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  • 2008 China MediaExpress Ad Raises Questions
    I mentioned in my earlier post that there were some evidence available in Chinese language that haven't been publicly discussed yet.  I had seen some other evidence that have made me suspicious of the company, but they are not as "black or white" as the evidence about the L'Oreal ads.  I had been hesistant about discussing these other evidence, but since I have been accused of hiding things by some longs, I am disclosing one example here and leave you to judge for yourself.  

    Below is excerpt from an an ad apparently posted by CCME in July 2008 on putop.com, a small Chinese B2B website.  You can use Google Translate to get the gist of its meaning.  
     
    In the ad, CCME is soliciting "investors" for the video systems it needs to install for its expansion.  The ad states that video system costs RMB 6000 each.  The "investment proposal" was for an investor to buy the systems (minimum of 10 systems per investor) and then lease them to CCME for a term of 5 years, and CCME would pay the investor an annual rent equal to 1/5 of the cost of the system.  At the end of the 5 years, the investor can choose to either sell the system at an unspecified price to CCME or renew the lease.  An obvious problem with this purported investement is that the video system will most likely be obsolete after 5 years of use.  If the video system is worth nothing at the end of the 5 years, then the investment is effectively a 5-year interest-free loan.    

    A translation of the cash flow table provided in the ad (see original below):
     

    Number of Vehicles Invested 

    Investment Cost

    Annual Rental Payment

    Total Rental Payments over 5 years

    Sum of Five years' Rental Payments plus Value of Equipment

    10 buses

    60K yuan

    12K yuan

    60K yuan

    120K yuan

    50 buses

    300K yuan

    60K yuan

    300K yuan

    600K yuan

    100 buses

    600K yuan

    120K yuan

    600K yuan

    1.2M yuan

    150 buses

    900K yuan

    180K yuan

    900K yuan

    1.8M yuan

     The ad is dated July 7, 2008.  The ad also mentions CCME was working with CTR marketing research, another indicator that the ads was written in 2008.  The CTR report on CCME was done in 2008.  
     

    Some immediate questions that arise from this ad:
     
    (1) With supposed nearly US$30 million in the bank, why did CCME resort to this kind of fundraising scheme?  

    On its 10-K filed in March 2010, it reported holding $30 million in cash at the end of 2008.  With $30 milliion, it could have purchased 30000 video system at the RMB 6000 per system rate stated in the ad.  With $30 million in cash, it could also have easily obtained a bank loan.  
     
    (2)  If CCME still mostly operated in Fujian and Guangdong provinces as described in the ad, could it have had over 15000 buses under contract and earned US$63 million in revenue in 2008?

    The ad describes the company as being dominant in Fujian and Guangdong and has just started to expand elsewhere.  

    Yet CCME reported revenue of US$25 mil in 2007 and US$63 mil in 2008.  (CCME's 2007 and 2008 financials were audited by the 10-person Denver firm of A.J. Robbins (PCOAB's report on AJ Robbins.))  In a Sept 2010 presentation to investors, CCME claimed that it had 15260 buses under contract by 2008.  

    If CCME was still mostly a Fujian and Guangdong operation in 2008, as is described in this ad, these bus and revenue would be implausible.  

    (3) The ad said that CCME had only 500 video systems installed on buses in Fujian and planned for a total of 2000 in Fujian.  How many buses total had CCME's video systems installed in 2008, in Fujian or anywhere else?

    According to CCME's rate card, as of July 2010, it had 2200 buses in Fujian province and 2100 buses in Guangdong province.  
     
    Yet the ad states: "High-speed Channel (China MediaExpress) headquarters plans to develop a total of 2000 high-speed buses within Fujian province within 2 years, in two steps.  As a first step,  we plan to install our systems on 1000 high-speed buses at our base in the city of Fuzhou (currently already installed on 500 buses). "

    (Chinese original: "高速频道总部计划两年内在福建省发展高速大巴汽车总数量为2000部,分两批安装,第一批规划在福州始发地的高速大巴上安装1000部{目前已安装车辆 500多部}").
     
    So how many buses really had the video system installed in 2008?  Where did the revenue of $63 million come from?

