I've been thinking about this one a little more...
The CEO has mentioned they are working on a website that will enable passengers to make ticket reservations online. Believe it or not, there is currently no such service in existence in China, and if CCME is able to put this together and then advertise their site on their network, this could be HUGE. Ctrip.com, which offers a similar service for plane tickets, trades at a PE of 50.
Furthermore, this company basically has a green light from the government to monopolize their niche, which appears to be the most profitable in the outdoor advertising industry. I think that it is more appropriate to focus on the 80% of all HDD equipped buses number rather than the 55% of all buses with screens number. I've been on these buses with screens but no HDD... there is no advertising, they just play karaoke VCDs, lol.
So going forward, CCME can leverage its relationships with the government and bus operators to develop a highly effective nationwide advertising network that passengers have a hard time ignoring AND an exclusive online reservation service that gets free ad space on the network. As China's consumption really gets going, who knows how high they will be able to jack up rates. This is definitely a long-term hold. Eventually it may be more fair to compare valuations with CTRP rather than VISN and FMCN.
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