Global Hunter Securities, LLC August 16, 2010

Fort Worth  Houston  Los Angeles  New York Company Update

Newport Beach  New Orleans  San Francisco China
Institutional Sales & Trading: (949) 274-8050
Research: (949) 274-8052 Senior Analyst: Ping Luo, CFA
www.ghsecurities.com pluo@ghsecurities.com
Direct: (212) 644-8913
Associate Analyst: Jodi Dai
jdai@ghsecurities.com
Direct: (212) 644-8913
Rating: Buy
Price Target: $21.00
China MediaExpress Holdings, Inc.
(Nasdaq: CCME)
Price Target M etrics: 9x P/E (2010)
Event: Strong Q2 results. Raising estimates and price target; Reiterate Buy.
Current Price: $10.68
Diluted Shares: 35.8MM Summary: China MediaExpress (CCME) reported strong Q2 results which highlighted an
Float: 27% impressive gross margin improvement due to greater contribution from higher-margin airport
Short Interest: 1.9MM express buses. The company continued to expand its network by adding new buses and
Average Daily Volume: 340k operators into its system. The company also generated strong operating cash flow of $25MM in
52-w eek Range: $7.51-$14.82 the quarter and further strengthened its balance sheet. With $139MM in net cash, management
Market Cap: $383MM expressed the consideration of various options to improve shareholder’s value. We expect
Cash & Investments: $139MM continued growth as the company further expands its inter-city and airport bus network and
Debt: $0MM explores value-added services. Despite a strong 1H, CCME reiterated its prior FY10 net income
Enterprise Value: $243MM guidance, which we view as conservative. We are raising our ’10 and ’11 EPS estimates. We
Net Cash/Sh: $3.89 believe shares are considerably undervalued, trading at just 4.5x our ’10 EPS estimate. Thus,
Tangible Book Value/Sh: $4.21 we reiterate our Buy rating and raise our 12-month price target from $18 to $21, representing
PR IC E C HA R T 9x our new ’10 EPS estimate.
$16 4,000
$14 3,500
Highlights
$12 3,000
$10 2,500
Strong Q2 results. Q2 revenue of $53.5MM was roughly in line with our $55.1MM estimate and represented
$8 2,000
over 180% YoY growth and 20% QoQ growth, driven mainly by expansion in network coverage. Net income
$6 1,500 of $28.5MM or $0.80 per share (based on 35.8MM diluted shares) was far ahead of our estimate of
$4 1,000 $21.5MM or $0.53 per share (based on 40.5MM diluted shares). In Q2, the company continued to expand its
$2 500
network. It increased the number of bus operators and number of buses from 46 and 20,422 at the end of Q1
$0 0
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to 59 and 22,775 at the end of Q2, respectively. At present, the company has its programs running on over
23,200 express buses with 61 bus operators. Airport express buses that CCME just started reporting in Q1
EST IM A T ES - U S $ ( M M s excep t mult ip les & EPS) contributed $13.1MM or 24% to total revenue, representing an 87% QoQ growth. CCME currently covers the
FY 0 9 F Y 10 F Y 10 F Y 11 F Y 11 airports in Guangzhou, Fuzhou, Beijing, and Qingdao.
Pr io r N ew Pr io r N ew
R evenues
Gross margin shines. The EPS outperformance in Q2 was largely due to an impressive gross margin of
Q1 M ar $ 18.8 A $ 44.5 $ 44.5 A $ 59.0 $ 60.1 E 79%, representing a significant improvement from 62% in 2Q09 and 60% in Q1, and compared to our
Q2 Jun $ 19.1 A $ 55.1 $ 53.5 A $ 67.0 $ 67.6 E estimate of 64%. We believe the higher than expected gross margin was primarily attributed to increased
Q3 Sep $ 26.1 A $ 55.6 $ 55.7 E $ 78.0 $ 77.7 E weight of airport express buses (24% of Q2 revenue versus 16% in Q1) which carries much higher margins
Q4 Dec $ 32.0 A $ 56.3 $ 57.3 E $ 84.0 $ 82.7 E
(over 80% versus ~60% for inter-city express buses). Management expects gross margin to stay at
