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Which links are giving you a problem? I'll try them out. I'm not in China, but it would also be great if someone could test a purchase, as I agree this will be the first thing the shorts try out.
I would guess the stores/kiosks would be small in number and located at airports and tourist spots. They probably would serve as much to reinforce the switow brand than to generate a lot of sales.
Let's see, what do we have on the agenda for the next few months...
- new guidance,
- likely Morgan Stanley coverage,
- accretive and tested growth initiatives to be announced,
- best seasonal quarter of the year underway - during which they added 2k buses,
- upcoming article in thestreet.com stating that CCME is verified/legitimate,
- Deloitte audited 10k in the works,
- dividend payment getting closer and closer...
And now 4.8 million short lemmings rushing toward a cliff... ;)
Very welcome article from Rick Pearson - this is exactly why thestreet's big RTO series is great for CCME. Not only will it accelerate the purging of the sector, but CCME will be increasingly cited as one of the cleanest, most robust U.S.-listed Chinese small caps. Best case scenario - Congress holds hearings and CCME is held up as an example of a legitimate, profitable company that respects its shareholders.
With the tour buses, plus the shopping network, plus organic growth in inter-city and airport shuttles - is it too much to hope for that they blow us away with 2011 guidance? Up to now their guidance has always carried the caveat that it excludes additional buses, etc., which is fine re deals that have not been finalized, etc. But with these new initiatives, they must have developed revenue and margin forecasts prior to implementation. Seriously hoping that they share those forecasts, either in guidance or at least in a separate public statement.
Ha, agree that CCME's valuation is one of the Great Mysteries Of Man -- still looking for that to change!
Whoa, 115k tour buses? I had no idea, that makes their pending move into that market quite a bit more interesting. I would guess that the tour bus demographic would support higher rates than inter-city buses as well - I wonder if it could turn out to be a bigger earnings driver than the airport shuttles...?
Anyone else feel that we are closer than ever to putting the fraud-meme behind us? I say that because the SEC investigation, the crowning of the shorts by the press, and the mega-coverage by thestreet.com may signal a peak in the shorts' influence. At least it takes away the 'rumor' and puts everything squarely into the light of day, which is exactly where we want any accusations against CCME.
There is a famous 1999 Time magazine cover, naming Jeff Bezos Person-of-the-Year, that immediately preceded the dot com crash. With Waldo Mushman essentially being crowned with a similar profile in thestreet.com, perhaps the great China short attack is near its peak.
Even in the thestreet.com articles, you see them quoting China smallcap bulls and declaring that not all companies in the space are frauds. And with the SEC focused on the space, shorts' statements and actions are much more scrutinized. I simply can't imagine that Muddy Waters or Citron will dare to publish any more unfounded attacks, not with the mainstream press watching and the SEC/Congress actively investigating China stocks. It could very well be the end of unfounded hit-and-cover attacks.
I think it's a maybe a couple months until investors start looking for the bargains in the space. In the meantime the stories will inevitably start to mention the good companies, and/or the qualities to look for when investing in the space - especially auditor quality. And coincidentally, CCME has a seriously good 2-3 months ahead of it, with growth initiatives, updated guidance, dividend details, culminating in earnings. And Rick Pearson is stating that he is going to China soon to cover the 'good' China stocks, I'll bet CCME is first on his list.
With some luck the timing of all of this may work out well... we'll see what happens short term, but I want to be holding my shares for the next few months, with the fear of an unfounded hit article gone it's just a matter of what else the shorts plan to do to escape before CCME is unconditionally vetted and declared one of the good ones.
Probably shouldn't feel this optimistic after this grueling year, but somehow believe that with all this publicity the market will finally recognize the significant gains to be had with CCME.
Grant Thorton? I was referring to Deloitte, CCME's auditor - actually they are #1 according to this wiki:
http://en.wikipedia.org/wiki/Big_Four_(audit_firms)
I guess it's unavoidable to go through these exercises, but it is interesting that a company - with >$200 million in the bank, tremendous cash flow, audited by the #2 auditor in the world, thoroughly and publicly vetted by many parties, and with a business operations that are easily observed - would be reported in TheStreet.com as somehow questionable because some local, undisclosed hard copy credit report - apparently only seen by two people, and based on who-knows-what information - gives them a bad rating.
