China Tracker - Details for China MediaExpress (CCME)


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 China MediaExpress
 Business Outlook

COVERAGE TERMINATED (Going Dark)
Recent Chain of Events:
2012-08-28 -- SEC Registration REVOKED
2011-05-19 -- Last SEC Filing
2011-05-19 -- Delisting from NASDAQ
2011-03-13 -- CFO Resignation
2011-03-11 -- Trading halted by NASDAQ
2011-03-11 -- Auditor Resignation
2010-11-09 -- Last Quarterly/Annual Report: Q3/FY2010 ended September 30, 2010

(Source: Trading China, 2012-09-30)

The Nasdaq Stock Market has sent a letter to the Company indicating that it denied the request of the Company for continued listing on Nasdaq, and will suspend trading of the Company's shares effective at the open of business on Thursday, May 19, 2011. The Company intends to further appeal the hearing panel's determination.

(Source: 8-K Filing, 2011-05-19)

China MediaExpress Holdings reported today that the NASDAQ Stock Market has sent a letter to the Company to the effect that NASDAQ was exercising its discretionary authority under Listing Rule 5101 to suspend the Company's common stock from trading on NASDAQ effective opening of business on April 12, 2011, subject to the Company's right to appeal such determination to a hearing panel not later than April 8, 2011. The Company intends to appeal NASDAQ's determination before such deadline.

(Source: PR Newswire, 2011-04-04)

DTT has informed the Company in its resignation letter that it was no longer able to rely on the representations of management and that it had lost confidence in the commitment of the Board and the Audit Committee to good governance and reliable financial reporting. Prior to its resignation, DTT raised the following issues (some of which may be considered to be disagreements) encountered during the audit, including:

- issues related to the authenticity of bank statements
- a loss of confidence in bank confirmation procedures carried out under circumstances which DTT believed to be suspicious
- issues concerning the validity of certain advertising agents/customers and bus operators (including with respect to certain of the Company's top ten customers)
- concerns over possible undisclosed bank accounts and bank loans
- information on file with the State Administration of Industry and Commerce as to certain subsidiaries appearing to be inconsistent with comparable financial information provided to DTT
- the verification of the validity of a sampling of tax invoices issued in connection with certain large transactions
- the verification of certain subsidiary tax payments with the local office of the State Administration of Taxation
- the verification of salary payments made in cash directly to employee bank accounts
- the verification of the production process for advertising programs
- and the potential double counting of a certain number of buses

As a result, DTT had requested that the bank confirmation process be re-done at the banks' head office and that the issues described above be addressed by an independent forensic investigation. DTT stated in its resignation letter that, in its view, the Company was not in good faith willing to proceed with the course of action requested by DTT. However, the Company believes that it was working to address these items at the time of DTT's resignation.

DTT's letter also stated that these issues may have adverse implications for the prior periods' financial reports, including the Company's consolidated financial statements for 2009 and DTT's report thereon, and that in the absence of the further investigatory procedures that DTT requested, DTT was unable to determine whether the prior periods' financial statements are reliable, and accordingly whether continuing reliance should be placed on these financial statements or on DTT's report on the Company's 2009 financial statements. DTT discussed the subject matter of these reportable events and disagreements with the Company's Audit Committee. The audit report of DTT on the financial statements of the Company for 2009 did not contain any adverse opinion or disclaimer of opinion, and was not qualified or modified as to uncertainty, audit scope or accounting principles. DTT has advised the Company that the reportable events and disagreements described above, if not resolved to DTT's satisfaction (had it not resigned), would have caused it to make reference to the subject matter of such events and disagreements if it were to have issued an audit report on the Company's financial statements for the year ended December 31, 2010.

(Source: 8-K Filing, 2011-03-29)

As you know, numerous allegations of a serious nature relating to the conduct of certain members of CCME's management (and that of its subsidiaries) have come to light in the past several weeks. Specifically, by letter dated 3 March 2011, Deloitte Touche Tohmatsu issued a letter to CCME's Audit Committee detailing numerous irregularities it encountered during its audit of CCME, including in particular, irregularities concerning the bank account balances for CCME's PRC subsidiaries.

Subsequently, by letter dated 11 March 2011 to the Audit Committee and the Board of Directors of CCME, Deloitte resigned as auditor of CCME, citing "no tangible process" had been made with respect to the issues raised in its 3 March 2011 letter, and stating that it had "lost confidence in the representations of management (which underpin any audit) ... and reliable financial reporting."

