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 Kongzhong (NASDAQ:KONG)

Friday, February 28, 2014
Comments & Business Outlook

BEIJING, Feb. 27, 2014 /PRNewswire/ -- KongZhong Corporation (NASDAQ: KONG), a leading provider of digital entertainment services for consumers in the PRC, today has officially announced its commercialization strategy of Guild Wars 2, the groundbreaking fantasy MMO developed by ArenaNet in the west, when the hit online game publishes in China with partner KongZhong. Guild Wars 2 China will keep the same premium game play experience and innovative business model: players just pay for the game key one time, then are able to play the game for free with no subscription fee. In addition, on March 11, Guild Wars 2 China will host an exclusive two-week closed beta test where Chinese players will be invited to try out the revolutionary MMO for free.

Regarding the final retail price of the game, to ensure a strong market fit, Guild Wars 2 China will conduct a new round of market research with players and then announce the result.


Tuesday, February 25, 2014
Comments & Business Outlook

Fourth Quarter 2013 Financial Results:

  • Revenues exceed guidance - Total revenues for the fourth quarter of 2013 decreased 0.6% from the third quarter of 2013 but increased 2.8% from the same period last year to US$ 43.84 mn, exceeding the guidance range of US$ 41.0 mn to US$ 42.0 mn.
  • Net income and Non-GAAP net income in 4Q13 were US$ 10.03 mn and US$ 10.65 mn, respectively. Diluted income per ADS and diluted Non-GAAP earnings per ADS were US$ 0.21 and US$ 0.23 in 4Q13, respectively.

The Company's Chairman and Chief Executive Officer, Leilei Wang said, "In 2013, the Company spent great efforts preparing for the upcoming the official launch of Guild Wars 2 and World of War Plane, as well as the development of our smartphone games. Through in-house self-development and the licensing of overseas games, we will continue to develop our strong pipeline in both mobile and Internet games. Our goals in 2014 are to maintain stable cashflow from our WVAS business, capture fast growth in our mobile game business and in Internet games, achieving sustained growth in World of Tanks while having successful launches of Guild Wars 2 and World of Warplanes. I believe 2014 is the year the Company has the opportunity to see great performance."

Business Outlook (For the 3-month period ending March 31, 2014):

The Company expects total revenues for 1Q14 to be within the range of US$ 45.5 mn to US$ 46.5 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 13.5 mn, mobile game revenues of US$ 8.5 mn and Net Game revenues of US$ 24.0 mn.

The Company expects total gross profit to be within the range of US$ 22.5 mn to US$ 23.5 mn, net profit to be US$ 9.5 mn to US$ 10.5mn, and Non-GAAP net profit is expected to be US$ 10.5 mn to US$ 11.5 mn.

Regarding Internet Game revenue guidance, beginning in September 2013, with further implementation beginning on January 1, 2014, the Company began to account for the majority part of Internet Game revenues under VAT. Under VAT, the revenue is calculated excluding VAT that has to be paid to tax authority, while under business tax in the prior periods, the revenue is fully recorded including the business tax amount as per Chinese government tax policies. As such, although our Internet Game revenues guidance for domestic Internet games implies a slight decrease in revenues in 1Q14 compared to 4Q13, we expect gross profits from domestic Internet games to remain stable after taking into account the change from business tax to VAT.


Friday, January 31, 2014
Acquisition Activity

BEIJING, January 31, 2014 /PRNewswire/ -- KongZhong Corporation (NASDAQ: KONG), a leading digital entertainment company in China, today announced it has entered into definitive agreements to acquire a minority interest in Ourgame International Holdings Limited ("Ourgame" also known as "LianZhong") for a total consideration of RMB 100.0 mn in cash (equivalent to roughly US$ 16.5 mn at current exchange rates). The board of directors of the Company has approved the transaction, which is set to close before the end of February 2014.

Ourgame is one of the earliest and most popular providers of Internet-based casual board and card games in China. It has developed and currently operates over 300 board and card games with cross-platform support for PC and mobile. Through this strategic investment, Ourgame will accelerate its strategy of being a leader in casual board and card games in the China market, increase its plans to develop and promote 20-30 additional new products in the near future, and expand and enhance its platform offerings to the browser-based and mobile games market.

Over the past few years, Ourgame has significantly expanded their casual PC game presence to mobile with the success of its Dou Dizhu application on Android in China, especially card-based mobile games. Ourgame's Dou Dizhu application had over 40.0 mn downloads is one of the most popular card games in the China smartphone market. In addition, Ourgame has a number of other card games in its mobile game portfolio including Poker World, Texas Hold'em, etc..

