China MediaExpress Holdings, Inc. (fka CCME)

[martych]

Good summary but since we need to discuss something rather than snipe at each other let's look at A in a little more detail:

CCME FMCN
current price $12.42 $28.90
Mkt cap $458m $3,863m
Ent value $288m $3,271m (no debt so mkt cap less cash)
EV per sh $7.81 $24.47
EV/Earnings mult fwd 2.8x 18.5x
sec grwth (analyst) 22.5% 20.0%
EV PEG ratio 0.124 0.925

FMCN/CCME valuation multiple 7.43x

Fwd estimate above: FMCN estimated based upon guidance
CCME uses consensus of $2.93 per sh for C11
My model fcst c11 $3.53
Earnings fcst multiple 20%
Adj'd valuation multiple (7.43*120%) 8.96x
rounding 9x

Note above does not factor in:
1) dividend for CCME (FMCN none)
2) FMCN has substantial intangibles being amortized. EBITDA valuation metrics would close the gap a little.

Conclusion: FMCN is reasonably valued with GAAP earnings multiple at just under their growth rate. CCME should see their fwd multiple growth by a factor of 8-9x to "catch up" with FMCN. That would put their EV per share at around $62.50 or about $68 per share with cash added back. And again that ignores cash dividend and much upside not in my fcst (ie SWITOW). It also ignores market dynamics where the pendulum usually swings too far in each direction. Today it's irrationally undervalued.......

Shorts no need to respond because tiesto already provided the two options and this is only looking at option A and is really just playing with numbers.