Management claims the company has grown faster and produced more cash flow than any other US listed Chinese Media Company over the last 4 years. In spite of having spent a mere fraction of what competitors have on infrastructure, CCME has purportedly grown profits from $2M to to its recently raised guidance of $85M expected this year, on revenues of $200 million. Over the last 8 quarters, CCME reported generating $95 million of cash flow after all CAPEX and for-cash acquisitions. If true, this ROI would be one of the highest in the world, and a complete outlier in the Chinese advertising market, generating even more profit than giant Focus Media, and outpacing all of their competition by a landslide despite their smaller footprint. There is only one problem: No One in China Has Ever Heard of Them. It is Citron’s opinion that if this company were operating in the United States, the stock would have buckled long-ago over the lack of transparency in its story.
CCME Hit Piece from Citron Research
About the Author: Michael Lewis
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