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Wednesday, February 24, 2010
Why CCME is severely undervalued: After market correction , FMCN is trading at a forward 18 P/E. ($14/.79 2010 EPS estimate). CCME should do approximately $42m Net Income in 2009. And they are targeting $83m Net Income in 2010. I do think they will hit their targets. However, let's say in 2010 they only grow net income by 50% from 42m to 63m. There will be approx. 39m shares o/s for full year 2010. So if they only grow net income 50% EPS would be $1.62. FMCN P/E is 18. $1.62 X 18 P/E is $29.16. They are targeting $2.13 EPS in 2010 X 18 P/E = $38.34. This stock is still severely undervalued with the market correction because it NEVER came close to a decent valuation pre-correction due to the warrant overhang which is now over. TSTC, TRIT, RINO and others have had stock runs on similar or less EPS once they were discovered.
China MediaExpress Holdings, Inc. Signs a Contract with the Organizing Committee of the 16th Asian Games
Press Release Source: China MediaExpress Holdings, Inc. On Tuesday February 23, 2010, 5:22 pm EST
FUJIAN, China--(BUSINESS WIRE)--China MediaExpress Holdings, Inc. (NYSE Amex: CCME) (“CME” or “Company”) today announced that it has signed a contract with the Organizing Committee of the 16th Asian Games which run from November 12 to November 27, 2010 in Guangzhou. The agreement provides for CME to display a 30 second advertisement promoting the games on its current network of buses from February 1, 2010 until November 30, 2010.
Guangzhou is China’s third largest city, after Beijing and Shanghai, and is the second host city in China after Beijing in 1990. A total of 42 sports are scheduled to be contested in 53 different venues, making it the largest Asian Games ever. Tens of millions of travelers are expected to travel to Guangzhou and other surrounding cities to view the games.
Zheng Cheng, CME’s Founder and CEO, noted, “We are pleased to have been selected by the Guangzhou Asian Games Organizing Committee as one of its media advertisers. Our association with the Asian Games should enhance our reputation among our clients, both leading advertising agencies and corporations, as well solidify our position as a major media player in this market. We are working on signing on additional bus operators and advertising clients to take advantage of the exceptionally large number of travelers in the Guangzhou area during the Asian Games.”
CME, through contractual arrangements with Fujian Fenzhong, an entity majority owned by CME’S former majority shareholder, operates the largest television advertising network on inter-city express buses in China. While CME has no direct equity ownership in Fujian Fenzhong, through the contractual agreements CME receives the economic benefits of Fujian Fenzhong’s operations. Fujian Fenzhong generates revenue by selling advertisements on its network of television displays installed on over 20,000 express buses originating in fourteen of China’s most prosperous regions, including the five municipalities of Beijing, Shanghai, Guangzhou, Tianjin and Chongqing and nine economically prosperous provinces, namely Guangdong, Jiangsu, Fujian, Sichuan, Hebei, Anhui, Hubei, Shandong and Shanxi which generate more than half of China’s GDP.
Monday, February 8, 2010
Their investment in Bus Online for 30% or $100m in a company that did $46 mill in revenues values them at over $300m. They are doing 1/2 of CCME revenues and now are valued at a similar market cap to CCME. We saw the same high multiple paid by VISN to buy DMG for $160m and DMG had approximately $20m in revenues. Multiples are high in the Chinese advertising sector further validating to me that CCME is undervalued.
CCME - China MediaExpress Holdings, Inc. provides television advertising services on inter-city express buses. It offers advertisements on its network of television displays installed on approximately 18,000 express buses originating in four municipalities of Beijing, Shanghai, Tianjin, and Chongqing and eight provinces, including Guangdong, Jiangsu, Fujian, Sichuan, Hebei, Anhui, Hubei, and Shandong in China.
Disney, Google eye stake in China bus media firm
Mon Feb 8, 2010 5:57am EST
* Disney-led consortium in talks to buy into Bus Online
* Google among investors in Disney consortium
* KFC to partner with Bus Online in 2,000 restaurants (Adds KFC deal, Disney and Google's China business)
By George Chen and Melanie Lee
HONG KONG/SHANGHAI, Feb 8 (Reuters) - A consortium led by Walt Disney Co (DIS.N) is in advanced talks to buy into China's largest in-bus digital media and advertising company, a deal that could offer the U.S. entertainment giant a new platform to promote Mickey Mouse in China, three sources told Reuters.
Google Inc (GOOG.O), the world's No.1 Internet search company, which threatened to quit China last month over censorship and hacking concerns, was among investors in the Disney-led consortium, the sources said on Monday.
The consortium planned to buy a stake of between 30 and 40 percent in Bus Online for more than $100 million via a purchase of old and new shares to be issued by the company in private placements, said the sources.
"Disney wants to be a strategic partner not just a financial investor in Bus Online as Disney is going to do many things in China -- for example, the theme park to be opened in Shanghai," said one of the sources. "To Disney, the deal is not just about sharing in the growth of China's advertising market but more about the promotion of Disney, the brand itself, and this is strategically important to Disney in China."
In November, Disney's (DIS.N) made a breakthrough deal to build one of its signature theme parks in Shanghai, marking a major advance for Western media and entertainment companies seeking to crack the tough Chinese market. [ID:nN03523281]
Senior executives of Disney are expected to fly to Beijing to meet Chinese media regulators to discuss Disney's long-term development plan in China including the Bus Online deal, said another of the sources.
GOOGLE IN FOCUS
In the wake of it's recent problems in China, Google is finalising a deal that will let the U.S. National Security Agency (NSA) help it investigate a corporate espionage attack that may have originated in China.
Beijing has already warned Washington not to make the Google incident political, in addition to other growing sources of friction between the two nations, including Tibet, Taiwan, yuan appreciation and Sino-U.S. trade.
Google was expected to take only a small stake in the Bus Online deal, while Disney aimed to take the greater part, said the sources, adding that no agreement had been signed yet.
The sources briefed on the possible deal declined to be identified as the negotiation process is confidential. Bus Online, headquartered in Shanghai, declined to comment.
A Google spokeswoman said the company could not immediately comment. Disney could not be immediately reached for comment.
Bus Online is China's No.1 in-bus digital media and advertising company, with revenue of about 314.5 million yuan ($46.07 million) in 2009.
Since 2004, the company has received a total of $80 million from venture capital funds and banks including IDG, Yangtze Fund, China Renaissance Capital Investment and CCB International.
Bus Online is the exclusive partner of state broadcaster CCTV and the official Xinhua news agency for in-bus media content and advertising.
Yum! Brands' (YUM.N) fried chicken restaurant chain KFC would sign a deal with Bus Online to allow the Chinese company to set up screens in KFC's more than 2,000 outlets across China, said the sources.
Disney expected to provide media content to Bus Online for its partnership with KFC in China on the condition that Disney and Bus Online agreed on the equity stake investment first, they said. ($1=6.826 Yuan)
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