Bullish CCME Analyst No Longer With Firm

NEW YORK ( TheStreet) -- A research analyst who had long defended China MediaExpress ( CCME), the Chinese advertising company now embroiled in a developing fraud scandal, has left her position at Global Hunter Securities.

A spokesman for Global Hunter confirmed that the analyst, Ping Luo, had departed as of Friday, but he wouldn't say whether she had resigned or been fired. He declined to comment further.

Global Hunter suspended its coverage of China Media on Tuesday.

Luo couldn't immediately be reached for comment.

She last issued a full research note on China Media on Feb. 17, when she reiterated her buy rating on the company's stock and lifted her price target to $26. Earlier in the month, China Media was the subject of several scathing research reports from short sellers accusing the company of massive fraud.

"We were in China last week to conduct additional due diligence on CCME," Luo wrote in her Feb. 17 note. "We visited CCME's headquarters again, and reviewed all of its contracts with advertising clients and bus operators, tax filings, and bank statements for the last three years.... Based on our due diligence to date, our thesis remains unchanged: CCME is a leader in the inter-city bus advertising market with a unique business model and large growth potential."

Trading in China Media shares has been halted since March 11. This week, the company disclosed that its auditor -- the Hong Kong affiliate of Deloitte -- had resigned amid what it described as accounting "irregularities." The company's CFO and a key independent board member have also given up their posts.

Global Hunter hired Luo in 2007 to cover companies based in China. She came from Mitsubishi UFJ Securities, where she worked as an investment banker.

Deloitte is in the middle of another developing situation involving a Chinese stock and allegations of fraud. Douyuan Printing ( DYP) disclosed in a regulatory filing on Friday that the Securities and Exchange Commission had launched a formal investigation into whether the company committed fraud by purposefully misstating financial results.

Regulators have been conducting the probe since October, Douyuan said in the filing. About a month earlier, the company fired Deloitte as its auditor after the firm had raised accounting red flags.

Global Hunter, meanwhile, is one of a number of investment banks who do a steady business in underwriting shares of Chinese small-cap companies. According to its web site, its clients have included Shengdatech ( SDTH), Yuhe International ( YUII) and China Agritech ( CAGC), another Chinese small-cap company whose stock has been halted after the company dismissed its auditor, this time the China-based affiliate of Ernst & Young. Global Hunter didn't provide investment banking services to China MediaExpress.

-- Written by Scott Eden in New York

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