(Source: 8-K Filing, 2011-03-17)

China MediaExpress Holdings today announced that the Company's registered independent accounting firm, Deloitte Touche Tohmatsu (DTT) has formally resigned its engagement by the Company as of March 11, 2011. Following the receipt of the DTT resignation letter, on March 13, 2011, the Company received notice of the resignation of Jacky Lam from his position as Chief Financial Officer and director of the Company, effective immediately. As a result, CME will delay its fourth quarter earnings release and will not file its Form 10-K for the fiscal year ended December 31, 2010 by March 16, 2011, its original due date.

The DTT resignation letter stated that DTT was no longer able to rely on the representations of management, and recommended that certain issues encountered during the audit be addressed by an independent investigation. DTT's letter also stated that these issues may have adverse implications for the prior periods' financial reports and that, in their view, further investigatory procedures would be required to determine whether the prior periods' financial reports are reliable. Upon receipt of the formal DTT resignation letter, the Company requested the suspension of trading in the Company's common stock on the NASDAQ Global Market to permit full disclosure of DTT's resignation to be disseminated to the public.

The Board of Directors of the Company met over the weekend of March 12-13 and confirmed its intent to authorize an independent committee of the Board to launch an investigation with respect to the concerns of DTT, which committee would be authorized to engage a forensic accounting firm and independent legal advisors, and initiate a search for a new CFO a new independent auditor. The Company expects that the announcement of final results for 2010 and the filing of its Annual Report on Form 10-K could be delayed for at least a month to permit the completion of all necessary fieldwork of the new independent auditor and to complete the independent investigation of several potential issues raised in the DTT resignation letter.

(Source: PR Newswire, 2011-03-14)

China MediaExpress Holdings, China's largest television advertising operator on inter-city and airport express buses, today announced that it was ranked #1 in the 2011 Forbes China 200 small-to-mid sized companies with the most potential. The list can be accessed online at http://www.forbeschina.com/list/1008/more. "We are honored to be named the China's #1 small-to-mid sized company with the greatest potential, based upon on our historical performance. This achievement is attributable to the hard work and dedication of our entire team. We remain committed to further grow our business and maximize shareholder value."

(Source: Business Wire, 2011-01-12)

China MediaExpress Holdings today announced that CME formally launches SWITOW, a new B2C shopping platform for its contracted advertisers. The SWITOW shopping platform includes: a) the SWITOW magazine that will be distributed in CME's network, b) the SWITOW website (www.switow.com) and c) boutiques to be opened in certain major cities. Through the SWITOW platform, our advertisers will be able to promote a wide range of their products including popular consumer items such as electronic appliances, computers, mobile phones, apparel, fragrances and cosmetics, and household items. Customers may place orders by either calling the SWITOW hotline, or via the SWITOW website.

The contracted advertisers will provide the "lowest price guarantee" for all the items sold on the SWITOW platform. Moreover, some items sold through SWITOW will offer a longer warranty period than the traditional sales platform. CME has already signed contracts with many prestigious global and Chinese domestic companies or their distributors such as Apple, Sony, Toshiba, Adidas, Nike, Samsung, Phillips, Skyworth, Supor and others, to feature their most popular products on SWITOW and we expect others to join the platform. CME has hosted the SWITOW launching ceremony today in Fuzhou, where the press and representatives from China Enterprise Directors Association, HuaXia Bank and the contracted advertisers attended.

"This project further enhances the value and growth potential of CME's platform. We believe this business model can make use of the strength of our passenger flows and will be successful as it helps contracted advertisers target sales through a new retailing channel. As media demand for CME's network increases, we expect that this driver will accelerate the growing momentum of the advertising platform in CME. It also enhances value to advertisers, as advertisers not only spend their money on CME's platform but they can also earn money from CME's platform. Passengers will be able to enjoy lower prices for products sold through SWITOW. This platform should be a win-win-win situation for CME, the contracted advertisers, and passengers."

"As previously announced, this project has been in the works for several months. With the launch of the SWITOW platform, we are expanding our revenue sources by offering customer-direct sales to our advertising clients at a relatively low cost and our clients are able to optimize their advertising expenditures by using our media platform. We expect the incremental revenue and profits from this extension of our core business to be reflected in our 2011 financial results."

(Source: Business Wire, 2010-12-28)

Chinas largest television advertising operator on inter-city and airport express buses, today announced that its Board of Directors has approved the implementation of a dividend policy on its common and preferred shares. Pursuant to the policy adopted by the Board, commencing with the six month period ending December 31, 2010, a semi-annual cash dividend of 5% to 10% of CMEs net profit will be paid upon receipt of the related financial statements by the Board. The Companys Board of Directors will decide the exact payable amount at the corresponding board meetings in light of CMEs cash flows, expected liquidity needs and future corporate strategies.

