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Global Hunter Securities, LLC October 15, 2010

Dallas/Fort Worth ♦ Houston ♦ Los Angeles ♦ New York Company Update


Newport Beach ♦ New Orleans ♦ San Francisco China: China Industrial Consumer and Clean Technology
New York Sales & Trading: (212) 415-4721
Newport Beach Sales & Trading: (949) 274-8050 Ping Luo, CFA
Research: (949) 274-8052 pluo@ghsecurities.com
www.ghsecurities.com 646-264-5688
Jodi Dai
jdai@ghsecurities.com
646-264-5666

Rating: Buy China MediaExpress Holdings, Inc.


Price Target: $21.00 (Nasdaq: CCME)
Price Target Metrics: 9x P/E (2010) Our extensive due diligence reinforces our thesis; Reiterate Buy.
Current Price: $14.02 Summary:
During our recent trip to China, we conducted extensive due diligence and channel checks on CCME’s
Float: 10.0MM
business. We met with the company's entire management team including six regional managers,
Diluted Shares: 35.8MM checked CCME’s sales contracts and bank statements, and interviewed advertising agencies, direct
Short Interest: 4.4MM advertisers and bus operators. We took buses in Beijing, Fuzhou and Guangzhou to view the
Average Daily Volume: 897k company’s operation and advertising programs. In addition, we met with a representative from CTR,
a market research firm, and two directors at Starr International. Our due diligence results reinforce
52 Week Range: $7.51 - $14.82
our thesis on the company and we continue to believe that CCME is a leader in its niche market. We
Market Cap: $502MM believe the fundamentals of the business remain solid. Thus, we reiterate our Buy rating.
Cash and Investments: $139MM
Highlights
Debt: $0MM
Enterprise Value: $363MM Interviews with advertising customers. CCME works with ~30 ad agencies who contribute ~70% of
total revenue, with the remaining 30% from direct advertisers. We interviewed a number of ad agencies
Net Cash/Sh: $3.89
and direct advertisers, including agencies which purchase advertising time in Beijing and Guangzhou
PRICE & VOLUME CHART airports. The revenue amount these agencies disclosed to us matched that in the sales contracts and the
16.00 4.00 customer list and revenue breakdown presented by CCME. These customers represent annual contract
14.00 3.50 value of approximately RMB400MM ($60MM), or ~30% of our estimated ‘10 revenue. The agencies
receive business either directly from brands or from 4As or other large advertising agencies. These
12.00 3.00
10.00 2.50
8.00 2.00 advertisers stated that CCME’s large network and quality customer service make it the top choice in
6.00
4.00
1.50
1.00
the inter-city bus market.
2.00 0.50
Interviews with bus operators. CCME’s network currently covers over 60 bus operators and close to
0.00 0.00
25,000 buses. The bus operators we interviewed ran a total of 4,000 buses. They receive concession
11- 2009

12- 2009

01- 2010

02- 2010

03- 2010

04- 2010

05- 2010

06- 2010

07- 2010

08- 2010

09- 2010

10- 2010

Pr Vol
fees ranging between RMB600 and RMB1,500 per bus per month, which we view as considerably low
as compared to its peers in other outdoor media markets. We believe the low cost is due to a lack
ESTIMATES $ (MMs except multiples & EPS) of major competitors in this niche market as well as weak bargaining power from bus operators who
2009 2010 2011
operate in a highly fragmented market. Concession fees typically account for 70%+ of COGS of a media
Revenue
Q1 (Mar) $18.8A $44.5A $60.1E company. Continuing to control concession fees is a key task for a media company. We believe this low
Q2 (Jun) $19.1A $53.5A $67.6E level of concession charges explains CCME’s high margin profile.
Q3 (Sep) $26.1A $55.7E $77.7E Taking the rides. We took CCME’s buses in Beijing, Fuzhou and Guangzhou to view its operation
Q4 (Dec) $32.0A $57.3E $82.7E
and programs. The programs were rotated with 30 minutes of entertainment content and 10 minutes of
FY $95.9A $211.0E $288.1E
advertisements. We saw brands including multinational names such as Pepsi-Cola, P&G, Coca-Cola,
EV/Sales 3.8x 1.7x 1.3x
Siemens, and Samsung, and well-known domestic brands such as China Mobile, China Post, Wanglaoji
EPS (GAAP) Beverage, Tongyi Green Tea, Huangjin Dadang Nutrition and Yili Dairy, among others. Bus operators
Q1 (Mar) $0.36A $0.54A $0.55E expressed favorable feedback from passengers; we believe the availability of various entertainment
Q2 (Jun) $0.40A $0.80A $0.62E content makes passengers more receptive to advertising programs.
Q3 (Sep) $0.56A $0.59E $0.71E
Meeting regional managers. We met with regional managers in charge of sales and customer service
Q4 (Dec) $0.49A $0.48E $0.66E
FY $1.81A $2.38E $2.55E
in Beijing, Guangdong, Sichuan, Jiangsu, Hubei and Fujian. We cross checked with them the number
P/E 7.7x 5.9x 5.5x
of buses, top agency customers and total revenues in each region. Currently there are ~30 people in
each region who provide customer service to existing customers and develop new local customers (esp.
EBITDAS direct advertisers) in the region.
Q1 (Mar) $11.3A $25.3A $35.7E
Visit to Starr International. We visited Starr’s Shanghai office and met with directors who stated
Q2 (Jun) $11.9A $39.2A $40.2E
they have done a thorough due diligence before their $30MM investment in January, including hiring
Q3 (Sep) $16.3A $30.8E $46.1E
Q4 (Dec) $20.4A $31.5E $49.0E
ACNielsen to conduct due diligence and market research, and Deloitte to audit CCME’s financials. They
FY $59.9A $126.9E $171.0E indicated that they monitored CCME’s operation and financial results on a monthly basis and continued
EV/EBITDAS 6.1x 2.9x 2.1x to believe in its fundamentals, which is further evidenced by Starr’s additional investment of $13.5MM
announced earlier this week to purchase 1.5MM common shares from early investors of the company.
Reiterate Buy. We have spent substantial time and effort in our ongoing due diligence over the last
three months, the results of which reinforced our thesis. Shares are currently trading at just 6x our ’10
EPS (or 4x after backing out $139MM or $3.89/share in net cash). We expect more positive catalysts
in the near term as the company continues to expand its network. As such, we reiterate our Buy rating
and $21 price target, which is 9x our ’10 EPS of $2.38.