Board and Card games is one of the earliest and most popular game genres to first develop on the PC and more recently on mobile. Based on The 29th China Internet Network Development State Statistic Report conducted byChina Internet Network Information Centre ("CNNIC"), the number Internet board and card game users in Chinareached 259.0 mn, making up 80% of all game users in China.

Through this strategic investment, KONG and Ourgame will seek to pursue co-development, co-marketing and co-distribution synergies through their respective smartphone and PC game businesses.


Wednesday, January 15, 2014
Comments & Business Outlook

BEIJING, Jan. 15, 2014 /PRNewswire/ -- KongZhong Corporation (NASDAQ: KONG), a leading provider of digital entertainment services for consumers in the PRC, announced a strategic partnership with leading Vietnamese game publisher, Soha Game, to publish its self-developed mobile game "Hero and Goddess", taking a first step to expand into the burgeoning South East Asiamobile game market.

KONG self-developed "Hero and Goddess" is a strategy RPG mobile game set against a simulated Western mythology based game world. It's game play is based on combining the aspects of questing, romance, city building, role-playing and a unique concubine progression system that supports a hero's overall progression in the game. The game has hundreds of mythical heroes that players can customize and choose from. And the ancient gods and goddess like Athena, Zeus, Odin can become your patrons in the game.

According to 3rd party market research firms, the Southeast Asia game market -- which includes IndonesiaMalaysiathe PhilippinesSingaporeThailand, and Vietnam -- is expected reach $1.2 billion in the next three years. Currently, the gaming market in Southeast Asia creates revenue of around $560 million and $240 million was generated from Vietnam market. The region boasts around 85 million gamers, and market research firms expect that number to grow to 132 million by 2017.  Regarding smartphone game market, Vietnam is the second fast growing smartphone country around the world based on iOS and Android activations.  In VietnamSoha Game estimates that they lead the market with over 53% of the total game market (PC and mobile).

Chinese developed games have proven to be successful in the Vietnam game market based on past commercial experience. The first overseas mobile game that Soha Game published in Vietnam was a Chinese mobile game Shenxiandao, which helped Soha Games achieve a record as one of the top grossing mobile games in the Vietnamese game market.

Soha Game is the top leading gaming portals in Vietnam, and is also the first choice for game developers all over the world who would like to enter the Vietnamese market. Soha Game dominates the Vietnamese Internet user base, which has 30 mn Internet users and 18 mn smartphone mobile phone users. Soha Game was the first to publish a smartphone online mobile game inVietnam, and achieved the highest revenue in the Vietnamese gaming history.

As an important growth driver for KongZhong, the Company has established 10 mobile game development studios in Beijing,ShanghaiXiamen, and Tianjin. KongZhong currently has a portfolio of 4 self-developed smartphone games, namely Pocket Fort, Heroes of the Three Kingdoms OL, Heroes and Goddess (aka Highlord), and Kooky Three Kingdoms, in commercial operation. In 2014, KongZhong's smartphone game strategy will continue to develop and publish 6 to 10 additional high-quality mobile games. In 2014, "Kooky Three Kingdoms" already achieved a strong start in China and the Company expects a similar reception as the game is introduced to the APAC markets in the coming months.


Thursday, November 21, 2013
Comments & Business Outlook

Third Quarter 2013 Financial Results:

  • Revenues exceed guidance - Total revenues for the third quarter of 2013 increased 1.2% from the second quarter of 2013 but a 11.7% decline from the same period last year to US$ 44.08 mn, exceeding the guidance range of US$ 43.0 mn to US$ 44.0 mn.
  • Non-GAAP net income inline with guidance - Non-GAAP net income was US$ 1.50 mn, inline with the guidance range of US$ 1.5 mn to US$ 2.5 mn. Non-GAAP diluted net income per ADS was US$ 0.03 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures").

The Company's Chairman and Chief Executive Officer, Leilei Wang said, "The Company significantly increased our marketing efforts in the 3rd quarter of 2013 in three main areas to support future growth in our games business. Namely, user acquisition for our new smartphone games, new user acquisition and increased branding for World of Tanks and raising the overall branding of KongZhong as a leading game publisher in China. I believe we were successful during the quarter in these goals and have set a good foundation for strong growth in our Internet games business and smartphone game business for the coming year. This includes the upcoming launches of World of Warplanes and Guild Wars 2 as well as an expected average of 2 new smartphone games to be released to the China market in the hardcore segment of the market each quarter."

