Funtalk China Holdings (NASDAQ:FTLK)

Middle Kingdom has completed its share exchange with Pypo. Pypo is a leading distributor in China of Samsung mobile phones and other related products.  It appears that there will be about 49 million post merger shares out standing.

For more details on the transaction, including  (earn our net income targets), and more information on Pypo please refer to the 8K/A filed on January 20, 2009.

The GeoTeam® was unable to locate a full income statement, but the details thus far look initially compelling:

-For its fiscal year ended march 2008 the company's sales rose 29%  to $378.3 million.

-For its fiscal year ended march 2008 the company's net income rose 110% to $30.2 million. We are not sure if the company is paying taxes.

-Proforma EPS for 2008 is about $0.62, which would indicate a P/E of 9 using the latest ask price and assuming 2009 EPS, at the very minimum, stayed even with 2008.

We would anticipate that 2009 financials will be filed shortly at which time a better assessment can be made regarding the attractiveness of this story and the proper valuation multiples to assign to the company.  Also, a clarification of the incentive allocation terms needs to be addressed.

On May 23, 2008 Middle Kingdom Alliance Corp announced the that it has signed a letter of intent relating to a business combination.

 Source: PR Newswire (May 23, 2008)

The GeoTeam is awaiting further details.