March 12, 2010

POST SPAC SPECIAL SITUATION

China MediaExpress (CCME)

CCME – Sustainable growth from a well defended niche

Key investment points Key data Current

Price (USD) 11.56
• Intriguing business: Growth driven by network expansion Short term target 20.00
from 20,000+ buses in 2009 to 30,000 buses by the end of 12 month target 28.00
2010. Advertisers are attracted to CCME’s large scale Market cap ($ mn) 457
(100+ million monthly viewers) and low CPM rates. F.d. enterprise value (EV) 336
CCME’s CPM rates should not suffer competitive pricing F.d. shares outstanding (mn) 39.6
pressures due to its well protected niche, leading 32% Public float 10.1
market share and large discount to its peers. Excellent Dec 31 YE 2008 2009 2010 2011
cash generation with low DSO. Growth, profit margins and Revenue 63 95 143 191
cash conversion superior to all China out-of-home EBITDA 38 58 77 95
advertising public peers. Adj net income 27 41 54 66
EPS basic 0.97 1.43 1.64 2.00
• Compelling valuation: Despite these positives, CCME EPS f.d. 0.78 1.16 1.36 1.66
trades at a 69%+ discount to its direct public peers.
F.d. P/E 14.8 10.0 8.5 7.0
• Credibility no longer an issue: The primary issue EV/EBITDA 7.5 4.9 4.4 3.6
holding back a higher multiple has been credibility after a
tough SPAC IPO that raised little cash. The recent Starr EBITDA growth % 201 53 32 23
International preferred investment is validation that EBITDA margin % 60 61 54 50
CCME’s business is sound. Starr spent four months of due Med. Comp. Multiples 2009 2010
diligence before making the decision to invest $30M.
P/E 21.6 37.7
Additional actions to build credibility have been the hiring of
Deloitte and Touche auditors, repurchase of $1M public EV/EBITDA 13.3 11.2
warrants and active communication with public investors. China MediaExpress (CME) Description:
Since its inception in November 2003, CME
Valuation has grown rapidly to become China’s largest
Our short term target is $20.00 which is 14.7x FY10F P/E television advertising operator on inter-city
(12.4x P/E ex-net cash) and 8.7x 2010 EV/EBITDA. Our 12 express buses. The Company generates
month target is $28.00 which is 10.4x 2011 EV/EBITDA which revenue by selling advertisements on its
is in line with typical out-of-home advertiser forward multiples. network of television displays installed on
Our 12 month target is crossed validated with our DCF model over 21,000 express buses originating in
that generates a $28.23 valuation. fourteen of China’s most prosperous
regions, including the five municipalities of
Our forecast is conservative with net income below the Beijing, Shanghai, Guangzhou, Tianjin and
minimum net income targets set by the Starr investment Chongqing and nine economically
th
agreement. For the 4 quarter 2009 we forecast $13.2M net prosperous provinces, namely Guangdong,
income for true fully diluted EPS of $0.38. To meet the Starr Jiangsu, Fujian, Sichuan, Hebei, Anhui,
th
2009 net income target, 4 quarter net income will need to Hubei, Shandong and Shanxi which
be $14.7M which would generate fully diluted EPS of $0.42. generate more than half of China’s GDP.

Bottom line:
CCME’s well defended niche and cash rich balance sheet ($100M net cash) support a sustainable and
th
high growth outlook for its business. We expect the release of strong 4 quarter audited results and
positive guidance for 2010 to be the catalyst to move the shares towards our short term target of $20.00.

