Focus Media Acquires 15% Of VisionChina

Citigroup has published a research report on Focus Media Holding Limited (NASDAQ" FMCN) after the company announced jointly with VisionChina VISN that it is to acquire a 15% stake in VISN. In the report, Citigroup writes "We believe the strategic partnership will allow both companies to have higher bargaining power to grab more advertising budget from traditional TV stations. In addition, since Vision has the real-time broadcasting rights on its network, it may be beneficial for both companies to attract higher advertising budget if mobile TV eventually takes off in China. Since the earnings impact to Focus is still unknown, we believe, given the latest 4Q guidance from Vision, it is highly probable that the investment will be earnings accretive to Focus in 2011. We have not adjusted any of our estimates at this point." Citigroup maintains its Buy rating and $33 price target on Focus Media, which closed yesterday at $20.79.