Top Performer for Tues: KongZhong (KONG) – Zacks #1 Rank Top Performers | Stock Market News & Stocks to Watch from StraightStocks

Top Performer for Tues: KongZhong (KONG) – Zacks #1 Rank Top Performers

Source: http://www.zacks.com/commentary/12047/Top+Performer+for+Tues%3A+KongZhong+%28KONG%29+-+Zacks+%231+Rank+Top+Performers
Posted on Tuesday, September 8th, 2009 | In Stocks to Watch

Contributed by: James Giaquinto (http://www.zacks.com/) -

KongZhong Corporation (KONG) announced solid second-quarter results in early August, which kept its earnings estimates moving in an upward direction.

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Today, shares of the Chinese mobile Internet company have gained approximately 8.4%, making it a Zacks #1 Rank Top Performer. Volume is at 646,000; well above the daily average of 231,000.

KONG is part of the Internet Content industry. The only other company from this space on today’s 227-stock Zacks #1 Rank List is Perfect World Co., Ltd. (PWRD).

Earnings Estimates

The Zacks Consensus Estimate for this year is at 35 cents per share. Over the past month, that expectation has gained 25% from 28 cents, as 3 of 4 covering analysts revised higher.

Meanwhile, the Zacks Consensus Estimate for next year is at 45 cents, marking a nearly 29% gain from this year. That’s also the exact same percentage it has risen over the past month as, once again, 3 of 4 covering analysts boosted expectations.

Second Quarter

KONG was able to continue growing profit thanks to strong growth in its mobile game business. On Aug 10, the company announced earnings per ADS of 10 cents, or nearly 43% better than the Zacks Consensus Estimate. This was KONG’s second straight positive quarterly surprise.

Total revenue reached $32.3 million, up 37% from the previous year and 9% from the previous quarter.

“In 2Q09, KONG maintained our leading position in the Chinese mobile games market and further strengthened our internal R&D game development capabilities through the acquisition of Simlife,” said Chairman/CEO Leilei Wang.

(On Jun 22, KONG announced the acquisition of Simlife International, Inc. (Simlife), a Chinese mobile game developer. KONG stated that Simlife will help to consolidate and extend its leadership in the Chinese mobile games market.)

Looking forward, KONG believes that it is well positioned in the Chinese 3G market for future growth opportunities.

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