Neil Danics (858) 366-4580 MBA, CMA ndanics@spacanalytics.com

SPAC Analytics Special Situation Research

March 12, 2010 China MediaExpress (CCME)

Summary Income Statement (mn USD):

2009 Annual Forecast 2010F Annual Forecast 2011F

2007 2008 Q1 Q2 Q3 Q4F SA Starr CCME Q1 Q2 Q3 Q4 SA Starr CCME SA Starr CCME
Sales, net 25.8 63.0 18.8 19.1 26.1 31.1 95.1 104.2 31.7 33.5 36.3 41.1 142.7 196.6 191.0 305.5

Cost of sales 13.2 25.1 7.1 7.2 8.6 10.3 33.2 10.4 12.1 13.4 15.6 51.6 74.5
Gross profit 12.7 37.9 11.6 11.9 17.5 20.8 61.8 71.5 21.2 21.5 22.9 25.5 91.1 140.9 116.5 219.5

Selling expenses 0.9 1.1 0.3 0.3 1.4 1.9 3.8 2.3 2.9 3.5 5.1 13.9 20.6
G&A 0.7 1.7 0.8 0.5 0.6 1.2 3.2 1.3 1.1 1.2 1.8 5.4 8.2
Total operating exp. 1.7 2.8 1.1 0.8 2.0 3.1 7.0 3.6 4.0 4.7 6.9 19.3 28.8
Operating income 11.0 35.1 10.5 11.1 15.5 17.8 54.9 17.6 17.4 18.2 18.6 71.8 87.7
Interest income 0.0 0.1 0.0 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0
Income before taxes 11.0 35.2 10.6 11.1 15.5 17.7 54.9 60.2 17.6 17.4 18.2 18.6 71.8 119.4 87.7 186.1
Income tax 4.1 8.9 3.1 2.8 3.9 4.4 14.3 4.4 4.4 4.6 4.6 18.0 21.9
Net income 7.0 26.4 7.5 8.3 11.6 13.3 40.6 13.2 13.1 13.7 13.9 53.9 65.8
Foreign cur. Trans. 0.4 1.0 0.1 0.0 0.0 0.0 0.1 0.0 0.0 0.0 0.0 0.0 0.0
Net Income 7.3 27.4 7.4 8.3 11.6 13.2 40.5 42.0 42.1 13.2 13.1 13.7 13.9 53.9 55.0 83.6 65.8 70.0 130.3

Key metrics:
EPS - f.d. 0.21 0.78 0.21 0.24 0.33 0.38 1.16 1.20 1.17 0.33 0.33 0.35 0.35 1.36 1.39 1.76 1.66 1.77 2.39
P/E 55.3 14.8 10.0 8.5 7.0

D&A 1.6 2.9 0.8 0.8 0.8 1.0 3.4 1.0 1.2 1.4 1.6 5.2 6.9
EBITDA 12.6 38.0 11.3 11.9 16.3 18.8 58.2 65.5 18.6 18.6 19.6 20.2 77.0 128.5 94.6 197.8
EV/EBITDA 22.4 7.5 4.9 4.5 4.4 3.3 3.6 2.6

# of buses EOP 10,053 15,260 16,000 16,000 18,000 20,000 20,000 21,000 24,000 26,000 28,000 28,000 30,000 33,000
Quarterly rev. per bus 1,156 1,244 1,201 1,193 1,535 1,637 1,348 1,545 1,491 1,453 1,523 1,486 1,638 1,565
Annual growth 29% 8% 8% 10% 5%

Revenue growth 540% 276% 24% 24% 65% 86% 51% 65% 69% 76% 39% 32% 50% 34%
EBITDA growth 548% 269% 23% 28% 75% 82% 53% 72% 65% 57% 20% 7% 32% 23%
Gross margin 49% 60% 62% 62% 67% 67% 65% 69% 67% 64% 63% 62% 64% 72% 61% 72%
Selling exp % of sales 4% 2% 1% 1% 5% 6% 4% 7% 9% 10% 13% 10% 11%
Opex % of sales 6% 4% 6% 4% 8% 10% 7% 11% 12% 13% 17% 14% 15%
EBITDA margin 49% 60% 60% 62% 63% 60% 61% 63% 59% 56% 54% 49% 54% 65% 50% 65%
Tax rate 37% 25% 29% 25% 25% 25% 26% 25% 25% 25% 25% 25% 25%