FY $ 95.9 A $ 211.5 $ 211.0 E $ 288.0 $ 288.1 E
approximately 70% in 2H.
EV / Sales 2 .5x 1.2 x 0 .8 x
Strong balance sheet and cash flow. The company generated strong operating cash flow of $25MM for Q2
EPS, D ilut ed and $38MM for 1H. As of the end of Q2, CCME had $139MM in cash and no debt, up from $114MM net
Q1 M ar $ 0.36 A $ 0.54 $ 0.54 A $ 0.49 $ 0.55 E cash at the end of Q1. In regards to the use of cash, management plans to deploy $10MM for equipment
Q2 Jun $ 0.40 A $ 0.53 $ 0.80 A $ 0.55 $ 0.62 E
upgrades and repairment, $10MM-$20MM to acquire operating rights from other media companies, and
Q3 Sep $ 0.56 A $ 0.51 $ 0.59 E $ 0.65 $ 0.71 E
Q4 Dec $ 0.49 A $ 0.46 $ 0.48 E $ 0.61 $ 0.66 E $10MM-$20MM to implement a new value-added service project (on-bus brochures). With plenty of cash on
FY $ 1.81 A $ 2.03 $ 2.38 E $ 2.30 $ 2.55 E its balance sheet, management mentioned that the board is considering various options to maximize
P/ E 5.9 x 4 .5x 4 .2 x shareholder’s value, weighing alternatives such as a share buyback, dividend distribution, and investment
into future expansion.
EB IT D A ( A d just ed ; see mo d el)
Q1 M ar $ 11.3 A $ 25.2 $ 25.3 A $ 31.9 $ 35.7 E
FY10 guidance appears conservative. Management expressed confidence in continuing to expand its
Q2 Jun $ 11.9 A $ 29.5 $ 39.2 A $ 36.1 $ 40.2 E network while keeping concession fees stable. However, management also cited uncertainty in China’s
Q3 Sep $ 16.3 A $ 29.8 $ 30.8 E $ 41.9 $ 46.1 E economic outlook in 2H and potential increases in costs of new projects as a basis for prudence. Therefore,
Q4 Dec $ 20.4 A $ 30.2 $ 31.5 E $ 45.0 $ 49.0 E
despite an impressive Q2, the company reaffirmed its prior FY10 guidance of $82MM-$85MM in adjusted net
FY $ 59.9 A $ 114.7 $ 126.9 E $ 154.9 $ 171.0 E
income (excluding acquisitions and non-cash charges), which we view as conservative.
EV / EB IT D A 4 .1x 1.9 x 1.4 x
Raising estimates. We maintained our ’10 and ’11 revenue projection at $211MM (120% YoY) and
$288MM (36% YoY), respectively. We increased our gross margin assumption from 59% to approximately
64%-65% for the next six quarters, on increased revenue from higher margin airport buses. This is below the
roughly 70% gross margin management is projecting. We remain conservative considering potential cost
increases associated with new concession rights contracts with new bus operators, lump sum payments for
acquisitions, and renewal of existing contracts when they start to expire in ’11. Our ‘10 net income estimate
was increased from $83MM to $92MM based on the upside in Q2 and a higher gross margin, and our ’10
EPS estimate was raised from $2.03 to $2.38. We also increased our ’11 net income estimate from $113MM
to $126MM, and our ’11 EPS estimate from $2.30 to $2.55.
Reiterate Buy rating and increasing price target to $21. We expect CCME’s impressive growth
momentum to continue in 2H10 and 2011, as the company expands its network and explores value added
services and new strategic initiatives. Shares are trading at just 4.5x our updated ‘10 EPS estimate, which
we believe is considerably undervalued given an average forward P/E of 20x and median P/E of 10x in the
peer group. We reiterate our Buy rating and raise our price target from $18 to $21, which reflects a 9x P/E
multiple based on our updated ‘10 EPS estimate of $2.38.
Company Description: China MediaExpress provides TV advertising network on inter-city express buses
and airport buses in China.
SEE ANALYST CERTIFICATION AND OTHER IMPORTANT DISCLOSURES AT THE END OF THIS REPORT
 China MediaExpress Holdings, Inc. (Nasdaq:CCME) Financial Model
Global Hunter Securities, LLC

