Kongzhong Corp (KONG), a leading provider of mobile Internet value-added services in China, has decided to acquire Simlife International Inc, a Chinese mobile game developer with a portfolio of more than 200 3D mobile games.

We consider this is a strategic move as Kongzhong has become the largest mobile game developer in China ahead of its competitors Hurray! Holdings (HRAY), Linktone (LTON) and Shanda Interactive Entertainment (SNDA). The company has taken a strategic decision to focus on two key areas. These are (1) Develop its mobile games business as the main growth driver and attain the largest share in this segment (2) Transform its Kong.net portal into a wireless based social gaming and community platform.

According to various industry estimates, the Chinese wireless value-added services market may generate up to $11.5 billion of revenue

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Telecom Industry - Maintain Positive Outlook (Upgraded From Neutral in March 2009)

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster improved investment entry points more favorable at this juncture should stimulus plans, restricted operating expenses and higher earnings level result along with sustainable purchasing activity.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent

...

Telecom Industry - Maintain Positive Outlook (Upgraded From Neutral in March 2009)

Based on extreme industry weakness in late 2008 and early 2009, we believe valuation levels now reflect remedial conditions in the economy. Depressed stock prices foster improved investment entry points more favorable at this juncture should stimulus plans, restricted operating expenses and higher earnings level result along with sustainable purchasing activity.

Telecom companies are starting to report minimal financial improvements in terms of revenue and earnings levels. In addition, economic stimulus plans throughout the world, including the U.S. broadband infrastructure development program -- and similar structural subsidies in China and India -- may be a boon for selected service providers and equipment manufacturers.

Telecom carriers and equipment providers that offer the most attractive opportunities are focused on third-generation (3G) wireless, broadband (DSL) and fiber-to-the-home/node networking. There are also a few market leaders that have proven able to survive the sometimes turbulent

...

On Friday KongZhong Corporation (NASDAQ:KONG) shares fell 11% and finished the day $1 above their 52-week low.  Now that KONG has fallen, it sits defeated at $4.59 a share after Q1 profit fell a dreadful 94%.  Is there any hope for this beat up stock? KONG is still a top Chinese wireless entertainment provider, they managed to raise revenue 6.3 percent to $21.4 million, with wireless value-added services revenue rising to $21.1 million from $20 million. That news was brushed off after announcing that for Q1 they earned $88,000, breaking even on a per-share basis. The company earned $1.6 million, or 4 cents per ...