Thought exercise: If someone was touting a China stock, based on a piece of paper that only they had seen, while a major auditor declared them a fraud, how would that be viewed by TheStreet.com?
I'm not criticizing anyone here, I recognize the benefit and perhaps the necessity of going to ridiculous lengths to 'prove the negative', that this company is not a fraud. Just pointing out that the double standard has gone off the charts.
Wow, they are really ramping up hiring - really can't wait to hear the outcome of all their research and testing of the shopping business. Note that they now cite 1.3 billion viewers of their ads - that's an insane number of potential shoppers, all of whom are 'captive' for a few hours as CCME entertains them and lets them browse their catalogs. Great potential here.
It's just incredible to me that people like Rick are still stuck on the question of legitimacy. The answer to his question is really simple - the other outdoor ad companies are operating in the cities, CCME is operating out in the boondocks, there is no competition from them in city buses, elevator lobbies, aitlines, etc. Why would VISN identify CCME as a competitor, for instance... CCME isn't competing whatsoever for city bus business.
I took a shot a transcribing some of Jacky's comments a couple weeks ago, here's the relevant comment (best effort to transcribe here, may not be perfect by any means):
Ping Luo: "You talk about the new projects, of course in your press release you talk about several additional opportunities to increase market share, can you elaborate a little bit on that - what kind of new project, new opportunities you are looking at?"
Jacky Lam: "I think those kind of new projects include the further expanding of our inter-city and airport express buses, and the other would be, for example, we are looking for any opportunities in order to develop the tour bus inside China. We actually right now are testing those kind of technology and also the market in some of the resorts but it's not on a large scale. If it is proved that it is a success, we will also launch that kind of project. Other project is actually also very related to our core business, that means out-of-home advertising. And right now, it may not be too appropriate to disclose a lot of things, but we will actually have a very very concrete plan in the coming few months, for launching something in the market, and we will make another press release to summarize those kind of projects, um, I think in the coming few months and also the planning for the next one or two years for this kind of new projects."
I thought the article was fairly well balanced though, including some positive quotes near the end. All in all the SEC's involvement is a good thing IMO, ultimately the only way to move past short 'hit pieces' and give the good companies a shot at a decent valuation.
------------------
We've had less fraud with Chinese companies than we've had with similar-sized U.S. companies," says Peter Siris. Siris runs Guerrilla Capital, a hedge fund. The fund has invested in some 150 Chinese businesses that have come public on America exchanges, many through reverse mergers.
Siris argues that a lot of the accusations percolating through the sector have been trumped up by short investors to increase the value of their own positions. He concedes that inexperienced Chinese executives have made what he calls innocent mistakes as they learn how to become good corporate citizens in the U.S.
Crocker Coulson, whose investor-relations firm represents some 50 Chinese companies, acknowledged that there has been financial chicanery by some reverse merger companies. Coulson said that the attention given to the bad seeds is overblown and that "people have seized on that to go out and attack high-quality companies that have done nothing wrong -- on thin evidence." Coulson and many others on Wall Street have faith that the Chinese economy will continue to reward investors with rapid growth.
Significant article in TheStreet.com, here it is in its entirety (warning, it's long).
SEC Probes China Stock Fraud Network
The Securities and Exchange Commission is investigating allegations that U.S. firms and individuals have joined with partners in China to steal billions of dollars from American investors through stock fraud, according to people familiar with the probe.
Individuals with direct knowledge of the investigation say the SEC is focusing on stock promoters, investment bankers, auditors and law firms that have been active in recruiting Chinese companies to U.S. stock exchanges and raising capital for those companies by selling new shares.
Just yesterday, the SEC made an example of an auditing firm that it said had failed to protect U.S. investors from overstatement of revenues by a Chinese company called China Energy Savings Technology. The commission said it had reached a settlement with the firm -- Moore Stephens Wurth Frazer & Torbet -- and with Kelly Dean Yamagata, a partner. As part of the settlement, the firm will be temporarily barred from accepting new auditing assignments in China and will pay $129,500.