China MediaExpress Holdings, Inc. (CCME)

Global Hunter Securities, LLC
Research Department: 949-274-8052

Fiscal period FY'06 (A) FY'07(A) FY '08(A) Q1 '09(A) Q2 '09(A) Q3 '09(A) Q4 '09(A) FY '09(A) Q1 '10(A) Q2 '10(A) Q3 '10(E) Q4 '10(E) FY '10(E) Q1 '11(E) Q2 '11(E) Q3 '11(E) Q4 '11(E) FY '11(E)
Period ends Dec '06 Dec '07 Dec '08 Mar '09 Jun '09 Sep '09 Dec '09 Dec '09 Mar '10 Jun '10 Sep '10 Dec '10 Dec '10 Mar '11 Jun '11 Sep '11 Dec '11 Dec '11
Income Statement (U.S.$000s)
Total revenue from inter-city buses 4,035 25,837 62,999 18,769 19,092 26,122 31,951 95,934 37,525 40,411 42,200 43,600 163,736 45,900 54,700 61,220 65,200 227,020
Revenue from airport buses - - - - - - - - 7,000 13,100 13,500 13,700 47,300 14,200 15,200 16,500 17,500 63,400
Total revenue 44,525 53511 55,700 57,300 211,036 60,100 67,600 77,720 82,700 288,120
Revenue 4,035 25,837 62,999 18,769 19,092 26,122 31,951 95,934 44,525 53,511 55,700 57,300 211,036 60,100 67,600 77,720 82,700 288,120
Cost Of Goods Sold 1,446 12,427 23,002 7,133 7,229 8,630 6,736 29,728 17,931 11,398 20,331 20,628 70,288 21,035 23,660 27,202 28,945 100,842
Gross Profit 2,589 13,410 39,997 11,636 11,863 17,492 25,215 66,206 26,594 42,113 35,370 36,672 140,749 39,065 43,940 50,518 53,755 187,278
Selling General & Admin Exp. 916 1,657 2,813 1,101 778 1,959 2,516 6,354 2,353 3,815 5,500 6,100 17,768 4,300 4,732 5,440 5,789 20,261
Other Operating Expense/(Income) 87 737 2,063 - - - 3,209 3,209 - - - - - - - - - -
Operating Expenses 1,003 2,394 4,876 1,101 778 1,959 5,725 9,563 2,353 3,815 5,500 6,100 17,768 4,300 4,732 5,440 5,789 20,261
Operating Income 1,586 11,016 35,121 10,535 11,085 15,533 19,490 56,643 24,241 38,298 29,870 30,572 122,981 34,765 39,208 45,078 47,966 167,017
Interest Expense - - - - - - - - - - - - - - - - -
Interest and Invest. Income 8 24 100 22 21 27 43 113 61 84 90 90 325 100 100 100 100 400
Net Interest Income (Exp) 8 24 100 22 21 27 43 113 61 100 100 100 361 100 100 100 100 400
EBT 1,594 11,040 35,221 10,557 11,106 15,560 19,533 56,756 24,302 38,398 29,970 30,672 123,342 34,865 39,308 45,178 48,066 167,417
Income Tax Expense 689 4,073 8,854 3,102 2,825 3,896 5,222 15,045 6,160 9,878 7,492 7,668 31,198 8,716 9,827 11,294 12,017 41,854
Net Income 905 6,967 26,367 7,455 8,281 11,664 14,311 41,711 18,142 28,520 22,477 23,004 92,143 26,149 29,481 33,883 36,050 125,562
Tax rate 43.2% 36.9% 25.1% 29.4% 25.4% 25.0% 26.7% 26.5% 25.3% 25.7% 25.0% 25.0% 25.3% 25.0% 25.0% 25.0% 25.0% 25.0%

Basic EPS NA 0.33 1.26 0.36 0.40 0.56 0.61 1.93 0.58 0.86 0.64 0.48 2.50 0.55 0.62 0.71 0.66 2.55
Diluted EPS NA 0.33 1.26 0.36 0.40 0.56 0.49 1.81 0.54 0.80 0.59 0.48 2.38 0.55 0.62 0.71 0.66 2.55

Weighted Avg. Basic Shares Out. NA 20,915 20,915 20,915 20,915 20,915 23,542 21,588 31,275 33,290 35,288 47,545 36,850 47,600 47,600 47,600 54,545 49,336
Weighted Avg. Diluted Shares Out. NA 20,915 20,915 20,915 20,915 20,915 29,137 22,998 33,500 35,831 37,828 47,545 38,676 47,600 47,600 47,600 54,545 49,336
Equity Research

