Replies to post #48695 on China Growth Stocks

[RyanW439]

Whatever you say Muddy Waters..eom

[justin s]

CCME - Gene_Finder

I am from the advertising arena, so I will look at this but at first glance, there are two things that jump right out at me.

CPM is not a function of people. CPM is a function of the number of times an ad is served. Cost per thousand ad impressions. Therefore, the same ad can be viewed multiple times in a single bus trip (user session). CPM is not a function of unique eyeballs.

3RMB CPM is equivalent to a .44 USD CPM which is dirt cheap. If I were to take a calculated guess, I would say that CCME has the pricing power to go to a 2-4 USD CPM and that is still extremely low. I will look for a comp on VISN but I think it is well north of 10 RMB CPM. CCME has talked about the higher margin in this business- in this case, that is pricing power.

[Drexion2004]

CCME: You should really check into the CPM rates for competitors like VISN and local-television. CCME's usual rates are much much much lower. I'd expect the airport shuttle segment, as a premium service, to have a CPM closer (or above) that of VISN's average.

Last I looked, VISN had a CPM of 21rmb or so in many places (subways, etc).

In Beijing, just for comparison, regular local tv advertisement has a CPM of 133rmb.

-Fernando

[derek2000]

CCME - Interesting math.

1) I would suggest you to send your calculation to Jacky for comment and comparison.

2) Required CPM rate:

I took another approach: What avg CPM rate is required to generate the reported revenue?

I basically took most of your assumptions regarding Beijing Airport, and use a simple 4x for a total of four airports.

I came up an avg CPM rate of 29 RMB to generate USD $13.6m.

This is not too far from VISN's 21 RMB and lower than local TV's 133 RMB (per Fernando).

[tenenbaum]

I think your mistakes are:

1) CPM rate too low (see VISN)

2) Ad time/content time ratio probably isn't the same for airport express bus routes versus long haul inter city routes. Would be a good question for Jacky.

[putsbootycall]

Lots of variables, I'm sure you are missing something...too easy to make a mistake on so many assumptions. Plus, I do know this...you are not factoring the embedded advertising which became a huge revenue and profit generator for CCME in Q4 of last year.

[tothe]

CCME AD pricing, gotothesea's post for comparison on this thread by Gene finder.
http://investorshub.advfn.com/boards/read_msg.aspx?message_id=62115057

gotothesea Share Friday, April 15, 2011 11:05:21 AM
Re: gotothesea post# 29474 Post # of 31700

CCME Ad pricing compared to two other bus TV AD company

Bus Online ad quote(RMB per Week)
http://www.ivtv.com.cn/?action-category-catid-40.

ShiTong HuaNa ad quote (RMB per Week)
http://www.towona.com/index.php?pages=print_case
ShiTong HuaNa customer
http://www.towona.com/index.php?pages=my_cient


Both Bus Online and ShiTong HuaNa operate inner-city bus TV ad. The quote is RMB/week. CCME run intra-city and airport bus ad. The following Ad quote is RMB/month. CCME run on Beijing airport (world second largest airport by passengers with 74 Million passenger in 2010). And GuangZhou airport (China's second largest airport with 41 million passengers in 2010).
http://en.wikipedia.org/wiki/World%27s_busiest_airports_by_passenger_traffic

Based on AD pricing compared to two other bus TV operator. CCME do price lower than its competitors. So CCME should be competitive to attract customers and agents. Based on following rate, and exclude embedded ad sale, CCME earn US$100 million revenue for 3.1 minutes ad sold per hour.

Province, # of buses, # of Route,15 second Regular Ad (RMB/month)
Beijing, 1497, 183, 236000
Tianjin, 1509, 152, 199000
HeBei, 607, 107, 73000
Shanxi, 958, 137, 84000
NeiMonggu, 816, 92, 78000
Shanghai, 2127, 227, 409000
Jiangsu, 2797, 583, 362000
Zhejiang, 449, 95, 63000
Anhui, 1019, 193, 95000
Shangdong, 1673, 211, 210000
Fujian, 2283, 453, 257000
Jiangxi, 640, 72, 73000
Guangdong, 2189, 536, 341000
Hunan, 1432, 172, 183000
Hubei, 1562, 181, 131000
Henan, 2244, 233, 236000
SiChuan, 1502, 180, 152000
Chongqing, 1230, 153, 115000

AIRPORT, # of buses,# of Route,15 second Regular Ad (RMB/month)
Beijing, 229, 8, 409000
Guangzhou, 131, 14, 246000
Qingdao, 32, 3, 68000
Changsha, 45, 6, 68000
Chengdu, 101, 4, 136000
Chengdu between terminal shuttle, 11, -, 13000
chongqing, 26, 1, 42000
Shijiazhuang, 50, 6, 68000
Fuzhou, 44, 1, 68000

Total Bus: 27203