China Energy Savings, now defunct, has been the focus of a series of SEC fraud actions dating back to 2006.
Word of a new and broader SEC probe surfaced during the course of a three-month analysis by TheStreet, which included interviews with scores of investment professionals focused on China stocks, together with reviews of SEC documents, company statements and market data. Some of the same people later provided information to the SEC.
John Heine, a spokesman in the SEC's public affairs office, would neither confirm nor deny a new investigation, citing agency policy against commenting on active investigations. But the questions that SEC investigators are asking hint at their direction. Those questions suggest a suspicion that stock manipulators have devised a kind of template for stock fraud -- one that exploits fundamental weaknesses in the regulatory apparatus of the two countries -- and now use the template to cheat investors in deal after deal.
Of special concern to the commission is a class of company brought public in the U.S. through a back-door process known as a reverse merger, sources directly involved in the investigation have told TheStreet.
Recently, many reverse merger companies have been buffeted by a series of allegations of fraud. The allegations have had repercussions across the sector. Investors in the U.S. have suffered related losses in excess of $34 billion, a review by analysts at TheStreet showed. That total adds up all the market-cap losses for 150 stocks that appear to have been used to bring Chinese companies to U.S. exchanges. The list of 150 included stocks damaged by association with such allegations as well as those directly implicated. Losses were measured from a stock's peak price at any time over the past five years to its present price.
Over the past year, the SEC has received multiple calls for investigation of fraud among China-based stocks. Many investment professionals believe an investigation is due. One is Peter Humphrey, a corporate investigator and due-diligence expert based in Beijing. Humphrey estimates that as many as a third of Chinese companies listed on major U.S. exchanges -- the Nasdaq, Amex and New York Stock Exchange -- are likely reporting fictional profits. He said he bases that estimate on due diligence research done for clients and on discussions with client, in connection with acquisitions and investments in Chinese companies. If the estimate is wrong, it's likely too low, Humphrey says.
While investors who own individual stocks have the greatest exposure to the type of fraud alleged, millions of other American investors also are at risk, through investments in China-oriented ETFs and mutual funds.
To be sure, many Chinese small-cap companies have established the strength of their businesses with financial statements that withstand the tough scrutiny of investment professionals. But frequently lack of transparency and full disclosure -- along with the formidable barriers of language, distance and culture -- make it difficult for individual investors to tell the good from the bad.
Concern about a lack of protection for U.S. investors prompted Congress to ask the SEC for action earlier this year.
In a letter dated Sept. 9, the House Financial Services Committee complained about a general lack of rigor in the auditing of Chinese companies. Addressed to SEC Chair Mary Schapiro and her counterpart at the Public Company Accounting Oversight Board, the letter asked how the agencies planned to tackle the problem.
"American investors deserve high-quality and independent financial reporting so that all market participants can trust the accuracy of the audit work for U.S. publicly-traded companies," the letter said. It was signed by Reps. Chris Lee of New York and Spencer Bachus of Alabama, who will take up his new role as chairman of the Financial Services Committee in January. The rest of the letter communicated a broad concern about fraud among China-based companies.
Until now, many investors buying China-based stocks traded on U.S. exchanges have felt abandoned by regulators.
To date, Wall Street has seen only one major SEC prosecution in the sphere. That was the case of China Energy Savings Technology -- the subject of yesterday's action.
Three China-based reverse merger companies so far have disclosed current SEC investigations: China Sky One Medical(CSKI_), Fuqi International(FUQI_) and Rino International(RINO_). China Sky One Medical has conceded inaccuracies in filings in China in a press release. Fuqi has received a delisting notice from the Nasdaq, but has not yet been delisted. Rino recently admitted that some of its claims about contracts were false, and Nasdaq has delisted that stock. China Sky One and Rino declined to comment for this article. Through a spokesman, Fuqi said it is "fully cooperating with the SEC" and that it has no further comment.
Sources with knowledge of the current SEC investigation say that the commission has shown interest in at least six additional companies. The agency's interest is not focused narrowly on individual cases, informed sources have told TheStreet. Rather, enforcement officials seem to view individual cases as manifestations of a systemic problem.