Company Update
Margins
GAAP gross margin 64.2% 51.9% 63.5% 62.0% 62.1% 67.0% 78.9% 69.0% 59.7% 78.7% 63.5% 64.0% 66.7% 65.0% 65.0% 65.0% 65.0% 65.0%
Sales, General and Administrative 22.7% 6.4% 4.5% 5.9% 4.1% 7.5% 7.9% 6.6% 5.3% 7.1% 9.9% 10.6% 8.4% 7.2% 7.0% 7.0% 7.0% 7.0%
GAAP operating margin 39.3% 42.6% 55.7% 56.1% 58.1% 59.5% 61.0% 59.0% 54.4% 71.6% 53.6% 53.4% 58.3% 57.8% 58.0% 58.0% 58.0% 58.0%
Net income margin 22.4% 27.0% 41.9% 39.7% 43.4% 44.7% 44.8% 43.5% 40.7% 53.3% 40.4% 40.1% 43.7% 43.5% 43.6% 43.6% 43.6% 43.6%
Adjusted EBITDA margin 42.6% 46.9% 60.3% 60.2% 62.2% 62.6% 63.7% 62.4% 56.9% 73.3% 55.3% 55.0% 60.1% 59.5% 59.4% 59.3% 59.2% 59.3%

Growth Y/Y
Revenue N/A 540.3% 143.8% 24.3% 24.3% 65.5% 90.6% 52.3% 137.2% 180.3% 113.2% 79.3% 120.0% 35.0% 26.3% 39.5% 44.3% 36.5%
Gross profit N/A 418.0% 198.3% 25.8% 27.6% 87.6% 108.0% 65.5% 128.5% 255.0% 102.2% 45.4% 112.6% 46.9% 4.3% 42.8% 46.6% 33.1%
Operating income N/A 594.6% 218.8% 23.3% 29.4% 83.0% 104.7% 61.3% 130.1% 245.5% 92.3% 56.9% 117.1% 43.4% 2.4% 50.9% 56.9% 35.8%
Net income N/A 669.8% 278.5% 15.9% 29.4% 83.3% 99.6% 58.2% 143.4% 244.4% 92.7% 60.7% 120.9% 44.1% 3.4% 50.7% 56.7% 36.3%
Adjusted EBITDA N/A 547.7% 200.7% N/A N/A 76.7% 102.2% 57.6% 124.1% 230.6% 88.6% 54.8% 112.0% 41.2% 2.4% 49.5% 55.3% 34.7%
EPS N/A N/A 278.5% N/A N/A N/A 43.3% 43.9% 51.9% 100.9% 6.5% -1.5% 31.3% 1.4% -22.1% 19.9% 36.7% 6.9%

Growth Q/Q (sequential)

Revenue 11.9% 1.7% 36.8% 22.3% 39.4% 20.2% 4.1% 2.9% 4.9% 12.5% 15.0% 6.4%
Gross profit -4.0% 2.0% 47.5% 44.2% 5.5% 58.4% -16.0% 3.7% 6.5% 12.5% 15.0% 6.4%
Operating income 10.6% 5.2% 40.1% 25.5% 24.4% 58.0% -22.0% 2.4% 13.7% 12.8% 15.0% 6.4%
Net income 4.0% 11.1% 40.9% 22.7% 26.8% 57.2% -21.2% 2.3% 13.7% 12.7% 14.9% 6.4%
Adjusted EBITDA 12.1% 5.1% 37.7% 24.6% 24.3% 55.0% -21.5% 2.3% 13.3% 12.5% 14.6% 6.3%
EPS 4.0% N/A N/A N/A 10.3% 46.9% -25.3% -18.6% 13.6% 12.7% 14.9% -7.2%

August 16, 2010

Page 2
Global Hunter Securities, LLC China MediaExpress Holdings, Inc. (Nasdaq:CCME) Financial Model

China MediaExpress Holdings, Inc. (CCME)