     
    Excerpt from the ad:
     

    (二)客运汽车网络资源:在福建省已与福建快运、中旅集团、闽深发、闽 运等福建省所有的著名国有大型运输公司签订‘垄断性’的合作协议,拥有车辆独家经营广告发布权,资源的垄断保证了福建省不会出现第二家企业、类似的项目可 以与高速频道相抗衡。到2008年底,高速频道可实现全面覆盖福建省内所有的高速豪华大巴。同时我司已与其它省份的运输公司进行交流,可望在2010年前 独家运营全国各类高速豪华大巴上的视频媒体播放权。

    五、 回租投资计划

    高 速频道总部计划两年内在福建省发展高速大巴汽车总数量为2000部,分两批安装,第一批规划在福州始发地的高速大巴上安装1000部{目前已安装车辆 500多部},第二批规划在我省其它的市级城市厦门、泉州、漳州等地安装余下的1000部车辆,为了加快安装速度,扩大高速频道覆盖规模,经分众传媒董事 会研究决定,诚邀全国有意投资传媒行业的单位或个人加盟高速频道,回租投资方案如下:

    (一)投资者只需投入资金购买高速频道的车载播放器设备,租赁给分众传媒统一运营高速频道,以收取年租金的方式获得利润,租期时间为五年。

    (二)每位投资者投资高速频道车载播放器最低数量限10部,最高数量限150部;

    (一)高速频道车载播放器设备费为6000元/部(含设备费、硬盘费、调试费、安装费及运营费);

    (二)保证20%的年回报,合作期满后设备可售给分众传媒或继续租赁;

    (三)若投资者中途退出(收回设备款)按年限不同减扣运营费后给予结算,具体见合同;

    (四)高速频道车载播放器设备安装完毕后,由汽车运输公司出示该公司车辆已安装高速频道车载播放器的证明(加盖汽车运输公司章即可生效),分众传媒与投资者签约并提供安装设备所有权证明,以下是最低投资车辆数至最高投资车辆数的的举例说明图:

     

    投资车辆

    投资费用

    年可收租金

    五年可收租金

    五年投资回报款+设备款

    10辆

    6万元

    1.2万元

    6万元

    12万元

    50辆

    30万元

    6万元

    30万元

    60万元

    100辆

    60万元

    12万元

    60万元

    120万元

    150辆

    90万元

    18万元

    90万元

    180万元

     


        
    Full Text of the Advertisement


    福建省高速频道投资合作方案

     

    一、 高速频道项目简介

    高 速频道是由中国二级、福建省一级传媒资质企业福州分众传媒有限公司投资开发、在福建省九地市往返于全国经济发达城市的豪华客运大巴上,安装拥有国家专利的 车载全自动视频播放系统(国家专利号:200520073752.7),该系统与车上电视及立体声音响相连接,按照既定程序,进行精彩节目、广告资讯滚动 播出,形成一种新型稳定的车载电视频道,拥有全省最为庞大的移动受众群体,汇聚了最为集中的商务流动人群。2005年年底与福建电视台6套、7套节目的合 并更为高速频道的飞速发展奠定了坚实的基础。

    高速频道在业内被人们誉为“福建省第一车载电视台”,目前高速频道 已全面覆盖中国东南沿海黄金路线,锁定上万车次开往福、厦、漳、泉、广州、汕头、深圳、港澳等地区的豪华客运大巴,每月都有千万以上的观众在关注高速频道 电视节目及广告,高速频道两小时以上强制性的收看平台成为各类商家发布广告信息的传媒战略平台。开业至今,高速频道已成功为中国劲牌、百事可乐、中国网 通、日立、西门子、麦当劳、湄洲湾景区、蒙牛等近百家国际知名品牌及省市级企业高端客户进行过有效的传播,目前除了烟草企业外,在高速频道优势宣传平台投 放广告的企业囊括了1999-2006年福建省内广告投放的12大排行榜企业,越来越多的品牌企业选择高速频道做为自己的投放媒体,足以证明其适应传媒市 场的发展潮流,具有强大的生命力和良好的市场前景。我们的团队有绝对的信心在2008年前把高速频道发展成为福建省最重要的品牌传播媒体, 全面覆盖奔驰在福建全省高速公路上的豪华大巴,在2010年前发展成为中国第一车载电视频道,成为企业投放广告时必须要投放的媒体。

