to in-flight internet. In the [indiscernible] Monitor survey [we] just mentioned [indiscernible] who are willing to pay are willing to pay RMB20 or more per hour. The second revenue source of our in-flight internet will be sponsorship from internet companies for putting their content or services on our in-flight internet. For example [indiscernible] media to be our news provider, Baidu360 Search to be our search provider, and so on. The content and service provider [indiscernible] will depend on who pay us higher sponsorship fees. For those who do not want to pay, we will still provide them with enriching multimedia independent platform based on internet where they can read books, watch TV, and watch movies and TV, conduct in-flight shopping, book ticket on hotels, etcetera. We can also monetize this in our multimedia platform in different ways. We expect the third revenue of our in-flight internet will be advertisement on the in-air multimedia platform. We expect that the revenues of advertisements on the in-air multimedia platform will be much larger than revenues of our current digital TV screens on the same airplane. As a platform [indiscernible] every passenger with mobile devices which is -- which there are only limited number for [indiscernible] airplane. In addition, advertisements on the in-air multimedia platform can more effectively target best the customer [indiscernible] when air passengers choose the channels they want to see. The fourth revenue source of our in-flight internet [indiscernible] expect will be transaction fees generated when air passengers book flights and hotel rooms and [indiscernible] and other goods and services. We will share commission with the e-commerce companies for every transaction transacted in there. So both business models [indiscernible] initial ideas for potentially monetizing the in-flight internet business. We expect to [indiscernible] business models as the business develop. With that, I'd like to pass the call to Henry Ho, our CFO, to give you our financial results in [indiscernible] detail.