Reverse mergers -- sometimes called reverse takeovers, or RTOs -- are perfectly legal in the U.S., and have been used in the past to give birth to solid public companies, including the parent company of the New York Stock Exchange itself. If there is a flaw in the process, the flaw is that it allows stock manipulators to circumvent regulatory scrutiny.
The process is complex. First, the sponsors find a Chinese company with a plausible growth story and sell the founders on the idea of raising capital in the U.S. They then gain control of a U.S. company that is little more than a shell, but a living shell, with stock that remains listed on a public exchange in the U.S. The U.S. company buys the Chinese company, essentially taking the Chinese company public in the U.S. with little regulatory oversight. The sponsors and company founders can then use optimistic growth projections to float new issues of stock among American investors eager to participate in the economic miracle of China.
requently the prime movers in the process are Chinese, and never leave China. They enlist the help of bankers, auditors and stock promoters in the U.S. with promises of huge profits in the event of success. Often, the promoters -- some Chinese and some American -- are bailing out just as the public gets in.
The SEC is focusing its investigative efforts on the American end of the network. The agency lacks the power to compel compliance with subpoenas in China -- a fact that has not escaped the notice of dealmakers in China.
A distance of 8,000 miles, together with formidable language and cultural barriers, makes it tough for any investor to get to the bottom of a business scenario in China. Even sophisticated investment professionals spending millions on due diligence have been duped. For the moment, the frequent lack of transparency between the two countries is seen as camouflage for stock cheats. But recurring allegations of fraud and new stock blow-ups have raised questions about the reliability of accounting practices at China-based companies generally.
Some well-known blow-ups suggest the character of the broader problem:
China Energy Savings Technology: This company -- the focus of yesterday's SEC action -- billed itself as a manufacturer of "energy savings products." It agreed to sell $50 million in stock through a PIPE (private investment in a public equity) in January 2006 and soon registered to sell 10 million additional shares in a public offering. A month later, the company disclosed that the SEC had opened an "informal" inquiry into its operations. Within weeks, many of the top people in the company resigned -- directors, executives, all the key participants -- and the company went dark in China, SEC records show. In April, 2009, the SEC obtained judgments finding four of the principals liable for fraud, on the basis that they had used a phony shareholder base and phony stock transactions to boost the price of stock that was essentially worthless, pocketing more than $25 million from American investors. The judgments ordered them to disgorge their profits and to pay penalties. The company is defunct.
Bodisen Biotech(BBCZ_): This maker of organic fertilizers saw its shares delisted from the American Stock Exchange in March 2007, partly based on alleged inaccuracies in its filings regarding the role of stock promoter Benjamin Wey, president of New York Global Group. Shareholders filed lawsuits accusing Bodisen of securities fraud, but their complaints were dismissed. Wey has claimed that irresponsible short-sellers sent the company into a tailspin. The stock peaked at about $20 in 2006. Its OTC shares traded recently at about 50 cents. Bodisen did not respond to requests for comment.
Shanghai Medical Technology: This operator of dialysis clinics raised $12.5 million in a 2007 PIPE deal. The money never made it to the clinics -- it was transferred instead to the personal account of one of the company's directors, according to a source involved in the deal. The company appears to be defunct. Multiple attempts to reach company officials were unsuccessful.
Fuwei Films(FFHL_): This manufacturer of industrial plastic films went public in 2006 through an IPO on Nasdaq. In 2009, the company disclosed that three executives had been convicted in China on charges that they had illegally taken control of the business there. Shareholders alleged in a lawsuit that Chinese authorities were investigating the hijacking of the company while stock promoters in the U.S. hyped the new issue. The suit charged that company officials had provided false and misleading informaton relating to the company's IPO. One of the executives arrested in China has been sentenced to death there, and the two others to life imprisonment, the company has said. In September, Fuwei and its co-defendants -- senior officials and directors of the company -- settled the shareholder suit, agreeing to pay $2.15 million. Fuwei still maintains that the allegations in the suit are "without merit." The stock, as high as $15 in 2006, now trades around $2.