    二、 项目发展商--分众传媒简介

    福 州分众传媒有限公司(以下简称分众传媒)成立于2002年,是中国二级、福建省一级传媒资质企业、是福建省最早开发楼宇电视的传媒企业, 目前分众传媒电视联播网已遍布福建省数百个写字楼、星级酒店的候梯间、社区物业闭路系统等上千个网点,是福州市公安消防支队指定媒体及合作媒体,5·18 指定媒体及宣传合作媒体,是新浪网、福建电视台、福州日报、福州晚报、海峡都市报、东南快报等媒体的战略合作伙伴,拥有福建省最为庞大的白领群体,汇聚了 最为集中的商务人群,是一家集新媒体开发、企业品牌宣传为一体的全方位、多层次的品牌培育基地,其综合实力位居行业第一。

     

    三、 竞争优势分析

    (一)高科技播放系统:高 速频道独有的全动多媒体视频播放系统(国家专利号:200520073752.7),拥有与众不同的特点:电门控制技术,只要车子一启动,设备就会自动启 动;采用电脑PC播放器,以MP4的模式进行DVD高清版播放,播放程序可靠、稳定、安全,而传统的车载电视采用VCD播放器播放,由于客车在行进中难免 会颠簸和振动,造成画面跳动或卡片现象,所以无论是从画面清晰度还是播放的稳定性来看,毫无疑问传统的车载电视VCD播放器是无法与高速频道采用国家专 利、具有高科技含量的播放系统相比的。

    独特性:①赢利独特性:独创高速公路+高速大巴+电脑网络+手机短信的赢利模式;②管理独特性自行开发的数据管理软件,成功运用在管理上,具有管理上的独特性;③独创

    (二)监播体系独创高速公路线路群组抽查形式,使得该新兴媒体得以实现完美监播,目前高速频道总部已邀请国际权威监播机构—央视CTR做为专业监播机构,确定全国监播方案;④节目实时下载功能:高速频道节目实时下载功能与短信即时发送的技术遥遥领先于国内任何“对手”。

    四、 独有的资源优势分析:

    (一)节目资源优势:全 面解决节目源问题,2005年底福建电视台6套、7套(都市时尚频道、经济生活频道)已并入高速频道,正版、精彩纷呈的节目保证了主动观看的乘客,保证了 广告资讯的100%到达:得到广告客户的认同。福建电视台是福建省历史最长,目前受众最多的电视媒体,是福建省政治、经济、文化、科技发展动态最快捷,最 全面,最权威的信息来源。福建电视台以其精良的节目制作,高质量的播出效果,保证了占绝对优势的高收视率。福建电视台与高速频道的强强联手,保证了高速频 道在几年内品牌知名度的迅速提高,促进高速频道的快速发展;海峡都市报、V2频道等著名媒体已与我司签订了无偿的宣传协议,强力保障了高速频道品牌知名度 迅速提升;现在FETV频道每晚,海峡都市报、福州晚报、福州日报、东南快报等报纸每周都有高速频道的自身形象宣传报道。

    (二)客运汽车网络资源:在 福建省已与福建快运、中旅集团、闽深发、闽运等福建省所有的著名国有大型运输公司签订‘垄断性’的合作协议,拥有车辆独家经营广告发布权,资源的垄断保证 了福建省不会出现第二家企业、类似的项目可以与高速频道相抗衡。到2008年底,高速频道可实现全面覆盖福建省内所有的高速豪华大巴。同时我司已与其它省 份的运输公司进行交流,可望在2010年前独家运营全国各类高速豪华大巴上的视频媒体播放权。

    (三)团队精神:再 好的项目也离不开开创精神、优秀团队的运营,高速频道拥有一批大专以上学历、年轻的精英团队,以良好的高速频道企业文化,聚合于分众,群策群力,保证高速 频道能够成功运营,并且不断发展壮大。分众传媒运营至今已五年,成功运营了福建省楼宇电视联播网后,对新媒体的培育、经营及发展直至上市的过程有着深刻的 了解,也保证了高速频道的长久发展。