Company Description: China MediaExpress provides TV advertising network on inter-city express


buses and airport express buses in China.

SEE ANALYST CERTIFICATION AND OTHER IMPORTANT DISCLOSURES AT THE END OF THIS REPORT
China MediaExpress Holdings, Inc. (CCME) Company Update October 15, 2010

China MediaExpress Holdings, Inc. (Nasdaq:CCME) Financial Model


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)
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

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%

Global Hunter Securities, LLC Equity Research Page 2


China MediaExpress Holdings, Inc. (CCME) Company Update October 15, 2010

China MediaExpress Holdings, Inc. (Nasdaq:CCME) Financial Model


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

Valuation & Other Financial Information


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 42.8 8.8 12.7 N/A N/A 8.6 6.8 3.8 3.3 3.1 3.4 2.8 3.0 2.6 2.3 2.4 2.1

EV/sales (LTM) N/A N/A N/A N/A N/A N/A 3.8 2.9 2.9 2.3 2.0 2.3 1.7 2.1 1.9 1.6 1.7 1.5
EV/EBITDA (LTM adjusted) N/A N/A N/A N/A N/A N/A 6.0 4.6 4.8 3.6 3.2 3.9 2.9 3.4 3.3 2.8 2.9 2.5
EV/unlevered earnings (LTM) N/A N/A N/A N/A N/A N/A N/A 6.6 N/A N/A 4.1 4.3 4.0 4.1 4.2 3.8 3.6 3.4

Price/earnings (LTM) N/A N/A 11.1 N/A 0.0 8.5 7.8 7.7 7.1 5.9 5.8 5.8 5.9 5.8 6.2 5.9 5.5 5.5

Global Hunter Securities, LLC Equity Research Page 3


China MediaExpress Holdings, Inc. (CCME) Company Update October 15, 2010

China MediaExpress Holdings, Inc. (CCME) Disclosures


I, Ping Luo, CFA, 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.
As with all employees of GHS, a portion of our analysts’ compensation is based on investment banking revenues.
Global Hunter Securities, LLC does and seeks to do business with the companies covered in this research report.
Risks & Considerations
Increase in concession fees. CCME’s core strategy is expanding its network within inter-city express buses. Successful execution relies at a large extent on its
partnership with bus operators. The company signed concession rights contracts with bus operators to display advertising programs on their buses. These contracts
usually have a term of 5-8 years and allow concession fee 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 majority of the contracts expires 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 agreement with Fujian Southeastern TV expires in 2015. If CCME could not renew the agreements
or the two TV stations decided to charge CCME on 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 on 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 for the inter-city bus advertising
business. Cost control and technology improvement is 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 current 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 retain current advertiser and bus operator relationship. 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 also introduce new services to its advertiser client such as publishing on-bus magazine
to promote its clients’ products and service 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.

Explanation of Ratings
Buy - The stock should be purchased aggressively at current prices. The stock is expected to trade higher on an absolute basis and be a top performer relative to
peer stocks over the next 12 months.

Global Hunter Securities, LLC Equity Research Page 4


China MediaExpress Holdings, Inc. (CCME) Company Update October 15, 2010

Accumulate - The stock should be purchased at current prices. The stock has an attractive risk/reward and is expected to outperform peer stocks over the next
12 months.
Neutral - The stock has average risk/reward and is expected to perform in line with peer stocks over the next 12 months.
Reduce - The stock should be sold at current prices. The risk/reward has become less attractive and is expected to underperform peer stocks over the next 12 months.
Sell - The stock should be sold aggressively at current prices. The stock is expected to trade lower on an absolute basis and be a top underperformer relative to
peer stocks over the next 12 months.
Ratings Distribution
Research Coverage Investment Banking Clients*
Rating Count % of Total Count % of Total % of Rating Category
Buy 92 82.9% 9 90.0% 9.8%
Accumulate N/A N/A N/A N/A N/A
Neutral 18 16.2% 1 10.0% 5.6%
Reduce N/A N/A N/A N/A N/A
Sell 1 0.9% 0 0.0% 0.0%
Total 111 100% 10 100% 11.1%

*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 September 30, 2010

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

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