Global Hunter Securities, LLC
Research Department: 949-274-8052

Fiscal period FY'06 (A) FY'07(A) FY '08(A) Q1 '09(A) Q2 '09(A) Q3 '09(A) Q4 '09(A) FY '09(A) Q1 '10(A) Q2 '10(A) Q3 '10(E) Q4 '10(E) FY '10(E) Q1 '11(E) Q2 '11(E) Q3 '11(E) Q4 '11(E) FY '11(E)
Period ends Dec '06 Dec '07 Dec '08 Mar '09 Jun '09 Sep '09 Dec '09 Dec '09 Mar '10 Jun '10 Sep '10 Dec '10 Dec '10 Mar '11 Jun '11 Sep '11 Dec '11 Dec '11
Selected Cash Flow Items
EBIT (GAAP) 1,586 11,016 35,121 10,535 11,085 15,533 19,490 56,643 24,241 38,298 29,870 30,572 122,981 34,765 39,208 45,078 47,966 167,017
Depreciation and amortization 365 1,621 2,875 760 783 808 875 3,226 1,072 940 950 960 3,922 970 980 990 1,000 3,940
Adjusted EBITDA 1,951 12,637 37,996 11,295 11,868 16,341 20,365 59,869 25,313 39,238 30,820 31,532 126,903 35,735 40,188 46,068 48,966 170,957
Cash flow from operation (CFFO) 1,717 12,105 27,396 8,495 9,197 12,172 16,380 46,244 12,946 25,264 19,077 19,654 76,941 22,829 26,181 30,633 32,850 112,492
Capital expenditures (800) (6,600) (4,200) (500) (200) (800) (500) (1,900) (1,875) (645) (5,000) (5,000) (12,520) (3,750) (3,750) (3,750) (3,750) (15,000)
FCF (CFFO - capital expenditure) 917 5,505 23,196 7,995 8,997 11,372 15,880 44,344 11,071 24,619 14,077 14,654 64,421 19,079 22,431 26,883 29,100 97,492

Selected Balance Sheet Items

Cash and equivalent 1,485 6,364 29,997 20,416 29,437 40,855 57,151 57,151 114,396 139,321 155,560 173,012 173,012 194,321 216,378 242,810 272,261 272,261
Accounts receivable 186 2,716 6,065 7,288 7,412 11,293 12,569 12,569 18,805 20,664 24,484 25,187 25,187 26,418 29,714 34,163 36,352 36,352
Restricted cash 3 13 59 35 36 26 251 251 1,929 3,372 3,541 3,718 3,718 3,904 4,099 4,304 4,519 4,519
Total current assets 1,674 9,093 36,121 27,739 36,885 52,174 69,971 69,971 135,130 163,357 183,584 201,916 201,916 224,642 250,191 281,276 313,131 313,131
Property plant and equipement (Net) 3,269 8,848 11,417 10,910 10,137 10,864 11,065 11,065 11,525 12,018 15,233 19,273 19,273 22,053 25,793 28,563 32,293 32,293
Total assets 4,943 18,707 49,116 40,309 48,775 64,948 82,979 82,979 157,311 188,655 212,761 235,830 235,830 262,068 292,126 326,788 363,221 363,221
Accounts payables 87 769 1,565 1,782 1,800 2,030 2,179 2,179 2,571 2,839 4,468 4,534 4,534 4,623 5,200 5,978 6,362 6,362
Accrued expenses 248 714 1,230 1,380 1,378 2,672 4,573 4,573 6,801 6,505 6,505 6,505 6,505 6,505 6,505 6,505 6,505 6,505
Short term borrowings - - - - - - 10,000 10,000 - - - - - - - - - -
Tax payables 341 1,854 3,072 3,700 3,426 4,567 5,765 5,765 8,333 9,980 9,980 9,980 9,980 9,980 9,980 9,980 9,980 9,980
Other current liabilities 2,654 4,690 1,941 1,974 2,043 3,336 6,091 6,091 4,943 7,989 7,989 7,989 7,989 7,989 7,989 7,989 7,989 7,989
Total current liabilities 3,330 8,027 7,808 8,836 8,647 12,605 28,608 28,608 22,648 27,313 28,942 29,008 29,008 29,097 29,674 30,452 30,836 30,836
Convertible perferred stock - - - - - - - - 22,095 22,095 22,095 22,095 22,095 22,095 22,095 22,095 22,095 22,095
Total common equity 1,613 7,617 34,996 24,831 33,115 44,805 47,732 47,732 99,958 128,855 151,332 174,336 174,336 200,484 229,965 263,849 299,898 299,898
Total Equity 1,613 7,617 34,996 24,831 33,115 44,805 47,732 47,732 122,053 150,950 173,427 196,431 196,431 222,579 252,060 285,944 321,993 321,993
Total Liabilities And Equity 4,943 18,707 49,116 40,309 48,775 64,948 82,979 82,979 157,311 188,655 212,761 235,830 235,830 262,068 292,126 326,788 363,221 363,221
Equity Research

