Hold The Presses: China MediaExpress Holdings Gets Coveted AAA Rating!!!!!

21 Apr

Who cares if a firm’s auditor resigns when said firm is awarded a magic AAA credit rating!!?!?!  All you CCME longs who’ve been waiting for some news, any news, let alone good news may finally have your day (h/t @jcom67):

Who is Beijing ZhongKeJingXie Credit Assessment Center Co., Ltd., you ask?  I have absolutely no idea.  All I do know is that (via google translate), their website looks semi-shady, and on its contact page, includes an email address not @zxxp.net (matching their website) but “yongfeng82000@126.com”. I’m not sure how things work in China, but in the U.S., Europe, and most of the rest of the developed World, this doesn’t exactly support the credibility of said “AAA” rating.

I’m going to look into this a bit and see what I can find, although so-far its looking like this is just another weak step by CCME management to detract from criticism and support the legitimacy of the firm, i.e. it looks like BS.  Here’s the full press release from the CCME website:

19 April 2011

Fujian Fenzhong Media Co., Ltd. is Awarded AAA Credit Rating

In April 2011, entrusted by our company, Beijing ZhongKeJingXie Credit Assessment Center Co., Ltd. carried out a comprehensive analysis on the enterprise’s management quality, capital strength, performance credit and innovation capacity. After the evaluation by the Assessment Committee of Beijing ZhongKeJingXie Credit Assessment Co., Ltd., our company is awarded AAA credit rating, that is, strong ability to repay debts, basically independent to the impact of adverse economic conditions, with extremely low default risk. It is reported that Beijing ZhongKeJingXie Credit Assessment Co., Ltd. is one of the most reputable credit rating agencies in China that has consistently adhered to its independent, objective, impartial and scrupulous rating principles; its rating work has received full recognition from the relevant departments and agencies, and its rating results are also well recognized by the community and investors.

Credibility is the key of the market economy, and it enjoys the supremacy; the credibility is both the life of enterprises, and the foundation to establish good trade relations and economic transactions. Only those enterprises that stress credibility and honor reputations can obtain the trusts of customers and the community. The award of AAA Credit Rating to our company, and has encouraged us to uphold the spirit of good faith in the future to achieve a more harmonious development.

Picture here just in case CCME tries to pull it down:

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3 Responses to “Hold The Presses: China MediaExpress Holdings Gets Coveted AAA Rating!!!!!”

  1. Sean April 21, 2011 at 1:13 pm #

    Actually, the @126, @163, etc email addresses are frustratingly common for companies outside of those with international exposure. IT managers are expensive for sites that aren’t used for anything, and the popular email sites haven’t integrated forwarding or outside-domain mail services. So it’s not nearly as sketchy based on that as you would think.

    • The Analyst April 21, 2011 at 1:20 pm #

      Thanks for the info! I still find it very hard to believe that a firm rating debt of several hundred million dollar+ firms doesn’t think it worth the $ to have more legitimate contact info…

      Do you know anything about that particular rating agency by any chance?

      • Sean April 21, 2011 at 2:10 pm #

        Not a thing. Didn’t mean to imply support for CCME, just wanted to add that little fact.

        There are no real ratings agencies in China. There is no bond market in China for them to exist, really. Sure there are some SOEs that have bonds out there, but volume is nonexistent. The loans that most companies DO get are from local banks, and the banks don’t use the agencies; they have their own procedures for loan granting, not all requiring due diligence.

        The reason for most of these credit agencies to exist (there are a lot of small ones around) is for customers and clients. Payment terms in China can sometimes be extreme, either allowing 90+ days for payment, or demanding high upfront deposits. Looking at Chinese companies, it’s difficult to tell when high receivables become worrisome. Many function perfectly well, whereas some eventually have to have significant write-downs (e.g., FMCN). These credit agencies are popping up to lubricate those dealings.

        In fact, I believe the initial work done a few years ago pulling out the SAIC filings and comparing them to SEC filings was done by a guy who hired one of these agencies.

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