    五、 回租投资计划

    高 速频道总部计划两年内在福建省发展高速大巴汽车总数量为2000部,分两批安装,第一批规划在福州始发地的高速大巴上安装1000部{目前已安装车辆 500多部},第二批规划在我省其它的市级城市厦门、泉州、漳州等地安装余下的1000部车辆,为了加快安装速度,扩大高速频道覆盖规模,经分众传媒董事 会研究决定,诚邀全国有意投资传媒行业的单位或个人加盟高速频道,回租投资方案如下:

    (一)投资者只需投入资金购买高速频道的车载播放器设备,租赁给分众传媒统一运营高速频道,以收取年租金的方式获得利润,租期时间为五年。

    (二)每位投资者投资高速频道车载播放器最低数量限10部,最高数量限150部;

    (一)高速频道车载播放器设备费为6000元/部(含设备费、硬盘费、调试费、安装费及运营费);

    (二)保证20%的年回报,合作期满后设备可售给分众传媒或继续租赁;

    (三)若投资者中途退出(收回设备款)按年限不同减扣运营费后给予结算,具体见合同;

    (四)高速频道车载播放器设备安装完毕后,由汽车运输公司出示该公司车辆已安装高速频道车载播放器的证明(加盖汽车运输公司章即可生效),分众传媒与投资者签约并提供安装设备所有权证明,以下是最低投资车辆数至最高投资车辆数的的举例说明图:

     

    投资车辆

    投资费用

    年可收租金

    五年可收租金

    五年投资回报款+设备款

    10辆

    6万元

    1.2万元

    6万元

    12万元

    50辆

    30万元

    6万元

    30万元

    60万元

    100辆

    60万元

    12万元

    60万元

    120万元

    150辆

    90万元

    18万元

    90万元

    180万元

     

    六、合作流程(若您有意向加盟投资高速频道,请按以下合作流程进行)

     

    ⑤正式实施

    ①向分众传媒索取资料

    ④双方签约并按约定汇入设备投资款

    ②走访分众传媒并考察项目

    ③向分众传媒提交申请-获得分众传媒同意-确定合作关系

      

     七、项目发展趋势

    随着品牌广告主对受众群体的细分定位,使得移动视频媒体发展成为广告行业的主流,高速频道所表现出极强的可操作性和丰厚的利润回报,充分说明了该媒体强大的生命力和良好的发展前景。朝阳投资行业,规模化的运作模式,为您创造低投入、高回报的利润空间!

    八、担保及保险

    为 充分保障投资者的利益,保证设备的安全及租赁合同的安全实施,分众传媒特别邀请中国平安保险股份有限公司做为设备的保证单位,保证设备的安全,一旦设备发 生丢失或损坏,由中国平安保险股份有限公司负责赔偿责任(具体另行详谈),并由福州玖玖担保有限公司及福州寿山瀑谷风景区做为本租赁合约的担保单位,承担 连带责任。 

     

    高速频道(福建)总部

    福州分众传媒有限公司




    详细参数
    • 公司名称:
      福州分众传媒有限公司
    • 发布日期:
      2008年07月07日
    联系方式
    • 联系人:
      蔡婉玲 女士 (经理)
    • 地址:
      中国福建福州市福州市东大路8号花开富贵A座20层
    • 邮编:
      350003
    • 传真:
      86059187610415
    • 电话:
      86059138111877
    • 移动电话:
      13067461460
    给我们留言

    Tags: CCME
    Mar 01 2:33 AM | Link | 62 Comments
  • Unable to Verify Customer Mentioned in Global Hunter Report on China MediaExpress
    (Update: see also "2008 China MediaExpress Ad Raises Questions")


    On February 17, in a rebuttal to some of the negative claims recently made against China MediaExpress (OTCPK:CCME), Global Hunter Securities issued a new research report by its analyst Ping Luo.  This latest report is follow-up to earlier reports on CCME by Ping Luo and describes, among other things, her latest review of the company's bank account statements, tax filings, customer contracts, and interviews with customers, during her visit with the company in China.

