Business Description

Founded in 2003, China MediaExpress Holdings, Inc. (CCME) is China's largest television advertising operator on inter-city and airport express buses. The Company generates revenue by selling advertisements on its network of television displays installed on over 27,200 express buses originating in eighteen of China's most prosperous regions, including the four municipalities of Beijing, Shanghai, Tianjin and Chongqing and fourteen economically prosperous regions, namely Guangdong, Jiangsu, Jiangxi, Fujian, Sichuan, Hebei, Anhui, Hubei, Shandong, Shanxi, Inner Mongolia, Zhejiang, Hunan and Henan.

Investment Highlights

Strong Nine Months 2010 Results
• Revenue increased by 142% to $155.0 million as compared to $64.0 million.
• Income from operations increased by 179% to $103.8 million as compared to $37.2 million.
• Net income increased by 184% to $77.8 million or $1.86 per diluted share as compared to $27.4 million or $1.31 per diluted share.
• As of September 30, 2010, the Company had approximately $170 million in cash.

Strong revenue and net income growth since its inception and continued growth is anticipated
• 2009 net revenues increased 52.3% to $95.9 million as compared to $63.0 million in 2008.
• 2009 net income increased 58.2% to $41.7 million as compared to $26.4 million in 2008.
• 188% CAGR in net revenue from 2006-2009.
• 259% CAGR in net income from 2006-2009.
• 2010 net income is estimated in the range of $100 million to $104 million.

CCME is the market leader for television advertising on inter-city and airport express buses in China
• Advertising network of over 27,200 buses and long-term agreements with 74 bus operator partners.
  • A monthly average of approximately 80 million passengers travel on CCME's network of buses.
• Exclusive license from the Chinese Ministry of Transport to install nationwide in-vehicle TV system on buses.

Has expanded its business to include airport express buses in its network
• The Company's network of airport express buses covers six airports: Beijing, Fuzhou, Guangzhou and Qingdao, Changsha and Chongqing.
• In Q1'10, CCME implemented premium advertising rates for airport express buses generating approximately $35.1 million in revenue for the nine months ended September 30, 2010.

Has increased its revenue sources, providing clients with additional advertising channels
• Since Q3'09 CCME is generating revenue from embedded advertisements which are displayed during the broadcast of the entertainment content.

CCME's Business Model

Long-term framework agreements with 74 bus operator partners
• Terms ranging from three to eight years
• Pays bus operators concession fees for the right to install displays and automated control systems inside buses and display entertainment content and advertisements
• Concession fees are based on the number of buses carrying its advertising and number of passengers
  • Concession fees are subject to increase 10% - 30% per year

Installs the equipment and control systems on the buses at its own expense

Provides entertainment programs and advertising
• Obtains a wide range of free content from two of China's largest television stations
• Produces content internally (CCME has a production license)
• Purchases limited movies and programs
• Displays advertisements for ten minutes after every thirty minutes of entertainment programs

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