Business Outlook (For the 3-month period ending December 31, 2013):

The Company expects total revenues for 4Q13 to be within the range of US$ 41mn to US$ 42 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 13mn, feature phone mobile game revenues of US$ 2mn, smartphone game revenues of US$ 3.5 mn and Net Game revenues of US$ 23mn.

The Company expects total gross profit to be within the range of US$ 20 mn to US$ 21 mn, net profit to be US$ 8 mn to US$ 9 mn, and Non-GAAP net profit is expected to be US$ 9 mn to US$ 10 mn.


Friday, November 8, 2013
Joint Venture

BEIJING, November 8, 2013 /PRNewswire/ -- KongZhong Corporation (NASDAQ: KONG), a leading provider of digital entertainment services for consumers in the PRC, announced today its strategic partnership with well known British car racing game developer Eutechnyx, where KongZhong will have exclusive rights to publish and operate the simulated car racing game ("ACR") in Mainland China.Auto Club Revolution is a free-to-play simulated online racing game and car enthusiast community built in collaboration with the motor industry. Featuring officially licensed cars from over 50 of the world's leading motor manufacturers, including BMW, Ford, VW, McLaren, Toyota and others, it delivers a best-in-class racing experience to the free-to-play market while providing a social platform for owning, customizing and enjoying cars online.

Through Kongzhong's success with World of Tanks, the partners believe the demand for a free-to-play online car racing simulation game, playable on the PC, will be high in the mainland China market where there is limited selection for Chinese players due to the lack of console game platforms. Where World of Tanks is a team-based massively multiplayer online action game dedicated to armored warfare, which includes more than 200 historically accurate armored vehicles from military history, ACR will bring hundreds of cars and race tracks with realistic detail and accuracy similar to other car simulation racing games that can only be played on the consoles. Moreover, the partners believe that as China has become the largest automotive market in the world, the interest for ACR should be high.

As the market leader of military genre online games in China, KongZhong is always strategically positioning itself to expand into new under-served market segments. According to CNNIC, by the end of 2012, the China online game market revenues reached 60.13 billion RMB with 336 million game players. However, to-date, there has never been a world-class free-to-play simulated car online racing game in China and through this partnership, KongZhong and Eutechnyx will seek to fulfill this significant gap in the market place.

Through this partnership, KongZhong also expects to bring innovations to Chinese online game and automotive cross marketing. In their overseas operation and marketing, ACR has cooperated with many of the world's top car brands by leveraging the realistic graphics of vehicles in ACR to supplement auto shows, auto showrooms and car portals by allowing players to "test drive" the newest sports and racing cars. With over 25 years of car racing game development experience Eutechnyx has gained the trust of the world's leading car manufacturers and this partnership will seek to leverage the car content in ACR to explore and create a new business model in China with these manufacturers.

Eutechnyx's CEO, Mr. Darren Jobling said, "We are excited to have KongZhong, as one of the leading online game providers in China, be our partner to introduce the first free-to-play simulated car online racing game to China. This is indeed a great honor for Eutechnyx. Eutechnyx has very good partnerships with many of the world-class auto brands and is always striving to bring the best product to Chinese players. Through our close cooperation with KongZhong, Eutechnyx hopes ACR can bring Chinese players the best online car racing game experiences."

KongZhong's Chairman and CEO, Mr. Wang Leilei said, "Eutechnyx is a world-wide famous game developer with many of its games published by the console game industry's leading players. Leveraging on Eutechnyx' 25 year racing game development experience and KongZhong's mainland China operation and marketing experience, we believe ACR will have great success in China by bringing Chinese players the first free-to-play simulated online racing game."


Tuesday, August 20, 2013
Comments & Business Outlook

Second Quarter 2013 Financial Results

  • Revenues inline with guidance - Total revenues for the second quarter of 2013 decreased 12.8% from the same period last year and 9.1% from the first quarter of 2013 to US$ 43.58 mn, inline with guidance range ofUS$ 43.5 mn to US$ 44.5 mn.
  • Gross profit inline with guidance - Total gross profit declined 4.0% from the first quarter of 2013 to US$ 17.85 mn, inline with guidance range of US$ 17 mn to US$ 18 mn.
  • Net income exceeds guidance - Net income declined 4.3% from the first quarter of 2013 to US$ 6.51 mn, exceeding the guidance range of US$ 5.5 mn to US$ 6.5 mn. Basic net income per American Depositary Shares ("ADS") was US$ 0.16.
  • Non-GAAP net income exceeds guidance - Non-GAAP net income decreased 12.1% from the first quarter of 2013 to US$ 7.82 mn, exceeding the guidance range of US$ 6.5 mn to US$ 7.5 mn. Non-GAAP diluted net income per ADS was US$ 0.18 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures").