Thank you, Herman, and thank you everyone for joining our third quarter 2013 financial review. At the beginning I want to highlight what Herman had talked about on strategies. Number one, turning around loss-making product lines. We do it through installation of LED screens at gas stations and also our new interactive system. Number two, development of products and services with high growth potential, notably LED screens at airports and in-flight internet services. I believe these efforts in implementing the strategies will eventually be reflected in our financial results. Now we are expected to see -- sorry, we expected to see that our efforts in turning around the company are starting to pay off. With our termination of the operations of certain unprofitable or low-margin contracts and the record growth of our nationwide network of mega-size LED screens, our net revenues, which was total revenues minus business tax and other sales tax, increased by 7.4% quarter over quarter to $68.1 million, while our concession fee cost decreased by 7.8% quarter over quarter to $42.8 million. Now let me go through the details of our third quarter financial results with you. Total revenues for the third quarter of 2013 reached $69 million, representing a year-over-year decrease of 5.6% from $73.1 million in the same period one year ago and a quarter-over-quarter increase of 7.3% from $64.3 million in the previous quarter. The year-over-year decrease was primarily due to decreases in revenues from digital TV screens on airplanes and traditional media in airports which were primarily caused by AirMedia's termination of the operations of certain unprofitable or low-margin contracts as well as China's replacement of regular business tax with VAT in Beijing, one of AirMedia's key regions of operations. The quarter-over-quarter increase was primarily due to increases in revenues from most product lines other than traditional media in airports which decreased quarter over quarter primarily due to AirMedia's termination of the operations of certain unprofitable or low-margin contracts. Let's go through each product line. Revenues from digital frames in airports for the third quarter of 2013 increased by 12.3% year over year and by 15.3% quarter over quarter to $39.3 million. The year-over-year and quarter-over-quarter increases were primarily due to additional revenues from the rapidly growing product line of mega-size LED screens which added operations in additional airports. Revenues from digital TV screens in airports for the third quarter of 2013 increased by 31.5% year over year and by 35.9% quarter over quarter to $3.6 million. The year-over-year and quarter-over-quarter increases were primarily due to the fact that several large clients allocated additional revenues to placing digital TV screen advertisements with AirMedia and increased numbers of customers in the third quarter of 2013. Revenues from digital TV screens on airplanes for the third quarter of 2013 decreased by 32.6% year over year and increased by 33.4% quarter over quarter to $4.4 million. AirMedia did not renew its concession rights contract with Air China, which originally expired on December 31, 2012, until AirMedia re-obtained some advertising time on Air China's airplanes on October 1, 2013. The year-over-year decrease of revenues from digital TV screens on airplanes was primarily due to the decrease in revenues of digital TV screens on Air China's airplanes, which did not have operations for the full third quarter of 2013. The quarter-over-quarter increase of revenues from digital TV screens on airplanes was primarily due to the fact that AirMedia re-obtained some advertising time on AirMedia's airplanes starting from August 1, 2013. Revenues from traditional media in airports for the third quarter of 2013 decreased by 34.1% year over year and by 28.2% quarter over quarter to $13.3 million. The year-over-year decrease was primarily due to AirMedia's termination of certain unprofitable or low-margin contracts. AirMedia chose not to renew the concession rights contracts of most of AirMedia's traditional media in Shenzhen Baoan International Airport at the end of 2012, the billboards and painted advertisements on the interior of the gate bridges of Terminal 3 in Beijing Capital International Airport in the middle of May 2013 after the expiry of the relevant contracts and the billboards and painted advertisements on the exterior of the gate bridges of Terminal 3 of Beijing Airport in July 2013. The quarter-over-quarter decrease was primarily due to the expiration of the concession rights contract for the billboards and painted advertisements on the exterior of the gate bridges of Terminal 3 of Beijing Airport in July 2013. Revenues from the gas station media network for the third quarter of 2013 decreased by 15.6% year on year and increased by 46.7% quarter over quarter to $3.3 million. The year-over-year decrease was primarily due to the fact that some advertisers expressed interest in reserving their budgets for the LED screens that AirMedia plans to install in its gas stations, as well as China's replacement of regular business tax with VAT in Beijing. The quarter-over-quarter increase was primarily due to additional advertising from a large client that decided to use up the remaining amount of gas station media advertising in its framework contract with AirMedia before the yearend. Let's move on to other lines in the income statement. Cost of revenues for the third quarter of 2013 was $59.5 million, representing a year-over-year decrease of 4.8% from $62.6 million in the same period one year ago and a quarter-over-quarter decrease of 0.9% from $60.1 million in the previous quarter. The year-over-year decrease was primarily due to lower concession fees and lower agency fees for third-party advertising agencies. The quarter-over-quarter decrease was primarily due to lower concession fees which was partially offset by higher agency fees for third-party advertising agencies in the third quarter of 2013. There was a partial reversal of certain previously accrued agency fees of $0.8 million in the third quarter of 2013 that were waived by the related agents, compared to a partial reversal of certain previously accrued agency fees of $1.5 million in the second quarter of 2013 that were waived by the related agents. Cost of revenues as a percentage of net revenues in the third quarter of 2013 was 87.4%, up from -- down from 87.7% in the same period one year ago and up from 94.8% in the previous quarter. Concession fees for the third quarter of 2013 decreased by 3.9% year over year and by 7.8% quarter over quarter to $42.8 million. The year-over-year and quarter-over-quarter decreases were primarily due to AirMedia's termination of operations of certain unprofitable or low-margin contracts. Concession fees as a percentage of net revenues in the third quarter of 2013 was 62.8%, remaining relatively unchanged from the same period one year ago and decreasing from 73.2% in the previous quarter. The quarter-over-quarter decrease of concession fees as a percentage of revenues -- net revenues, I beg your pardon, was primarily due to the fact that concession fees decreased and net revenues increased as well in the third quarter of 2013. Total operating expenses for the third quarter of 2013 were 12.2% -- sorry, $12.2 million, I beg your pardon, representing a year-over-year decrease of 69.5% from $39.9 million in the same period one year ago and a quarter-over-quarter increase of 18.7% from $10.3 million in the previous quarter. Net loss attributable to AirMedia's shareholders for the third quarter of 2013 was $3.5 million, compared to net loss attributable to AirMedia's shareholders of $27.3 million in the same period one year ago and net loss attributable to AirMedia's shareholders of $4.9 million in the previous quarter. I will now go through some non-GAAP measures. These non-GAAP financial measures are calculated by excluding share-based compensation expenses and monetization of acquired and other intangible assets, impairment of goodwill and impairment of intangible assets from the corresponding GAAP measure. Non-GAAP adjusted loss from operation was $3.1 million for the third quarter of 2013, compared to adjusted income from operations of $557,000 in the same period one year ago and adjusted loss from operations of $6.5 million in the previous quarter. Non-GAAP adjusted operating margin was negative 4.6% for the third quarter of 2013, compared to 0.8% in the same period one year ago and negative 10.2% in the previous quarter. Non-GAAP adjusted net loss attributable to AirMedia's shareholders was $3.1 million for the third quarter of 2013, compared to adjusted net income attributable to AirMedia's shareholders of $4.3 million the same period one year ago and adjusted net loss attributable to AirMedia's shareholders of $4.5 million in the previous quarter. Next, let's talk about our balance sheet. Cash, restricted cash and short-term investments totaled $113 million as of September 30, 2013, compared to $126.3 million as of December 31, 2012. There were an increase of $7.4 million in prepaid concession fees and an increase of $15.4 million in other non-cash current assets from December 31, 2012. The capital expenditure for the third quarter of 2013 was $31.7 million, which was primarily for purchasing LED screens to be installed in our gas station media network. AirMedia currently expects its net revenues for the fourth quarter of 2013 to range from $76 million to $79 million, representing a year-over-year decrease of 4.4% to 8% from the same period in 2012 and a quarter-over-quarter increase of 11.7% to 16.1% from the previous quarter. AirMedia currently expects its concession fees to be less than $46 million in the fourth quarter of 2013, representing a year-over-year increase of 1.9% from the same period in 2012 and a quarter-over-quarter increase of 7.5% from the previous quarter. Moderator, would you please open the call for questions?