China Yingxia(CYXI_): This health-food company was founded by a nurse-turned-entrepreneur. It reached a market cap of more than $900 million and then in 2009 stopped filing statements to the SEC. Information remains scarce, but according to one person familiar with the company, the nurse is now in jail in China for selling unregistered securities to individuals there, a violation of the country's securities laws. Attempts to reach the company were unsuccessful.
Asia Time(TYM_): This watchmaker started trading on the American Stock Exchange at $8.50 a share in February 2008. Without warning, the company stopped filing SEC statements a year later, prompting the Amex to delist its stock. It occasionally trades on the Pink Sheets and last traded Nov. 26 for a penny. Attempts to reach the company were unsuccessful.
China Water & Drinks: This bottled-water company merged into a U.S.-listed shell in 2005. Two years later, it was acquired by a special-purpose acquisition company run by Richard Heckmann, a veteran U.S. investor based in Southern California. Four months after the deal closed, Heckmann charged -- a charge repeated in court papers -- that the Chinese CEO had embezzled millions of dollars and that the company's customer list was mostly fiction. The CEO has denied those charges and countered with a lawsuit claiming Heckmann owes him millions.
In some quarters, China-based stocks are now discussed with near scorn. Famed hedge-fund manager Jim Chanos, who uncovered the accounting fraud at Enron nearly a decade ago, says that accounting irregularities are more the norm than the exception at the Chinese companies researched by his firm, Kynikos Associates.
Chanos has been a vocal critic of China stocks. During an investment conference in New York in October, Chanos argued that investment bankers with strong links to China tend to view U.S. investors as a short-term source of capital, not as long-term partners. Chanos has described Chinese stocks as a "short seller's dream."
The SEC's interest follows a host of damaging accusations by short-sale investors -- those who sell borrowed shares and later profit from a decline in a stock's price. The shorts routinely publish damaging research on the Internet, sometimes causing steep declines in the prices of stocks and occasionally provoking charges of stock manipulation from investors with long positions in those same stocks.
As one Chinese small-cap after another has imploded, the resulting profits have allowed short investors to redouble their efforts. They have been developing databases, scheduling regular trips to China, and hiring experts in forensic accounting.
Their work has been aided by the adroit use of computer technology. Where cultural, language, and legal barriers have prevented U.S. regulatory authorities from knitting together a complete picture of a company's activities, the shorts have succeeded, on occasion, using Internet portals and emails to obtain photocopies of documents filed with Chinese authorities, then comparing those documents with documents filed in the U.S.
Short investors often get embroiled in heated public debates with long investors who are betting on the success of the Chinese companies whose shares they own. Defenders of Chinese investment opportunities caution that fraud and stock blow-ups are common in any volatile sector, often coinciding with exciting growth stories.
"We've had less fraud with Chinese companies than we've had with similar-sized U.S. companies," says Peter Siris. Siris runs Guerrilla Capital, a hedge fund. The fund has invested in some 150 Chinese businesses that have come public on America exchanges, many through reverse mergers.
Siris argues that a lot of the accusations percolating through the sector have been trumped up by short investors to increase the value of their own positions. He concedes that inexperienced Chinese executives have made what he calls innocent mistakes as they learn how to become good corporate citizens in the U.S.
Crocker Coulson, whose investor-relations firm represents some 50 Chinese companies, acknowledged that there has been financial chicanery by some reverse merger companies. Coulson said that the attention given to the bad seeds is overblown and that "people have seized on that to go out and attack high-quality companies that have done nothing wrong -- on thin evidence." Coulson and many others on Wall Street have faith that the Chinese economy will continue to reward investors with rapid growth.
Lawyers experienced in the litigation of securities fraud cases believe that the current investigation by the SEC could well come to nothing in the end, leading into the same quagmire that has frustrated a lot of American investors. Ultimately, the truth about the operations of Chinese companies lies in China, where U.S. regulators lack authority.
http://www.thestreet.com/story/10952277/1/sec-probes-china-stock-fraud-network.html
They really do respond to shareholder requests - NASDAQ uplisting, buyback, dividend, and now new website - all were asked for by shareholders.
On the last CC Jacki said they were running a tour bus pilot with a few resorts, and that they wouldn't implement it if it didn't prove itself as a good business - very smart, IMO.