CMEs Founder & CEO, Zheng Cheng, commented, Consistent with our commitment to continuously maximize value to our investors, our Board of Directors agreed that with the Companys exceptional balance sheet and solid free cash flow generation, it is time to recognize the ongoing support of our shareholders. With this payout ratio, we will continue to have the financial flexibility to invest in our high-return, high-growth projects.

(Source: Business Wire, 2010-12-16)

Based on year-to-to-date results and expectations for the fourth quarter, the Company is increasing its 2010 net income guidance which is expected to be in the range of $100 million to $104 million compared to the previous net income guidance of $82 million to $85 million (on a non-GAAP basis, exclusive of non-cash charges for (i) share based compensation in connection with the granting of options under the Companys share incentive plan expected to be adopted later in 2010 and (ii) deemed dividends on outstanding convertible preferred shares).

"As we have mentioned in the past, we are working on several additional opportunities to increase our market share and reinforce our position as one of the leading players in the out-of-home advertising space. Furthermore, mergers and acquisition remain a corporate priority. We are very proud of our achievements and look forward to continued growth during the years ahead."

(Source: PR Newswire, 2010-11-08)

We anticipate a significant change in our results of operations from the corresponding period in the last fiscal year. Based on currently available information, we anticipate reporting net income will be in the range of $27 million to $29 million for the quarter ended June 30, 2010.

(Source: NT 10-Q Filing, 2010-08-10)

China MediaExpress Holdings it is revising its 2010 net income guidance. The revised guidance calls for 2010 net income to be in the range of $82 million to $85 million (on a non-GAAP basis, exclusive of non-cash charges for share based compensation in connection with grants under the Companys share incentive plan expected to be adopted later in 2010 and deemed dividends on outstanding convertible preferred shares), compared to the initial 2010 net income guidance of $71 million to $75 million. "Our revised 2010 net income guidance reflects the continued growth of our business from existing revenue sources, and excludes the impact of any possible acquisitions, additional new buses, new revenue streams and any new investments in other media projects in 2010."

(Source: PR Newswire, 2010-07-12)

Effective as of the close of trading on June 2, 2010, the Companys common stock will cease trading on NYSE AMEX. Upon the opening of trading on June 3, 2010, the Company's shares will commence trading on NASDAQ Global Select Market, under the same ticker symbol "CCME".

(Source: Business Wire, 2010-05-19)

Based on the current customer base, geographic coverage, network of express buses and existing revenue streams, CMEs management reaffirms its 2010 net income guidance which is expected to be in the range of $71 million to $75 million (on a non-GAAP basis). As previously announced, these projections exclude the impact of any possible acquisitions, additional of new buses and new investments in other media projects in 2010.

(Source: Business Wire, 2010-05-14)

Based on currently available information, we anticipate reporting net income of approximately $18 million for the quarter ended March 31, 2010, before making any adjustments for the accounting of the preferred shares that we previously issued for the quarter ended March 31, 2010.

(Source: NT 10-Q Filing, 2010-05-10)

Based on the current customer base, geographic coverage, network of express buses and existing revenue streams, CMEs management projects that its 2010 net income (non-GAAP which is before share based compensation or fair value adjustments for the Companys financial instruments), will be in the range of $71 million to $75 million. These projections exclude the impact of any possible acquisitions, additional of new buses and new investments in other media projects in 2010. "We believe that our Company is well positioned to further benefit from the rapid growth in the advertising spending in China, the second largest advertising market in Asia, and one of the largest and fastest growing markets in the world. We are very proud of our success and are confident that our Company has a bright future."

(Source: Business Wire, 2010-03-23)
CCME
Media & Advertising

COVERAGE SUSPENDED OR TERMINATED
 
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SAFETY/RISK SCORE
EXTREME RISK
DETAILS: Safety/Risk Model for CCME
Current Price:  n/a
F10k Day (2009-10-20): -100.00%$9.20
2009 Close: -100.00%$10.60
2010 Close: -100.00%$15.84
2011 Close: -100.00%$0.02
High (2011-08-03): -100.00%$1.50
Low (2011-11-30): -100.00%$0.01
Exchange:
Market Capitalization: n/a
Total Shares: 38.43 mill
Float: n/a
Avg Volume: n/a
Last Quarter: 2010-09-30
Revenue (MRQ): 56.96 mill
Net Income (MRQ): 31.13 mill
Op. Cash Flow (MRQ): 30.75 mill
all financial data provided without warranty