Pro forma share count / EV

Basic 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9 32.9
Starr International - pref/common 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0 3.0
Earn out shares 1.0 8.0 15.0
Starr International - warrants 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5 1.5
SPAC mgmt. warrants 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1 2.1
F.d. shares 35.0 35.0 35.0 35.0 35.0 35.0 35.0 35.0 36.0 39.6 39.6 39.6 39.6 39.6 39.6 47.6 39.6 39.6 54.6
Market capitalization 405 405 405 405 405 405 405 405 416 457 457 457 457 457 457 550 457 457 631
Net debt / (cash) -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121 -121
Enterprise value (EV) 284 284 284 284 284 284 284 284 295 336 336 336 336 336 336 429 336 336 510

Assumptions / Notes:
Assumes no new acquisitions are made with $77M cash raised in Jan 2010.
Gross margins decline in 2010 and 2011 reflecting higher concession fees to bus operators offset by some degree by a greater % of direct advertising clients.
Selling expense as % of revenues increases by 6% in 2010 reflecting much larger direct sales force in 2010.
No change to RMB exchange rate in 2010 or 2011.
Net debt / (cash) includes cash from warrants redemption, net cash from the Starr Jan 2010 $30M financing, and estimated Dec 31, 2009 company net cash balance.
SA refers to SPAC Analytics forecast.
Starr refers to minimum net income targets per recent $30M Starr International preferred financing.
CCME refers to the share based net income earn out targets per the SPAC merger transaction.
Fully diluted EPS assumes all warrants and convertible preferred securities are converted into common shares.

SPAC Analytics Special Situation Research 2

March 12, 2010 China MediaExpress (CCME)

CCME should avoid pricing & margin pressure due to its dominate share and
unique cooperation agreement with the Chinese government
CCME controls over 32% of the China inter-city express bus television advertising market and by the end
of 2010 CCME should control over 45% of the market. At the end of 2009 CCME had 20,000+ buses on
its network, with 41,000+ television displays and a monthly audience of over 100 million people.
Management expects to grow CCME’s network to over 30,000 buses by the end of this year. The
estimated total market is 65,000+ buses with 27+ passengers.

CCME’s large network is highly attractive to advertisers who want to work with a supplier who has
nd rd
substantial scale to provide access to China’s growing middle class in high growth 2 and 3 tier cities.

A key factor in CCME’s success is a five year cooperation agreement it signed with the Transport
Television and Audio-Video Center, an entity affiliated with the Ministry of Transport of the People’s
Republic of China. The agreement designates CCME as the sole strategic alliance partner in the
establishment of a nationwide in-vehicle television system on buses traveling on highways in China. The
agreement gives CCME preferential status as the only authorized inter-city bus advertising company by
the government and serves as a strong tool to sign new bus operators to CCME’s network and to deter
new competitors from entering the inter-city bus advertising market. The cooperation agreement expires
in October 2012. In the unlikely case the agreement is not renewed it would obviously be a negative
development but not a disaster. The majority of CCME’s 47 bus operators have signed five to eight year
contracts in the past year and several new bus operators are expected to be signed to long term
contracts between now and the end of 2012.

Effectively with this cooperation agreement CCME has at minimum a 2.5 year window to further increase
its market share of the inter-city bus market with little competition. This reduces the pressure on CCME to
pay high concession fees to bus operators and/or reduce its CPM rates to keep business. Thus, CCME’s
business has a substantial advantage to several other China out-of-home advertising companies whose
verticals have competition which has led to margin pressures over the past year.

The quality of CCME’s advertising channel is high

CCME’s audience is highly captive since the average passenger typically sits on an express bus for over
two hours. Passengers are able to view the television screens unobstructed unlike crowded intra-city
buses and subways where line of sight can be impeded and the attention span is limited due to short
trips. The programming provided from Fujian SouthEastern Television Channel and Hunan Satellite
Television is considered entertaining and high quality. CCME displays advertisements in ten-minute
blocks after every 30 minutes of entertainment content, so audiences can potentially view the same
advertisement up to three times per average journey. This repeated exposure to the same advertisement
should increase its effectiveness. CTR Market research found that 81% of all passengers said they had
watched the television displays on CCME’s network and almost 80% said they regularly watched the
displays on the network.