    Regarding the interviews with customers, the report states:
    In addition to talking to CCME’s direct customers, we called China Telecom Jiangsu Branch, as well as the exclusive advertising agencies for Coca Cola and L’Oreal in the Shanghai region, who are CCME’s indirect customers but confirmed with us that they have placed ads on CCME’s platform. 
     
    I work and live in China and happen to have a friend who works at L'Oreal's China headquarters in Shanghai.  So I asked her about CCME.  She checked with her colleagues in the advertising group, as well as the manager in charge of advertising placement.  They all told her that they have never heard of China MediaExpress or Fujian Fenzhong Media.  I sent her a copy of CCME's ratecard available from its website, which has CCME's names in Chinese, and we are both native Chinese speakers, so there is no question of confusion about the names of the company.  Indeed, she was further told that L'Oreal does not place advertisement on inter-city long-distance buses or airport buses because their passengers tend to be more of a "mobile / transient population".  They do place ads in subways and buses within cities.  I suspect a related reason is that the passengers on inter-city long-distance buses, in particular, but also airport shuttles, tend to be largely male, whereas L'Oreal's target consumers are mostly urban female office workers.  

    After learning this from my friend, I tried to get responses from Ping Luo and Jacky Lam, CCME's CFO.  i asked them for the name of the agency responsible for the L'Oreal ads that Ping mentioned in her report so that I could check again with L'Oreal. Ping told me that she was given the contact information on a confidential basis and asked me to get it from Jacky Lam.  

    Over the course of last two days, I have been exchanging emails with Jacky Lam to get information about the ad agency so I can clear up this conflict.  So far, I have been unsuccessful in getting any further information from Jacky Lam. 

    You can read the emails between Jacky and me below.  

    Both Jacky Lam and Ping Luo told me that they cannot tell me the name of the ad agency because their client ad agencies have already been contacted by too many longs and shorts in recent days.  Considering how secret CCME has been about the names of the ad agencies that are its customers (other investors have also mentioned any inability to obtain customer names from the company), it is difficult to understand how they could have been receiving calls from investors to any significant extent.  Bus Online, a competitor to CCME that does advertisements on buses within cities, provides a full list of ad agencies they work with on its website, even though it is still a private company.  A publicly listed company should obviously expect to be much more transparent.  

    Given the lack of responsiveness from the company to my inquiry, I have decided to go public and wait for a public response from the company.  Jacky Lam made no attempt to respond to the substance of my findings but instead asked for the contact information of my source, which I was not willing to disclose in the interest of my friend's privacy.  This will give the company a chance to give its answer to the all investors.  As I mentioned to Jacky, under Reg FD of the US securities rules, a listed company is required to share with the general public all material non-public information it discloses to analysts.  
     
    The best course now would be for CCME to release a signed statement from the ad agency handling the L'Oreal ads to confirm the amount of ads they placed with CCME in 2010.  In fact, the company could clear up most of the questions about its business if it would release similiar statements from as many of its customers as possible, including the ones Ping Luo mentioned on an anonymous basis in her February 17 report.  

    Disclosure: I hold a short position in OTCPK:CCME.  I have other reasons to be doubtful about the company besides this latest discovery, on the basis of both widely published report and Chinese materials that I found which have not yet been discussed in English language forums.  I have not written yet about those other discoveries because they are more in a gray area.  They may cast doubt but would not necessarily prove things 100% one way or another.  But this latest discovery is much more of a black-or-white issue.  I am very confident about my source and felt this was important enough to be brought to the public's attention.  

    p.s  It's true that the account I am giving here is not indepedently verifiable as is (though you could contact L'Oreal Shanghai yourself to check).  I am asking others to take my word for it to a degree.   The burden of proof and disclosure, however, is on the company. That's the burden a company assumes by going public. It would be easy for the company to provide evidence that L'Oreal is an (indirect) customer and the level of business it does by getting a statement from the ad agency it works. If they had provided that kind of documentary evidence for all their major customers, nobody would be asking all these questions.

    If this were the only issue I had with the company, I would not have come forward now.  But given all the other questions about the company, I felt trying to get the company's side of the story for two days was long enough.  
     
