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IPO Watch: 2011

China Century Dragon Media

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IPO Filing Date: May 14, 2010

Expected IPO Date: Jan. 31, 2011

Amount of Proceeds Sought: ~7.4 million

Expected Offering Price: $5.25

Expected Number of Shares to Be Sold: 1.4 million

Use of Proceeds: One-fifth of the proceeds would be used to invest in the company's advertising business to obtain more advertising time; two-fifths would be used to obtain advertising time and cooperation rights on regional TV stations; two fifths of the proceeds would go towards general corporate purposes.

Expected Ticker Symbol: CDM (CDM) (NYSE AMEX)

Co-Managers: WestPark Capital, Joseph Gunnar, I-Bankers Securities

About the Company: China Century Dragon Media is a television advertising company in China that offers blocks of advertising time on channels offered by China Central Television (CCTV).

CCTV is the People's Republic of China's state television broadcaster and China's largest TV network.

China Century Dragon Media buys advertising time on nationally broadcast CCTV television channels, which the company then repackages and sells to its customers.

Risks to the business include the company's dependence on CCTV and ability to continue obtaining advertising time slots on CCTV. All of China Century's revenue comes from the company's advertising business in China -- putting the business at risk in the event of economic downturns.

The company doesn't have long-term contracts with its customers, so they can terminate their relationship with the company at any time.

In 2009, China Century Dragon posted revenue of $74.5 million compared with $44.7 million in 2008 and $17.1 million in 2007.

Net income was $9 million in 2009 compared with $4.6 million in 2008 and $1.2 million in 2007.

Competitors: China Century Dragon Media said it faced "intense" competition for CCTV-related advertising business from a number of Chinese competitors, such as Walk-On Advertising, Vision CN Communications, Charm Communications (CHRM) and China Mass Media Corp. (CMM). China Century Dragon said these rivals may have competitive advantages, such as significantly greater financial, marketing or other resources, or stronger market reputation.

IPO Scorecard:

Actual IPO Date: Feb. 8, 2011

Actual Proceeds Raised: $6 million

Actual Offering price: $5.25

Actual Number of Shares Sold: 1.2 million

First Day Closing Price: $5.30

IPO First Day Return: 1%

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