Response to an inquiry from a GeoUser regarding China Mediaexpress Holdin (OOTC:CCME) near term price prospects:

I do think China Mediaexpress Holdin (NASDAQ:CCME) has more legs and may add to my position if it pulls back due the Egyptian crisis effect on the entire market. I think fair value is around $26.00 based on a P/E of 10 on 2010 analyst estimates. I am not willing to set a target on 2011 numbers until I get a better read on expectations. As it stands now, 2011 estimates are weak, but they probably do not take into account the addition of buses and the new internet venture. Management has done a pretty good job of exceeding expectations.

What could take CCME past fair value or set a higher fair valuation target?

1. Issue guidance that implies at least 30% EPS growth
2. Pass the 2010 audit
3. Acquisition
4. Short squeeze
5. Healthy market

I firmly believe that CCME will easily surpass 2010 4th quarter expectations and that the stock (barring market correction) will approach $26 before the year end earnings release. If the company does not issue bang bang guidance, i think $26 is short term top. We also have to be cognizant that down grades will come in the mid $20 range. If guidance is over the top, a massive short squeeze could occur. I will methodically sell some CCME as it reaches $26,but keep some just in case they surprise on the guidance front or with some other news. I also strongly believe that shorts will need to construct  a hit piece on CCME. They will not go down without a fight.  But this may take some time. I have had a hard time developing a strong fraud case, but I suspect the shorts will focus on: large div payment to founder, tax avoidance, kick backs, exaggeration of buses and margins. In the mean time I will consider on the ground DD. (I will also be curious to hear what Rick Pearson came up with).

Maj