Thank you. Ladies and gentlemen, we'll now begin the question-and-answer session. (Operator Instructions). And your first question comes from the line of Gillian Chung from Morgan Stanley. Please ask your question. Gillian Chung – Morgan Stanley: Hi, good morning. Thank you for taking my questions. I have two questions. The first one is about the advertising outlook. Is -- I just want to know what percentage of the fourth quarter revenue has been secured by orders. And I also want to look at the breakdown of the sales, third quarter sales by advertising category. Can you also comment on the performance of these categories? And I have a second question. Thank you.

Henry here. Thanks for the question. You're asking on the advertising outlook but then you're asking for the fourth quarter, not the third quarter confirmed orders, is that right? Because third quarter is all actual. And then you're asking for the third quarter advertising industry outlook. So one is a fourth quarter, the other is a third quarter, is that correct? Gillian Chung – Morgan Stanley: Yes, yes, that's right.

Great. Let me do it one by one.

Let me answer your second question first. In the third quarter, the first category is still auto which accounted for 37% of our total revenues, which grew 31% quarter over quarter. The second largest category is consumer electronics which accounted for 11%, up 36% quarter over quarter. The third one is high-end food and beverage which accounted for 10% and up 14% quarter over quarter. The fourth one is finance which accounted for 9% and down 28% quarter over quarter. The down on finance was primarily due to the terminated billboard on the gate bridge of Terminal 3 which is mostly ICBC and Bank of China. Then Herman will answer your first question.

(Chinese language spoken)

Gillian, it's Henry. You asked a question of the fourth quarter guidance. The numbers that we've given, I think roughly about 80% to 90% have already been booked. That's the number that you want, right?

Yes. Let me briefly translate what Herman said. Is that recently CCTV has a new bidding for -- from what we've seen, that 2013 will -- 2014 still have certain challenges. We expect our top category will continue to be auto, high-end consumer goods, and also finance. But in the bidding of the CCTV, the Chinese wine and liquor, the performance was very bad. But although the -- from our feedback with our wine and liquor customers, they [indiscernible] contract for us, but they still have been down a lot. So the China's wine and liquor performance in 2014 might not be very good for us. But the good news is that some Chinese brands [indiscernible] make -- manufacture it for foreign brands are trying to build their own brands. So we are getting more new customers from the Chinese local customers who want to build their brands. So we expect to have more those kinds of brands in 2014. Gillian Chung – Morgan Stanley: Okay. Thank you. And my second question is on the in-flight internet services. Just trying to understand why do you decide a fund with third-party investors to participate in the fund. And how would you finance your part of the fund? Thank you.