CCME’s demographic is attractive despite some competitors criticizing the profile of an inter-city bus
passenger. They believe that passengers on inter-city buses have low income and are under educated.
While inter-city passengers are not as attractive as a pure urban demographic, the express bus market
demographic is still attractive with incomes above the China average. According to surveys conducted by
the CTR Market Research in July 2008, the audience of CCME’s network had the following overall
characteristics:

• the average household income is over RMB 5,800 per month and the average individual income is
over RMB 3,300 per month
• over 50% of the target audiences have received a diploma, college degree or higher education
• over 40% of the target audiences are professionals, managers, executives and business owners
• over 40% of the target audiences are frequent travelers that take inter-city express buses for more
than once a month

SPAC Analytics Special Situation Research 3

March 12, 2010 China MediaExpress (CCME)

CCME’s advertising rates are substantially lower than intra-city buses and local
television
The cost per thousand (CPM) rates that CCME charges is just 13% of equivalent intra-city bus and 2% of
local television rates despite CCME’s large network and positive attributes. CCME’s large discount to
these alternative mediums provides flexibility to raise rates with no decline in demand for its inventory
which is currently experiencing close to 100% utilization.

CCME VISN Local CME CPM % of

Inter-City Bus Intra-City Bus Television Intra-City Bus Local TV
(In RMB for every 15 seconds)
City
Shanghai 4 140 #REF! 2.6%
Guangzhou 3 17 114 #REF! 2.8%
Xiamen 3 255 #REF! 1.2%
Fuzhou 3 268 #REF! 1.0%
Nanjing 3 30 153 #REF! 1.7%
Changzhou 3 317 #REF! 0.8%
Tianjin 3 59 #REF! 4.3%
Beijing 2 26 133 #REF! 1.6%
Average 3 21 180 13% 2%

Source: CCME proxy, VisionChina Median (NASD: VISN) investor presentation (note VISN average composed of
several cities not on this list)

New embedded advertising and other factors should drive strong 2010 growth
In the third quarter of 2009 CCME launched a new embedded advertising initiative that was the driver of a
large portion of the sequential growth in the quarter. Embedded advertising allows advertisers to be the
exclusive sponsor of a specific program in return for paying a higher CPM to CCME. The advertisers gain
additional exposure from announcements that the program is sponsored by that advertiser and a banner
add is placed on the side of the screen displaying the logo of the advertiser during the broadcast of the
programs.

Additional drivers of growth in 2010 are expected to come from:

1. Advertising rate increase of 10%: Raising rates by 10% is reasonable considering CCME’s low
CPM rates and expectations for a strong advertising market as evidenced by:
o The strong November CCTV 2010 advertising auctions
o Reports that VISN and Focus Media (NASD: FMCN) have raised their rates by 10% to
20% in January
o Changes in government regulations that reduce television advertising time which has
caused local television stations to increase their rates by 20% to 30% to make up for their
lost inventory
2. Substantial increase in advertising inventory: Management’s goal is to increase the number of
buses to 30,000 by the end of 2010 for a 50% year over year increase. This appears reasonable
given the rate of new bus growth since June of 2009. For conservatism we assume 28,000 buses by
the end of 2010 in our model.
3. New acquisitions: $77M of capital was raised in the last two weeks of January from the Starr
International preferred investment and the SPAC public warrant redemption. Management expects to
deploy CCME’s excess cash of $100M+ towards acquisitions in the near future. For conservatism we
do not include the contributions from acquisitions in our financial model.

SPAC Analytics Special Situation Research 4

March 12, 2010 China MediaExpress (CCME)

Validation by Starr International and Deloitte and Touche is significant and

should lead to multiple expansion
CCME had a tough SPAC IPO in October 2009 that raised no cash. The difficulties they had coming
public raised questions about the quality of its business. The recently completed $30 million preferred
financing by Starr International reduces these concerns since Starr conducted due diligence that most
investors are not able to do. Before committing to invest $30 million in CCME, Starr conducted a four
month due diligence of CCME that involved several third party cross checks of CCME’s operations
including an independent audit of the financials and verification of CCME’s commercial contracts. Starr
International is a private equity firm that is chaired by Hank Greenburg, the former CEO of AIG. On
average, Starr has invested $100M in three to four companies per year in China.

