Replies to post #7296 on China MediaExpress Holdings, Inc. (fka CCME)

[Headley Lamar]

Another way to think about - do you think that the distant, unfounded threat of a hitpiece disseminated by some third rate blogger could possibly cause a material negative effect on the PPS of a reputable company such as Apple, Microsoft, Bidu, etc? However if someone utters the word "Hit Piece" on a blog regarding CCME we lose 10% in a week. Credibility is our sole enemy here. We have too little.

I think that can certainly change over time but management needs to lend a helping hand. Once we have it, sky is the limit.

[value1008]

Headley, the other stocks in this "China new media ad" space are trading up at 18-25 P/E multiples. I've said it over and over, the only reason that CCME is still trading down around trailing and forward P/Es of 6 and 5 is b/c they're "the new kid on the block," and so are being discounted by the mkt until they further "prove themselves." One would think that strong recent qrtrly earnings along with several years of fantastic growth and the fact that two independent analysts and Starr Int'l have come out strongly in favor of CCME would have done the trick to raise the P/E.

My own opinion is that the next 10-K report will create a sense of CCME's having "matured" as a peer to FMCN, et al.

In the meantime, before and beyond that next 10-K, there are lots of positive catalysts coming along, as we all know:

--more airport shuttle bus contracts to be announced;
--other revenue streams likely to be announced;
--guidance for 2011 (and Jacky has been told by shareholders to come up with more realistic figures reflecting the strong growth, not some excessively low "hyper-conservative" figures);
--more analysts getting on board with buy recommendations;
--more mainstream financial media coverage and IBD listing when pos. momentum returns;
--likely short squeeze;
--and yes, the dividend almost surely to come (likely to be announced early in the year)

[gunnar]

Believe me, I share your frustration. I just think the buyback was handled correctly given the 'natural' appreciation that occurred.

The way I look at it, there are two tiers of U.S.-listed Chinese stocks -- those that are taken seriously (BIDU, FMCN, etc.) and get valuations of 20-40x (and beyond). And then the rest of the pack, which are viewed as garbage. My investment thesis here is that CCME will make the transition at some point to the higher tier. Wish it happened yesterday, but I think that if the management continues to act conservatively, while making huge profits audited by Deloitte, this will happen in time.

From this perspective, buying back shares looks a little desperate to me, I don't think it makes management look confident if they are directly manipulating the share price. And it didn't turn out to be necessary anyway. However, a dividend is another story. If they come out with a business plan that spends money on smart, accretive expansion, PLUS gives shareholders a nice dividend, they will come out looking great and may inch up a bit toward that higher tier of Chinese stocks.

That's how I hope it plays out, anyway, I'll be patient and see what they say - so far I like what they have done.

[lmcat]

If CCME were to set up a quarterly dividend they would attract institutional funds that only buy dividend paying companies.

lmcat