Replies to post #10530 on China MediaExpress Holdings, Inc. (fka CCME)

[bullmarkets]

Pedro:

Re: your comment, "They also may feel a reluctance to spend their cash on something they view as "not immediately essential...."

Nothing demonstrates this decision-making standard of management more than the www.ccme.tv website, translation, videos (including the 8 minute Switow video), transcript(s), and the overall presentation to the English-speaking North American shareholders where CCME trades. I wish there could be, for lack of a better description, an English-speaking North American on the Board of Directors, if not as an upper level manager of the company. For a company that sells premium access to its media space should recognize the importance of its own media presentation to its prospective shareholders. Confidence would improve some with this addition beyond Starr's hand-picked Dorothy (who is, herself, reputable and trustworthy by all accounts).

I'll finish with my usual summation on this issue: The more CCME appears to be the company next door to the mode demographic of its shareholders, which is also the majority of its prospective shareholders (English-speaking Americans and Canadians who are not fluent in Mandarin), the more prospective shareholders will feel comfortable with the total picture and bid shares higher. The company can make 4 bucks a share +/- .03 cents and share prices can reach two different multiples. The factor yielding divergence between these two share prices is the perceived quality and polish of CCME presentation to shareholders.

-Andrew

[martych]

Hi Pedro,

If that were true, I could perhaps understand a delay more. The reality is that the forward estimates are so low that it would be a simple matter to absorb this without blinking an eye. To put it plainly, I've now modeled out what C11 looks like and I'm coming up with $3.73 EPS for the CY. My model assumes:
- Ramp to 32.2k inter-city buses by y/e
- Ramp to 800 airport buses by y/e
- 1,000 tour buses added in 2H
- a $10m wireless roll out that is phased in throughout year.
- An increase in operating expenses to $22.5m for yr. That provides investment dollars for SWITOW and ramped direct ad selling employees.

I'm also assuming all 54m shs are used for Q4-11 eps calculation. The high street estimate is $3.04. Now maybe my assumptions have some flaws that will show up after another quarter's data, but it certainly won't drop anywhere close to the street so they have plenty of room to include this with missing estimates.

Building investment dollars into this substantial opportunity to facilitate additional growth in C12 is a no brainer. What would be interesting is to see them implement a wireless rollout in operator stations that have a 4-5 yr remaining term and use that as an incentive when negotiating new or renewal contracts that are expiring in C12.