$Focus Media(002027.SZ) First take: Focus Media's third-quarter report can be said to reflect the current difficult macro environment quite concretely.

(1) Revenue of 3.3 billion, falling within the expected range of several leading institutions (3.2-3.4 billion). The year-on-year revenue growth rate is 4.3%, significantly slowing compared to the previous quarter, which indirectly reflects the change in the advertising strategy mentioned by Dolphin last quarter, where "peak seasons are busier, and off-seasons are quieter."

(2) Net profit of 1.48 billion, with a year-on-year growth rate of 7.6%, slightly exceeding expectations, but mainly relying on investment income unrelated to the main business. Looking solely at the operating profit of the core main business, it actually declined by 9% year-on-year, below market expectations. Similarly, comparing the net profit attributable to the parent company after deducting non-recurring items, the growth rate also slowed to 4.5% (the difference in effective tax rates led to the discrepancy between the growth rates of net profit after deducting non-recurring items and core operating profit).

The decline in the profitability of the core main business is mainly due to rising credit impairment losses, followed by marketing expenses significantly exceeding revenue growth. Combined with the 17% increase in fixed assets compared to the end of the previous quarter and a 10% year-on-year growth in employee expenses, it indicates that Focus Media is actively expanding media locations while also expanding its sales team to seek more clients.

(3) The other two indicators reflecting the current environment, credit/asset impairment and accounts receivable turnover days, both showed a quarter-on-quarter increase in the third quarter, indicating that short-term customer payment pressure is increasing.