We expect a further boost to credibility when CCME reports its 2009 results audited by newly hired
Deloitte and Touche.

Financial analysis
Our model is conservative with net income below the minimum targets set by the Starr investment
agreement and the performance share earn outs. Our forecast for 2010 and 2011 assumes 5% to 10%
rate increases and a decrease in CCME’s profit margins as we expect CCME to increase its SG&A
expenses and increase the concession fees it pays to the bus operators on its network.

2007A 2008A 2009F 2010F 2011F

SPAC Analytics Forecast
Revenue (mn USD) 25.8 63.0 95.1 142.7 191.0
EBITDA 12.6 38.0 58.2 77.0 94.6
Net income 7.0 26.4 40.5 53.9 65.8

Fully diluted EPS 0.21 0.78 1.16 1.36 1.66

Gross profit margin 49% 60% 65% 64% 61%
Sales expense % of revenue 4% 2% 4% 10% 11%
EBITDA margin 49% 60% 61% 54% 50%
# of buses 10,053 15,260 20,000 28,000 33,000
Avg. quarterly revenue per bus 1,156 1,244 1,348 1,486 1,565
Annual growth 29% 8% 8% 10% 5%
Capex (mn USD) 6.6 4.2 6.0 28.7 10.0

Starr Minimum Net Income Targets

Net income (mn USD) 42.0 55.0 70.0
Fully diluted EPS 1.20 1.39 1.77

Earn Out Share Guidance

Revenue (mn USD) 104.2 196.6 305.5
EBITDA 65.5 128.5 197.8
Net income 42.1 83.6 130.3
Fully diluted EPS 1.17 1.76 2.39

Earn out shares to be issued (mn) 1.0 7.0 7.0

We assume a large capital outlay in 2010 as management expands the network by 10,000 buses and
retrofits the existing buses and stations network to an automated process from a manual process. We
estimate the cost of this program to be $28.7 million ($1,000 per new bus + $100 retro fit of existing buses
+ $150K per new station) which can be funded from the current estimated net cash balance of $100M as
well as cash flow from operations.

SPAC Analytics Special Situation Research 5

March 12, 2010 China MediaExpress (CCME)

There is upside to our 2010 forecast if accretive acquisitions are made and if operations perform better
than we have conservatively modeled. We believe that $60M+ net income (f.d. EPS of $1.52+) is
probable for 2010 based on current growth rates and margins and the high likelihood of accretive
acquisitions in the next few months. However, for conservatism we maintain our forecast until we gain
better clarity on these events occurring.

CCME has excellent cash conversion

In a country and an industry notorious for long outstanding receivables, CCME is a stand out with very
fast cash conversion. CCME obtains fast 30 day payment terms from its advertising agency clients in
return for providing its inventory at much lower CPMs than equivalent television. CCME has a limited
number of advertising agency clients that make up the majority of its revenue which makes it easier to
manage its receivables. In 2008, its top 20 advertising agencies accounted for 98% of its revenue.
CCME plans to increase the proportion of direct advertising clients to 40% of revenues in 2010 in order to
boost profit margins. By the end of 2010 CCME expects to increase the size of its sales force sales to
300+ from 90 headcount at the end of 2009. We expect CCME’s collection times to decrease as the
percentage of revenue from direct advertising clients increases.

DSO comparison: Out-of-home advertisers

CCME FMCN VISN AMCN LAMR DEC FP CCO

Outdoor advertising channels Buses inter-city Elevators Intra-city buses Airports Billboards Billboards Billboards
LED billboards Subways Gas stations Bus shelters Street Airports
LED displays in store furniture Malls
2009 Days receivables and office Airports Taxis
Period 30-Sep-09 30-Sep-09 31-Dec-09 31-Dec-09 31-Dec-09 31-Dec-09 30-Sep-09
A/R 15 222 37 49 143 601 738
Revenue 95 498 121 149 1056 1919 1935
Days receivables 43 122 112 121 49 114 104

Source: company filings

The only peer that has similar DSO’s is Lamar Advertising (NASD: LAMR).

