Outsourcing: China TransInfo Closes Taxi Ad Deal

June 22, 2010 (FinancialWire) — China TransInfo Technology Corp., (NASDAQ: CTFO), a provider of transportation systems for highway and urban transportation management in China, said it has outsourced its taxi media advertising business in Hohhot, the capital city of Inner Mongolia Autonomous Region, and Urumqi, the capital city of Xinjiang Urgur Autonomous Region, to a local advertising agency in exchange for negotiated commission payments.

China TransInfo has the exclusive rights to operate the in-taxi GPS media platform in these two cities until the end of 2023.

In Hohhot, the company granted Inner Mongolia Shengtang Advertising Co., Ltd. advertising rights for five years to operate rooftop LED screens on 5,000 taxis, representing around 90% of all the taxis in Hohhot.

In exchange for granting these rights, China TransInfo will receive RMB 65.3 million (around $9.6 million) over five years, with RMB 10 million (around $1.5 million) in 2010 that will grow 15% annually in 2011 and 2012, and 10% annually in 2013 and 2014.

In Urumqi, China TransInfo granted Inner Mongolia Shengtang advertising rights for 13 years, effective from June 2010, to operate rooftop LED screens on 6,500 taxis, representing around 90% of all taxis in Urumqi.

In exchange for granting these rights, China TransInfo will receive RMB 260.9 million (around $38.2 million) over 13 years, with RMB 14 million (around $2.1 million) in the first year that will grow 10% annually from 2011 through 2014, grow 5% in 2015, remain flat from 2016 through 2019, grow 5% in 2020, and then remain flat in 2021 and 2022.

China-based China TransInfo, through its affiliate, China TransInfo Technology Group and the group company's PRC operating subsidiaries, is primarily focused on providing transportation information services and solutions based on Geographic Information System technologies.

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