Chinese stocks are on the run, again, as the Chinese market gets hotter and hotter by every week.The stock of Kongzhong Corp. (KONG), a Chinese company that sells value-added wireless services like ring tones, rose to another peak lately arriving at a price of $6.85.
On the grounds of addressable market Kongzhong keeps growing at great speed as the company announces new partnerships. The most recent partnership was an agreement with National Basketball Association (NBA).
Both sides announced a launch of the official NBA Chinese mobile web site. Under the agreement, KongZhong will operate the official NBA Chinese mobile website which users can visit on their mobile phones. The offering will see the mobile website showing live selected NBA games in their entirety and giving video clips of NBA game highlights.
Given the fact that mobile advertising is growing vastly and the niche is very huge here, KongZhong will definitely generate mobile advertising revenues, as well as it will increase the popularity of Kong.net.
Futhermore, On June 29, 2007, the company announced its cooperation with MSN China, a Microsoft joint venture in China, to be the sole content provider in China for the news and information channel and mobile games channel of Mobile Messenger 3.0.
The King Kong's Performance
Total revenues were $16.96 million, in line with the company's second quarter revenue guidance of $16 million to $18 million. Total mobile advertising revenues increased 92% sequentially to $223,000. US GAAP net income was $0.04 million. Diluted earnings per ADS were $0.00. Non-GAAP net income was $0.94 million.
Total mobile advertising revenues, which were mainly generated from KongZhong's wireless Internet portal Kong.net, increased 92% sequentially to $223,000 in the second quarter of 2007.
Operating expenses related to the company's wireless Internet sites were $2.37 million, which included $1.53 million in marketing and advertising expenses.
At the end of the quarter, the company had $118.75 million in cash and cash equivalents. Cash flow from operating activities totaled $2.40 million in the second quarter of 2007.
The Stock
During the past year the company's stock had a tough ride. Just month ago the stock hit its all-time low record arriving below $4 barrier.
However, just after that followed a sharp spike, though it has still not hit the record. The shares were hot enough recently as the stock climbed up to $6.85. The company is to be worth $243.72 million.
So, what this King Kong is really worth?
Chinese market is now on the hot spot and you should take a few minutes on it and grab a hot Chinese stock, even if it wouldn't be KONG. During recent years Kongzhong has been trapped in a challenging business environment resulting a decline in gross margins and lack of organic growth. However, despite all negative speculations the company stays on the right track.
The company's business model has a great potential to grow and though the market is overloaded with similar kind of companies - it has still got a niche. And King Kong is here to take it.
A few References
www.kongzhong.com
http://quotes.nasdaq.com/asp/summaryquote.asp?symbol=KONG%60&selected=KONG%60
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