A Financial determination of Kongzhong Corporation

Asset - A Financial determination of Kongzhong Corporation

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While the American cheaper may be entering a duration of uncertainty, where prominent economic indicators are predicting a slowdown in the domestic market, in more emerging markets, as has often been reported, such as China, the cheaper is booming at staggering rates with the buyer becoming the beneficiary of the results. Consequently, as the buyer becomes more affluent, relative to old years, more discretionary wage will be found to be used for entertainment purposes. As a result, by deduction, clubs such as Kongzhong (Kong) will immediately be impacted in a safe bet manner which will help its top and lowest lines, promoting optimism for shareholders.

What I said. It is not the conclusion that the actual about Asset. You read this article for information on what you need to know is Asset.

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As reported on the Yahoo! Finance profile page, Kongzhong, part of the firm service industry, promotes a range of products and services relative to entertainment, media and society purposes. With promotions and products forming from ideas such movable phone entertainment enhancers, message boards, and contents about domestic and international news, while this firm only has a stronghold in the nation of China, because the country is the largest nation in the world relative to population, and because this country has seen staggering growth relative to Gdp indicators, I believe the environment Kongzhong presents itself in is a favorable one to the Chinese community. As this corporation is located in Beijing, there will be limited problems such as currency rate fluctuations or geopolitical interruption as the firm can focus only on its relative market. While some investors may be wary of investing in China because a country cannot grow and sustain such growth forever coupled with the possibility of a strong economic recession, I believe it is safe bet that a nation like China and India, with so much inherent and already promoted growth, will continue such advancements to the economy, benefiting the buyer which will ultimately advantage Kongzhong. In addition, as more consumers become wealthier, since Kongzhong promotes a more luxury service, there will only be great benefits in terms of fundamentals in the arrival years for this business.

While there may be some concern of putting to much faith for hereafter fundamentals this firm may produce, it is not to say that this firm does not already have solid figures. While wage has stabilized over the last fiscal year from growing roughly 514% to now about 62%, such growth, especially for a firm which formed only a few years ago, is remarkable. In addition, because the firm is categorized as a small cap stock, there seems to be some sentiment colse to Wall road that more money is pouring into these smaller growth clubs in 2007 because the large cap value stocks had maxed out in 2006. Such may be a blessing in disguise for Kongzhong, especially since the firm has a Peg ratio of about 0.64 for the next five years which not only indicates it is a strong buy value wise but has the growth to acquiesce with the given proposed sentiment. Nevertheless, many investors may also contest that the send P/E ratio is higher than the trailing P/E ratio which would signal an overbought share price or indicate decreasing earnings.

While there is some justification with a release, there is always going to be a convert in predictable earnings, and with the given economic situation, I believe wage will surprise both shareholders and analysts. In addition, it's send wage complicated of about 17 is still far below the manufactures average of 40. Not only that, but compared to manufactures competitors such as large capitalizations clubs such as Thomson, Chicago Merc, or MasterCard, while the firm service is a bit distinct with each company, Kongzhong's wage complicated is still well below all of these corporations. Furthermore, while wage relative to share price will not be that favorable to investors in the hereafter as predicted, there is still some optimism surrounding other comparable multiples in the form of wage and sales. Kongzhong's p/s, at about 2.81 over the last twelve months, while relatively normal, can be transcended to comprise other ratios which would lead to the conference that this firm is undervalued. With an firm value to wage level near 1.69 and an firm value to Ebitda ratio of about 6.7, both numbers interpret that this firm is undervalued relative to share price in terms of both wage and cash. Furthermore, Kongzhong has a Roe above 20% which is much higher than the 13% Roe manufactures average and has contributed to a current ratio at an marvelous 13.4. While its true that this firm is still relatively new and will assume more debt in hereafter years with expansion, having that much asset coverage relative to liabilities is an excellent trait to have and will conduce to more optimism with investors and hereafter growth.

The low number of debt has also led to a smaller firm value relative to shop value which, with low multiples in relation to the firm value, again contributes to the undersold labeling of this company. Nevertheless, the one area that concerns me is the high beta and relation, over the past 52 weeks, to the S&P 500. While the S&P has grown over 10% while this duration, Kongzhong has decreased in share price over 36% while this same time. However, 2006 was a year more inclined for the large cap value stocks, and with more money still flowing into the market, it is time for small cap growth stocks to begin to rise in terms of share price which means Kongzhong should be the beneficiary of the situation, especially since the S&P is supposed to have a great year percentage wise.

Thus with the good fundamentals and excellent economic setting, Kongzhong should advantage in 2007. In addition, looking at the charts, it seems, when examining the uncomplicated fascinating average of 100 days that Kongzhong has hit a sustain level of about 6.75 and is rising in a rally type movement. In addition, with high upward volume movements in December, there seems to be more optimism pouring in from investors who are eager for this stock's share price to rise. Therefore, as the charts indicate with strong sustain from fundamentals and economic conditions, Kongzhong is on an upward trend, and as an investor, you should take the opportunity to discover this company, regardless its capitalization, and think about purchasing shares.

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