Has anyone determined if the 5-10% is paid semi-annually for TTM, or is it effectively 2.5-5% for trailing 6 months, or...? TIA.
IBD mentioned CCME again in yesterday's early market roundup:
http://www.investors.com/NewsAndAnalysis/Article/556967/201012161022/US-Stocks-Tread-Water-After-Jobs-Housing-Data.htm
Ah, missed that - would appear to make the 'insider trading' question moot?
Re the Lin shares, he sold 100k at $15 - are those the shares Jacki bought? And if so, would that have any effect on the 'insider' issue (if it was an insider-to-insider sale)?
I agree, someone must have a shorting algo running, nonstop 100 share trades at the bid. Been seeing this for a long, long time... so what were the conditions that turned it around in the $7's? Was it that they ran out of shares? Or was it just that a big buyer came along and overwhelmed the short attack...?
Needless to say the value proposition here just keeps getting better, but this is a surprisingly strong short offensive, didn't expect this today.
I'm dumbfounded by the shorts today - what could they be thinking? Is this just Butch Cassidy swagger, going out shooting? They must be almost out of ammo.
Nice move to announce the dividend prior to announcing investments in growth initiatives - taking care of the shareholders first will make it all the more enjoyable to see what they plan to do going forward.
What does it mean when you see constant 100 share sells on a day like today? Is this computer generated shorting...?
Makes so much sense, someone light the fuse and everything is in place to march straight to $25+. Got to be some people out there that see the opportunity here.
Interesting - Jacki mentioned in the Q3 CC that they would be making more effort to publicize the CCME brand in China, I guess this is part of that campaign. All for the good, the more well known CCME gets over there, hopefully the more legitimate it will appear to investors.
Feature article in China Daily on the ad market, good read - all sectors seem to be booming, including traditional media.
http://www.chinadaily.com.cn/bizchina/2010-12/14/content_11697563.htm
Another IBD mention ('new buying opportunity' - very nice!):
http://www.investors.com/NewsAndAnalysis/Article/556576/201012131137/US-Stocks-Expand-Gains-In-Brisk-Trade.htm
China MediaExpress (CCME) surged 8% in more than three times its usual volume. The Chinese advertising and information services provider ran up to an all-time high on Nov. 8, then pulled back sharply, briefly piercing its 50-day moving average last week. The stock rebounded above that line Monday, offering a new buying opportunity. China MediaExpress has racked up triple-digit sales gains for three straight quarters. It also has a 99 Earnings Per Share Rating and an A SMR Rating.
Interesting question - Is there a connection between generosity of spirit and the number of long term contracts, returning customers, free TV content providers, good government relationships, etc.? Seems to be working out.
I doubt they will issue 2 million shares per year... though I haven't read it closely yet, might be wrong. Still these will be long term holders, and the benefit to us is that the company will have a much deeper interest in letting the stock reflect the value of the employees' efforts.
Get a good feeling knowing that Jacky, Starr, a director, and 250 employees are significantly increasing their stake in the stock, over a 3-4 month period running up to major announcements and followed soon thereafter by the next audited 10k. This is all unfolding nicely - albeit on their timetable.
It's very beneficial to us longs that they will have a much higher personal interest in the stock price going forward, I doubt they intend to let shorts control the stock once their employees are all stockholders.
SSE going nuts tonight, up over 2% with half hour to go. Surely rate increases will come eventually, but for now there's lots of relief.
Heh, the curse of CCME: a simple fact is filed with the SEC - the CFO bought $1.5 million in stock - and it is analyzed, doubted, conspiracy theories are formed, rebutted, where did he get the money, etc. ad nauseum. Crazy stuff.
Never understood the reactive questioning of this company, seems to me a pretty simple business plan, all of the right verifications in place, great auditor, straight-shooting and shareholder-friendly management -- yet longs and shorts both go to great lengths to find - even invent - problems.
Yet slowly the curse is being lifted, the stars are aligning for another run IMO - impending news, dividend, another audited 10k, and of course nice little surprises like this substantial insider buy.