SPAC Analytics Special Situation Research 6

March 12, 2010 China MediaExpress (CCME)

DCF valuation of $28.23

Our DCF estimate of $28.23 is based on a 2.5% terminal growth rate and a 15.0% WACC which is
derived from a blended peer average beta of 1.30, equity risk premium of 6.0% and a risk free rate of
5.56%.

The $28.23 valuation supports our $28.00 12 month target which is 15.0x FY11F ex-net cash P/E and
10.4x 2011 EV/EBITDA which are in line with the typical one year forward multiples of China and Western
out-of-home advertisers.

Discounted Cash Flow (2010 - 2018)

Dec-08 Dec-09 Dec-10 Dec-11 Dec-12 Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18

Revenue 63.0 95.1 142.7 191.0 236.8 281.8 326.9 372.7 417.4 463.3 509.6
Net change 37.2 32.1 47.6 48.3 45.8 45.0 45.1 45.8 44.7 45.9 46.3
Revenue growth 143.8% 50.9% 50.1% 33.9% 24.0% 19.0% 16.0% 14.0% 12.0% 11.0% 10.0%
EBITDA margin 60.3% 61.2% 54.0% 49.5% 48.0% 47.0% 46.0% 45.0% 44.0% 43.0% 42.0%

EBITDA 38.0 58.2 77.0 94.6 113.7 132.5 150.4 167.7 183.7 199.2 214.0
Less: D&A (2.9) (3.4) (5.2) (6.9) (8.9) (10.9) (12.9) (14.9) (16.9) (18.9) (20.9)
EBIT 35.1 54.9 71.8 87.7 104.8 121.6 137.5 152.8 166.8 180.3 193.1
Unlevered Taxes 25.0% (8.9) (14.3) (18.0) (21.9) (26.2) (30.4) (34.4) (38.2) (41.7) (45.1) (48.3)
After Tax Earnings 26.3 40.6 53.9 65.8 78.6 91.2 103.1 114.6 125.1 135.2 144.9

Add back: D&A 2.9 3.4 5.2 6.9 8.9 10.9 12.9 14.9 16.9 18.9 20.9
Less: Capex (4.2) (6.0) (28.7) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0) (10.0)
Free cash flow 24.9 38.0 30.3 62.7 77.5 92.1 106.0 119.5 132.0 144.1 155.8

Terminal Growth 2.5%

Discount Rate 13.0% 14.0% 15.0% 16.0% 17.0%

DCF
Sum of PV 411.3 394.4 378.0 363.4 349.2
Terminal Value 805.1 703.4 617.4 549.3 490.0
Enterprise Value 1,216.5 1,097.9 995.5 912.7 839.1
Net Debt / (Cash) (121.0) (121.0) (121.0) (121.0) (121.0)
Equity Value - fully diluted 1,337.5 1,218.9 1,116.5 1,033.7 960.2

Share price target - true fully diluted 33.81 30.82 28.23 26.13 24.27

WACC 15.0% Risk free rate 5.56% 30 year t-bill + 1%

Cost of debt 12.0% Equity risk premium 6.0%
Cost of equity 15.0% Beta 1.30 Average of FMCN, VISN and AMCN
Debt/equity 0.0%

SPAC Analytics Special Situation Research 7

March 12, 2010 China MediaExpress (CCME)

Comparable analysis – CCME is much cheaper than its peers

Adj EBITDA EV/EBITDA EBITDA Margin F.D PE
Price EV* 2009 2010 2009 2010 2009 2010 2009 2010
Chinese Out-of-Home Advertisers
VISN - VisinChina Media 4.77 442 32 16 13.8 28.3 26% 10% 10.9 207.4
AMCN - AirMedia 7.18 373 -21 21 17.8 9% 87.6
IDI - SearchMedia 5.52 114 33 37 3.4 3.0 37% 38% 10.0 7.7
FMCN - Focus Media 16.43 1,741 17 170 101.2 10.3 3% 28% 32.3 20.5
Average 39.5 14.9 22% 21% 17.7 80.8
Median 13.8 14.1 26% 19% 10.9 54.0
Western Out-of-Home Advertisers
LAMR - Lamar 34.32 5,709 443 464 12.9 12.3 42% 42%
CCO - Clear Channel 11.85 6,479 529 618 12.3 10.5 20% 22%
DEC FP - JC Decaux 19.42 4,960 349 445 14.2 11.2 18% 21% 104.4 37.7
Average 13.1 11.3 27% 29%
Median 12.9 11.2 20% 22%
All Out-of-Home Advertisers
Average 26.3 13.3 24% 24% 39.4 72.2
Median 13.3 11.2 23% 22% 21.6 37.7