     
    ---------- Forwarded message ----------
    From: xxxx <xxxx>
    Date: 2011/2/25
    Subject: Re: 答复: CCME customer
    To: Jacky Lam <jackylam@mediaexpress.com.hk>
     
    If you do not present evidence of your business with L'Oreal using the two methods I mentioned or something equivalent, then I will go public with my findings and wait for your public response. 
     
    ---------- 
    From: xxxx <xxxx>
    Date: 2011/2/25
    Subject: Re: 答复: CCME customer
    To: Jacky Lam <jackylam@mediaexpress.com.hk>
     
    Jacky, 
     
    My friend was checking for me as a favor.  I can't release her contact info without a good reason.  
     
    The situation is I described in my email: according to a manager in charge of advertisement placement at L'Oreal's China headquarters in Shanghai, they do not place advertisements on airport buses and long-distance inter-city buses.  
     
    Global Hunter's Ping Luo's Feb. 17 report states that CCME gave her the contact information for the agency handling the L'Oreal ads in Shanghai and she confirmed with them that they place ads on CCME's buses.  As a US-listed company, you are obligated to give the public access to the same information that you give to analysts.  See SEC Reg FD (Fair Disclosure): en.wikipedia.org/wiki/Regulation_Fair_Di...
     
    To clear the conflicting information between what Ping Luo reported and what I have learned from L'Oreal,  you could either 
    - give me the name of the agency handling the L'Oreal ads that you gave to Ping Luo so I can check with L'Oreal again, or if you prefer,
    - have the ad agency Ping Luo mentioned release a signed statement stating the amount of ads for L'Oreal they placed with CCME in 2010 and you can release the statement to the public.
     
    Thank you.  
     
    ---------- Forwarded message ----------
    From: Jacky Lam <jackylam@mediaexpress.com.hk>
    Date: 2011/2/25
    Subject: Re: 答复: CCME customer
    To: xxxx <xxxx>
     
    As mentioned, please provide your contact so that I can understand call him/her to understand the situation. I can then give you a proper response. 
     
    Sent from my iPhone 
     
    ---------- 
    From: xxxx <xxxx>
    Date: 2011/2/24
    Subject: Re: 答复: CCME customer
    To: Jacky Lam <jackylam@mediaexpress.com.hk>
     
    I am an investor trying to verifying the various claims about the company.  Any response to the substance of my email?  
     
    ---------- 
    From: Jacky Lam <jackylam@mediaexpress.com.hk>
    Date: 2011/2/24
    Subject: 答复: CCME customer
    To: xxxx <xxxx>
     
    Could you give your contact to me instead?  Our customers are subject to serious disturbance in this period.   Also, may I know who are you? 
     
    ---------- 
    From: xxxx <xxxx>
    Date: Thu, Feb 24, 2011 at 4:52 PM
    Subject: Re: CCME customer
    To: jackylam@mediaexpress.com.hk
     
    Any response, Jacky?
     
    ---------- 
    From: xxxx <xxxx>
    Date: Wed, Feb 23, 2011 at 8:09 AM
    Subject: CCME customer
    To: jackylam@mediaexpress.com.hk
     
    Hi Jacky,
     
    I have been following the recent news on China MediaExpress as an investor and was particularly glad to see Global Hunter's Feb. 17 report provide more detailed information on the customers.  The report mentions that Ping Luo obtained the names of customers and ad agencies from CCME and was able to verify them.  In particular, Ping Luo wrote that she verified CCME's customer contracts with the exclusive ad agencies for Coca Cola and L'Oreal in Shanghai.  

    I happen to have a friend who works at L'Oreal in Shanghai, which is their China headquarters.  I asked her about CCME / Fujian Fenzhong and gave her a copy of your rate card.  She checked with their manager in charge of advertising and was told that they have not heard of CCME or Fujian Fenzhong and that in any case, L'Oreal does not place ads on long-distance buses and airport buses because their passengers tend to be of a "mobile population".  They do, however, place ads on subway and buses within large cities.  Could you give me the contact info for the ad agency for L'Oreal you gave to Ping Luo so I could check the name with my friend?  This is serious.  We need to get to the bottom of this. 
    Tags: CCME
    Feb 25 5:25 AM | Link | 243 Comments
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