Valuation & Other Financial Information

Company Update
DSOs 17 38 35 35 35 39 36 48 38 35 40 40 40 40 40 40 40 40
Days payables outstanding 22 23 25 23 23 21 29 27 13 23 20 20 20 20 20 20 20 20

Net cash per share N/A N/A N/A N/A N/A N/A 1.6 2.1 3.4 3.9 4.1 3.6 4.5 4.1 4.5 5.1 5.0 5.5
Tangible book value per share N/A 0.3 1.6 1.1 N/A N/A 1.6 2.1 3.6 4.2 4.6 4.1 5.1 4.7 5.3 6.0 5.9 6.5
Price/Tangible book N/A 32.6 6.7 9.6 N/A N/A 6.5 5.1 2.9 2.5 2.3 2.6 2.1 2.3 2.0 1.8 1.8 1.6

EV/sales (LTM) N/A N/A N/A N/A N/A N/A 2.8 2.1 2.0 1.6 1.3 1.6 1.1 1.4 1.2 1.0 1.1 0.9
EV/EBITDA (LTM adjusted) N/A N/A N/A N/A N/A N/A 4.4 3.3 3.3 2.4 2.1 2.6 1.9 2.3 2.1 1.7 1.8 1.5
EV/unlevered earnings (LTM) N/A N/A N/A N/A N/A N/A N/A 4.8 N/A N/A 2.7 2.9 2.6 2.7 2.7 2.4 2.2 2.0

Price/earnings (LTM) N/A N/A 8.5 N/A 0.0 6.5 5.9 5.9 5.4 4.5 4.4 4.4 4.5 4.4 4.8 4.5 4.2 4.2

August 16, 2010

Page 3
China MediaExpress Holdings, Inc. (CCME) Company Update August 16, 2010

China MediaExpress Holdings, Inc. (CCME) Disclosures

Analyst Certification
I, Ping Luo, certify that the views expressed in this report accurately reflect my personal beliefs about this company and that I have
not and will not receive compensation directly or indirectly in connection with my specific recommendations or views contained in this
report.

I, Jodi Dai, certify that the views expressed in this report accurately reflect my personal beliefs about this company and that I have
not and will not receive compensation directly or indirectly in connection with my specific recommendations or views contained in this
report.

Important Disclosures
 GHS does and seeks to do business with the company covered in this research report.
 As with all employees of GHS, a portion of this analyst’s compensation is based on investment banking revenues.

Risks & Considerations

Increase in concession fees. CCME’s core strategy is expanding its network within inter-city express buses. Successful execution relies to
a large extent on its partnership with bus operators. The company signed concession rights contracts with bus operators to display
advertising programs on its buses. These contracts usually have a term of 5-8 years and allow concession fees to increase 10%-30% every
year. CCME’s future growth is dependent upon its ability to renew these contracts with existing partners or to obtain new contracts with new
operator partners. Although a majority of the contracts expire after 2015, some of these contracts start to expire at the end of 2011. The
company may not be able to renew the contracts with the bus operators or they may encounter significant increases in concession fees,
which will have a severe negative impact on the operation and profitability of the company’s business. The bus operators may set up a
bidding system which invites competition and results in significant increases in costs for CCME.
Increase in entertainment content fees. The company currently receives free entertainment content mainly from Fujian Southeastern TV
and Hunan Satellite TV. The agreement with Hunan Satellite TV expires in August 2010, and the agreement with Fujian Southeastern TV
expires in 2015. If CCME could not renew the agreements or the two TV stations decide to charge CCME for the content, the profitability of
the company could be negatively impacted or the company may have to look for alternative ways to obtain entertainment content.
Increased competition. CCME does not currently have significant competition for inter-city express buses, however, as mentioned, if bus
operators open up a bidding system, it could attract domestic and foreign media companies with strong financial resources and better
technologies to compete. Cost controls and technology improvement are essential to CCME’s business. CCME also faces indirect
competition from more traditional advertising channels, such as TV and newspaper advertising, and other out-of-home advertising platforms
such as airports and public mass transit systems. CCME’s clients typically advertise through many different platforms in order to reach a
broad range of consumers. The company competes for its clients’ advertising dollars with other media platforms.
Technology obsolete. The company currently operates its advertising program with digital TV screens and hard disk drives and changes
the programs manually once or twice a month. Continued technology improvement is important to retaining current advertisers and bus
operator relationships. If a competitor presents more sophisticated technologies which increase the effectiveness of advertising and better
enhance passengers’ travel experience, advertisers and bus operators may opt to work with that competitor.
Execution risks. The company plans to expand to new geographic regions and introduce new services to its advertiser clients such as
publishing on-bus magazines to promote its clients’ products and services and setting up call centers to take orders on behalf of advertisers.
The company may incur unexpected challenges in these new regions as well as new business initiatives.
Regulatory risks. CCME is subject to a series of advertising regulations to ensure that the content of the advertisements is fair, accurate
and in full compliance with applicable laws. Violation of these regulations may result in penalties including fines and orders to cease
business. In addition, China has been deregulating its advertising market, allowing foreign companies to operate in China’s advertising
industry. Continued deregulation may expose CCME to competition with more multi-national advertising companies with significantly greater
resources.
A VIE structure. CCME does not have equity ownership but relies on contractual arrangements to control its key operating subsidiary
Fujian Fenzhong Media, which operates as a variable interest entity (VIE). Though the possibility is remote, if Chinese government changes
its policies on VIE structures, CCME may lose control of its key operating entity.
See the Company’s most recent SEC filings, including 10-Ks, 10-Qs, 8-Ks and proxy filings, for additional risks and
considerations.