CCME - C hina MediaExpress 11.56 336 58 77 5.8 4.4 61% 54% 10.0 8.5
% discount to median -69% -84%
* Adj EV includes future estimated cash and stock commitments for acquisitions.

Source: Bloomberg and SA Estimates

CCME trades at a substantial 69%+ discount to its China and Western peers on an EV/EBITDA and PE
basis. FMCN is the best Chinese comparable since its operations are the most stable. VISN and IDI are
currently working through operational issues while AMCN’s high 2010 multiple is in anticipation of a much
stronger 2011. A key point of differentiation is that CCME does not have any acquisition related earnout
payment commitments. This eliminates the risk of a drop in revenues after the earnout period expires as
occurred with VISN and FMCN.

Valuation grid - $20.00 short term target is a discount to peer multiples

Share F.D EV/EBITDA F.D EPS F.D. PE
Price EV 2009 2010 2009 2010 2009 2010 Comments
10.00 275 4.7 3.6 1.16 1.36 8.6 7.3
11.00 314 5.4 4.1 1.16 1.36 9.5 8.1
11.56 336 5.8 4.4 1.16 1.36 10.0 8.5 CCME price Mar 12, 2010
12.00 354 6.1 4.6 1.16 1.36 10.4 8.8
13.00 393 6.8 5.1 1.16 1.36 11.2 9.5
14.00 433 7.4 5.6 1.16 1.36 12.1 10.3
15.00 472 8.1 6.1 1.16 1.36 13.0 11.0
16.00 512 8.8 6.6 1.16 1.36 13.8 11.8
17.00 551 9.5 7.2 1.16 1.36 14.7 12.5
18.00 591 10.1 7.7 1.16 1.36 15.5 13.2
19.00 631 10.8 8.2 1.16 1.36 16.4 14.0
20.00 670 11.5 8.7 1.16 1.36 17.3 14.7 $20.00 short term target
24.90 864 14.8 11.2 1.16 1.36 21.5 18.3 $24.90 in line with peer 2010 EV/EBITDA
28.00 986 16.9 12.8 1.16 1.36 24.2 20.6 $28.00 12 month target
28.23 996 17.1 12.9 1.16 1.36 24.4 20.7 $28.23 DCF valuation
Peer median multiple 13.3 11.2
CCME EBITDA mn USD 58.2 77.0
CCME net income mn USD 40.5 53.9

CCME should trade at $24.90 to be in line with its peer median 2010 EV/EBITDA multiple. Thus our short
term $20.00 target is conservative.

SPAC Analytics Special Situation Research 8

March 12, 2010 China MediaExpress (CCME)

Technical Analysis

Source: Bloomberg

CCME has traded in a band between $10.00 to $14.00 since November. CCME briefly traded above
$14.00 after the announcement of the Starr International $30M investment but subsequently traded lower
with the weaker Chinese markets and additional selling pressure due to the warrant redemptions that
ended at the end of January.

We expect CCME to trade towards $20.00 if CCME closes above $14.00 ideally with positive
fundamental news. A close below $10.00 is a bear signal.

Timeline Catalyst
March 16 Roth Capital annual OC Growth Stock Conference in Laguna Niguel, California
March 23 Q4 audited results and 2010 guidance
Anytime New acquisitions
Anytime New bus operators added to the network

SPAC Analytics Special Situation Research 9

March 12, 2010 China MediaExpress (CCME)

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SPAC Analytics Special Situation Research 10