Stock Alert for China MediaExpress Holdings Inc. (CCME)
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    Stock Alert for China MediaExpress Holdings Inc. (CCME)

    China MediaExpress Holdings Inc. (CCME), founded in 2003, is China’s largest television advertising operator on inter-city and airport express buses. The Company generates revenue by selling advertisements on its network of television displays installed on over 27,200 express buses originating in 18 of China’s most prosperous regions, including the four municipalities of Beijing, Shanghai, Tianjin and Chongqing and 14 economically prosperous regions.

    Share Statistics (19-May-11) FY 2009 FY 2010 % Chg Q4 2009 Q4 2010 % Chg
    Symbol CCME Revenue, $Mn 842.03 780.65 -7.3% 209.84 207.67 -1.0%
    Current price $2.16 Gross marg. 51.2% 52.6% 2.7% 54.8% 54.9% 0.2%
    52wk Range: $1.85-$23.97 Oper. margin 18.9% 23.7%
    Avg Vol (3m): 505,658 Net margin -14.6% 5.9% -140.4% 13.3% 9.1% -31.6%
    Market Cap. 438.39M
    Shares Outstanding 34.29M EPS, $ 0.83 1.07 28.9% 0.62 0.42 -32.3%

     

    Source: Reuters.com, SEC Filings.

     

    Investment Highlights

    Shares of CCME plummeted to a new 52-week low of on Wednesday after announcing it has received a delisting decision letter from NASDAQ. After two months of trading halt, the Company’s quotation for its common stock now appears in the Pink Sheets under the symbol CCME.PK. Shares in CCME were last traded on March 11th, dropping 4.3% to $11.88 before the trading halt was called.

    CCME had been subjected to questions about its corporate governance and cash balances. In March, the Company announced the resignation of its independent auditor and chief financial officer, resulting to a delay in its fourth-quarter earnings release.

    The Company had also been exposed to negative research reports early this year. Research firm Muddy Waters Research released a report alleging that CCME inflated revenue and profit in order to enrich management through earn-outs and stock sales. Citron Research had disputed the Company’s claim to be the fastest growing U.S.-listed Chinese media company, stating that the Company misrepresented the scope of its operations, its financial performance, and the extent of the Company’s claimed strategic partnership with a government-affiliated entity.

    In its latest release, CCME said its plans to appeal NASDAQ’s decision.

    CCME lost 81.82% on Thursday, closing the session at $2.16. Approximately 14.14 million shares have traded hands during the session, versus the three-month average volume of 505.66K.

    Visit CCME at www.ccme.tv

     

    Financial Summary

    For the quarter ended September 30, 2010, CCME reported revenue of $57.0 million, up 118% from 26.1 million in the same period a year ago.  During this period, the Company reported gross margin of 76%, compared to 67.0% in the same period of 2009.  Income from operations was $41.2 million, up 166% from $15.5 million in the third quarter of 2009.  Net income came in at $31.1 million, or $0.81 per diluted share, up 167% from $11.7 million, or $0.56 per diluted share, in the same quarter in 2009.

    For the nine-months period, the Company reported revenue of $155.0 million, up 142% from $64.0 million in the same period of 2009. Gross margin was 72.6% as compared to 64.1% in the year-ago period.  Income from operations was $103.8 million, up 179% from $37.2 million in the same period last year. Net income came in at $77.8 million, or $1.86 per diluted share, up 184% from $27.4 million, or $1.31 per diluted share, in the same period a year ago.  As of September 30, 2010, the Company had approximately $170 million in cash.

    Source: www.ccme.tv

     

    Financial Strength (19-May-2011) Company Industry Sector S&P 500
    Quick Ratio (MRQ) 1.32 0.45 0.70
    Current Ratio (MRQ) 6.85 1.58 0.59 1.02
    LT Debt to Equity (MRQ) 0.00 16.63 18.30 149.96
    Total Debt to Equity (MRQ) 0.00 21.06 30.95 196.55
    Interest Coverage (TTM) 0.17 0.28 17.80

    Source: Reuters.com, SEC Filings.

     

    Analyst Consensus

    No analyst recommendations and revisions data available.

     

    Technical Analysis

    Source: http://stockcharts.com

     

    Comparative Analysis

    Company Name Ticker Price per Mrkt. Cap. P/E P/S
    May19-2011 symbol Share, $ $ Mn 2011 2012 2011 2012
    VisionChina Media Inc. (ADR) VISN 4.14 423.46M n/a 19.71 2.20 1.78
    Focus Media Holding Ltd. (ADR) FMCN 32.92 4.47B 22.39 19.03 6.85 5.78
    China Mass Media Corp. (ADR) CMM 1.70 43.89M n/a n/a 1.19 1.11
    Lamar Advertising Company LAMR 29.98 2.78B n/a n/a 2.42 3.30
    Advertising Median 19.39 n/a 1.70 n/a
    China MediaExpress Holdings Inc. CCME 2.16 n/a n/a n/a n/a n/a

    Source: Thomson Financial

     

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