Let me translate to Herman first.

(Chinese language spoken)

Okay. We believe in-flight internet is a good -- a very, very good [alternative]. We see it will have potential tremendous growth in the future and we see strong demand from air passengers. We have certain survey on that. Our target is that in the future we will sign similar contract. We aim to sign similar contract with other airlines. So we will have more market share. And so if we sign with other airlines, we may have a round of financing for the whole project, not only for the Hainan Airlines project but for the whole in-flight internet project for us. So we will have enough finance for the whole project. Now we will use part of the financing on the Hainan Airlines project. That will be our 40% part. And we like to have other key investors to participate in the Hainan Airlines project because we like to have partners to take the risk and share the benefit together with us. If those finance on the whole project in the future is very -- the result is very good, then we may pay 100% by ourselves in the Hainan Airlines programs.

Gillian, this is Henry. Let me add. It's more like the -- give an analogy, it's like the earth and the different satellites. This is -- Hainan Airlines is only the first step in what we want to build, just like a satellite network. Once a network is done, the value is a lot more than the single project. So that's the whole thing. And then if you want to build that network of satellites that we want, which means having contracts with different airlines, is a very large project. It's more than our existing financial results which that is why Herman was alluding to earlier that we will do a, on the upper level, there are two levels, one is the project level, the other is the company level, we will be doing other financing means for the overall big project, so that we can finance all of these different operations or different projects that will come in the future with the different airlines. Gillian Chung – Morgan Stanley: That's very helpful. Thank you.

Thank you.

Thank you.

(Operator Instructions). And your next question comes from the line of [Mai Yu] from ICBC International. Please ask your question. [Mai Yu] – ICBC International: Hi, hello, good morning. Thank you for taking my questions. I have two questions regarding the advertising strategy. You just mentioned that you have new advertisers from the local brand operators, and could you give us more color on that? What kind of category of this business? And also if you could give us any color on the company's top ten operation regions?

(Chinese language spoken)

The local brands try to be high end, they try to build their high-end image. So [indiscernible] like the home appliance, like the apparels, lady bags, shoes, those kinds of manufacturers are trying to build their high-end image, high-end brands.

This is Henry. I think you're asking what are the top ten of our existing customer or these new potential customers? If it is these potential customers, then a lot of them are from the southern area where they're exporters. Sorry. [Mai Yu] – ICBC International: Actually I wanted to know both, the existing customers and then the potential, yes.

You mean the operating region or the large customers, sorry? [Mai Yu] – ICBC International: Operation regions.

Operating region, we -- actually definitely in Beijing, Shanghai, Guangzhou will be our top three markets.

(Chinese language spoken)

And we see very good growth from the second-tier cities because we build our mega-size LED currently in other airports. So we see also good growth from the second-tier cities. [Mai Yu] – ICBC International: Okay. Thanks. I have another question regarding [indiscernible] industry [indiscernible] the users are transforming. Are there advertisers that transform from the traditional media to the so-called new media [indiscernible] PC to mobile? And want to know, the company has any strategy towards maybe the mobile side, these developers, operators on longer term?

Okay. Let me translate the question to Herman first.

(Chinese language spoken)

We have seen the trend from -- that advertisement from the traditional media to the new media or mobile internet. We also adopted two strategies to cope with this. The first one, as Herman mentioned, that we are building the in-flight internet for the Hainan Airlines Group. That is part of our [indiscernible]. We like to partner with more airlines. We like to build a large in-flight internet platform. We see it will have tremendous growth in the future. And the second one is that our TV-attached and digital frames, as we've said in our script, so we are -- we have done some research on that and we will start to have a trial in Beijing in the first quarter next year. We will have the interactive screens in airports. Then it can interact with the passengers in the airports. So passengers can use their mobile phone to participate in the [lucky draws] or to participate in the survey [after the] interactive screens. So that will -- the mobile of the air passengers will become our extension of our media, of our screens. So that will -- in this way we'll cope with the trend of the mobile internet. [Mai Yu] – ICBC International: Thanks for that. Actually I have a following question. Does the company expect the local brand [indiscernible] as a significant revenue contributor?