That was asked and answered in the conference call, they applied currency appreciation to that particular accounting bucket, the actual expenses were much higher but were offset by the yuan/dollar credit.
Great info, thanks swampdonkey. I think the announcements on growth strategy are important for the stock, as a lot of investors wonder if 'ads on buses' is broad enough to sustain this growth. Plus it helps on the credibility side of things to see the company making investments, it's another way to validate the company's actions if they announce partnerships with tourist resorts, etc.
Seems like a long ways away now, when the stock and sector are out of favor, but if by February the company has described a compelling growth plan, is deploying cash in verifiable ways, issues positive 2011 guidance (conservative is good), and is paying a dividend - should be quite a run into earnings, esp. with short interest so high.
FWIW, Schwab is my broker and they do not borrow shares from a cash account without entering into a very detailed agreement with you, including paying interest, covering dividends, and paying the difference in capital gains vs. dividend rate for any dividend payments you receive.
dyam - could be, I've listened to it yet again and still can't quite catch what he is saying, except that Deloitte has been in their offices weekly working on various projects. It's at the ~30 minute mark if you want to give it a shot:
http://www.investorcalendar.com/IC/CEPage.asp?ID=162179
I'm not familiar with SARS vs. stock options, but there must be a strike price or the equivalent. If they are about to implement the program, they likely would not take direct action to run the stock price up prior to the first round of strike prices being set. This would be counterproductive and an unfortunate timing misstep, the options are intended as a reward after all. So I expect they will have the SARS program in place by the time they announce a dividend.
I take it as a huge positive that they are vesting their employees in the stock, I think they will then have a very high interest in keeping the stock from collapsing.
High speed trains - that would be huge. It did seem that Jacki was talking about another project in addition to the tour buses... not 100% sure though, hard to interpret him sometimes.
Re accusations against the company - did not know that Deloitte is working alongside them every week on projects, one of which is (I believe) 'SARS', or 'Stock Appreciation Rights' (a form of employee stock benefit).
Questioner: "My question is, there has been a lot of conversation about potential fraud regarding your company, so, uh, to put that to rest, my question is twofold - assuming the current auditor is still Deloitte Touche, what is their involvement, if any, on a quarter-to-quarter basis? So specifically for these numbers, what has been the involvement of the auditor, if any?"
Jacki Lam: "Okay, yeah yeah yeah, I think I also see some of the comment or distraction there. If you look at all of the public filings that we've filed, actually Deloitte, actually they are with us since last year. They audited the 10K of 2009. They are actually with us for Q1, Q2, and Q3. And also if you note that this year we are implementing SARS and [...] in our company, actually their involvement is very, very heavy. Every week they have people sitting in our office to work on the SARS project, on different projects like the [....], Q3, and also something like that, and right now they are planning for doing the annual audit as well. So, can I answer your questions?"
Questioner: "Yes, I think that's fair. So in the year 2010, Deloitte's been involved on a regular basis, and these numbers are shown to Deloitte before you present them - I understand they don't audit them, but these numbers are run by your auditor Deloitte before you present it to us?"
Jacki Lam: "That's true, all quarters are reviewed by our auditors before it is announced."
Listened to the conference call some more, here's an excerpt on forward planning - sounds like concrete plans are in process and they will share those relatively soon.
Ping Luo: "You talk about the new projects, of course in your press release you talk about several additional opportunities to increase market share, can you elaborate a little bit on that - what kind of new project, new opportunities you are looking at?"
Jacki Lam: "I think those kind of new projects include the further expanding of our inter-city and airport express buses, and the other would be, for example, we are looking for any opportunities in order to develop the tour bus inside China. We actually right now are testing those kind of technology and also the market in some of the resorts but it's not on a large scale. If it is proved that it is a success, we will also launch that kind of project. Other project is actually also very related to our core business, that means out-of-home advertising. And right now, it may not be too appropriate to disclose a lot of things, but we will actually have a very very concrete plan in the coming few months, for launching something in the market, and we will make another press release to summarize those kind of projects, um, I think in the coming few months and also the planning for the next one or two years for this kind of new projects."
(these are best efforts to transcribe, of course do not rely on this for investment decisions)