Other Companies Mentioned In This Report

 None

Global Hunter Securities, LLC Equity Research Page 4

China MediaExpress Holdings, Inc. (CCME) Company Update August 16, 2010

China MediaExpress Holdings, Inc. (CCME) Disclosures (Continued)

Historical Recommendations
$16.00

$14.00

$12.00

$10.00

$8.00

$6.00

$4.00

$2.00

$0.00
10/15/09
10/22/09
10/29/09
11/5/09
11/12/09
11/19/09
11/26/09
12/3/09
12/10/09
12/17/09
12/24/09
12/31/09
1/7/10
1/14/10
1/21/10
1/28/10
2/4/10
2/11/10
2/18/10
2/25/10
3/4/10
3/11/10
3/18/10
3/25/10
4/1/10
4/8/10
4/15/10
4/22/10
4/29/10
5/6/10
5/13/10
5/20/10
5/27/10
6/3/10
6/10/10
6/17/10
6/24/10
Initiated coverage on 7/1/2010 with a Buy rating and price target of $18

Date Rating Price Target Closing Price

1. 7/1/2010 Buy $18.00 $8.77
2. 8/15/2010 Buy $21.00 $10.68

Explanation of Ratings
Buy: We expect the stock to outperform the average total return of the stocks in the analyst’s industry (or industry team’s) coverage
universe over the next six to twelve months.
Neutral: We expect the stock to perform in line with the average total return of the stocks in the analyst’s industry (or industry
team’s) coverage universe over the next six to twelve months.
Sell: We expect the stock to underperform the average total return of the stocks in the analyst’s industry (or industry team’s)
coverage universe over the next six to twelve months.

Ratings Distribution
  Research Coverage Investment Banking Clients*
Rating Count % of Total Count % of Total % of Rating Category
Buy 75 66.4% 8 80.0% 10.7%
Neutral 31 27.4% 2 20.0% 6.5%
Sell 7 6.2% 0 0.0% 0.0%
Total 113 100.0% 10 100.0% 8.8%

*Investment banking clients are companies from whom GHS or an affiliate received compensation from investment banking services provided in the
last 12 months.
Note: Ratings Distribution as of June 30, 2010

Disclaimer & Other Disclosures

This material has been prepared by Global Hunter Securities, LLC ("Global Hunter") a registered broker-dealer, employing
appropriate expertise, and in the belief that it is fair and not misleading. Information, opinions or recommendations contained in the
reports and updates are submitted solely for advisory and information purposes. The information upon which this material is based
was obtained from sources believed to be reliable, but has not been independently verified. Therefore except for any obligations
under law, we do not guarantee its accuracy. Additional and supporting information is available upon request. This is not an offer or
solicitation of an offer to buy or sell any security or investment. Any opinion or estimates constitute our best judgment as of this date,
and is subject to change without notice. Global Hunter and our affiliates and their respective directors, officers and employees may
buy or sell securities mentioned herein as agent or principal for their own account. Not all products and services are available
outside of the US or in all US states. Copyright 2010.

Global Hunter Securities, LLC Equity Research Page 5