We see growth from those local brands. We see they were at new revenue resources, but we still expect our top three or top four categories continue to be auto, finance and food and beverage and consumer electronics.

Let me add, it's Henry. At the moment, fashion and apparel is 3.5% of our total revenue. For example, travel is 3.3%. Home appliances is 2.8%. So these things will grow we think. But still the large segment like auto is 36.7%, that's a much larger sector. So it will take time for these small brands or local brands to fill up -- to go up in our rank.

Your next question comes from the line of Wei Fang from CLSA. Please ask your questions.

Hello, Wei, are you on the line? Wei Fang – CLSA: Hello, can you hear me?

Yes, we can. Wei Fang – CLSA: Hello? Oh okay. Thanks for taking my call. Okay. Two questions. First one, regarding your new technology you're going to be building into your standalone screen frame, is that the internal technology or is it your [indiscernible] partner?

Wei, let me clarify first. It is not standalone frame, it's a TV-attached digital frame, the small one [indiscernible] TV. We partnered -- yes. We partnered with a third-party technology company. Wei Fang – CLSA: Thank you.

Why is it [indiscernible] is because this is a loss-making -- it's loss-making and we want to turn it around. That is why we're introducing the interactive to make it profitable. Wei Fang – CLSA: Okay, okay. And how much incremental technology investment that they have?

Wei, actually the technology cost is very low to us. The more important thing is to implement, buy the equipment. Those are [indiscernible] so we're testing it in Beijing. The other would be the obtaining of these lucky draw [indiscernible] that we're getting out. So we've got already a forecast internally, but still it's not -- we're not doing it for public disclosure. Wei Fang – CLSA: I see. So you are partnering with 3P technology providers and then the initial software is low cost to use but the upcoming equipment purchase will be more expensive. Okay. And --

That's right. Wei Fang – CLSA: This expense is to be capitalized or amortized. Right.

Yes, yes, they're amortized. Wei Fang – CLSA: Okay, okay. And second question, regarding your concession fee. It seems like you have a quarter-over-quarter uptick meaningfully from 3Q to 4Q. Just wondering, is that due to implement a new contracts or -- because I [indiscernible] seasonal for your concession fee.

Okay. Well, let me answer the concession fee question. The increase is over -- we expect quarter-over-quarter increases between $2.5 million to $3.5 million and actually a large part of it, more than half, is coming from our new airport LED. As you know, some of them, we're gradually rolling them in. So like quarter on quarter when you make comparison, the last quarter we don't have full [debt]. The other is more LED screens. And then we also, in the script we talked about the Air China TV [indiscernible] on TV which started in August 1. So now this fourth quarter we have a full quarter of fee. So roughly you have like over 50% accounted for by this. Then we have other new concession fees which are like some new introduction of business lines that we're working on [indiscernible]. Wei Fang – CLSA: Okay. Got it. Got it. Okay, thanks. And just a final question, do you guys -- where you guide the 4Q guidance, does that include a yearend kind of last-minute flush in terms of advertising budget? We have seen that last year in 4Q, right? Just wondering how the magnitude this year and how it's trending so far this quarter. Thank you.

Hi. The fourth quarter, yes, we've included budget flush there. The only difference from compared to the last quarter of 2012 is that we have already, I would say, the gateway, you know, the gate bridges, we have now renewed a large part of that gate bridges, and that's like -- we estimate that to be a loss of about $6 million per quarter revenues. And we also terminated the Shenzhen -- most of the traditional media in Shenzhen airport. So we see a year-over-year decrease from last year. Wei Fang – CLSA: Okay. Got it. Thank you so much.

Thank you.

(Operator Instructions). As there are no further questions, I would like to hand the conference back to your presenter today. Please continue.

Thank you for joining our today's call. Hope to talk with you next time. Bye.

Thank you.

Thank you.

Ladies and gentlemen, that does conclude our conference for today. Thank you for your participation. You may all disconnect.