The Company's Chairman and Chief Executive Officer, Leilei Wang said, "Second quarter operating results came inline with our expectations. In the third quarter, we will invest significantly in the promotion of a new content update for World of Tanks and begin building marketing activities around the upcoming beta tests for Guild Wars 2, World of Warplanes and Master of the Meteor Blades. Additionally, we will ramp up our marketing spend around our self-developed smartphone games, with around 8 new games to be commercially launched or entering beta testing in the 2nd half of this year. We expect to deliver revenue growth in the following quarters from these new marketing activities. Lastly, we will continue to drive our long-term strategy to become a leading games Company in China. For Internet games, we will concentrate our efforts on the self-development and licensing of high-quality AAA online games with a focus on e-sports and military games. For smartphone games, we will focus on the self-development, promotion and operation of AAA smartphone games, based on our in-house smartphone game engine."

Business Outlook (For the 3-month period ending September 30, 2013):

The Company expects total revenues for 3Q13 to be within the range of US$ 43mn to US$ 44 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 16 mn, mobile game revenues of US$ 6mn and Net Game revenues of US$ 21.5mn.

The Company expects total gross profit to be within the range of US$ 19 mn to US$ 20 mn, total operating expenses to be US$ 19 mn to US$ 20 mn, net profit to be US$ 0.5 mn to US$ 1.5 mn, and Non-GAAP net profit is expected to be US$ 1.5 mn to US$ 2.5 mn.

The increased level of operating expenses expected in 3Q13 reflects an increase in sales and marketing activities for the Company's smartphone and Internet games.


Wednesday, May 22, 2013
Comments & Business Outlook

First Quarter 2013 Financial Results:

  • Revenues exceeds guidance Total revenues for the first quarter of 2013 increased 9.3% from the same period last year and 12.4% from the fourth quarter of 2012 to US$ 47.94 mn, exceeding the guidance range of US$ 45 mn to US$ 46 mn.
  • Gross profit exceeds guidance Total gross profit declined 0.8% from the same period last year but increased 3.3% from the fourth quarter of 2012 to US$ 18.59 mn, exceeding the guidance range of US$ 17 mn to US$ 18 mn.
  • Net income exceeds guidance Net income declined 0.8% from the same period last year in 1Q13 but increased 42.6% from the fourth quarter of 2012 to US$ 6.81 mn, exceeding the guidance range of US$ 3 mn to US$ 4 mn. Basic net income per American Depositary Shares ("ADS") was US$ 0.17.
  • Non-GAAP net income exceeds guidance � Non-GAAP net income increased 2.8% from the same period last year and 14.9% from the fourth quarter of 2012 to US$ 8.90 mn, exceeding the guidance range of US$ 5.5 mn to US$ 6.5 mn. Non-GAAP diluted net income per ADS was US$ 0.21 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures").

The Company's Chairman and Chief Executive Officer, Leilei Wang said, "In the first quarter of 2013, we continued to demonstrate strong performance in our Internet games business which now makes up nearly 60% of total revenues and 70% of total gross profits. Since 2012, through our cooperation with overseas and domestic games developers, as well as the restructuring of our internal game development resources, we have established a strong future Internet game pipeline. For example, we continue to make preparations for the upcoming launch of World of Warplanes and Guild Wars 2 to the China market, which is now one of the most anticipated new games in China. Over the long term, to take advantage of opportunities in smartphone games market, we are developing more innovative mobile game products by leveraging our in-house game engine and R&D teams. We believe that in the following quarters, we will continue to bring new Internet games, as well as mobile games to the market."

Business Outlook (For the 3-month period ending June 30, 2013):

The Company expects total revenues for 2Q13 to be within the range of US$ 43.5 mn to US$ 44.5 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 15 mn, mobile game revenues of US$3.5 mn and Net Game revenues of US$ 25.5 mn.

The Company expects total gross profit to be within the range of US$ 17 mn to US$ 18 mn, total operating profit to be US$ 5.5 mn to US$ 6.5 mn, net profit to be US$ 5.5 mn to US$ 6.5 mn, and Non-GAAP net profit is expected to be US$ 6.5 mn to US$ 7.5 mn.


Friday, February 22, 2013
Comments & Business Outlook

Fourth Quarter 2012 Financial Highlights:

  • Revenues -- Total revenues for the fourth quarter of 2012 were US$ 42.63 mn, slightly below the prior guidance range of US$ 43 mn to US$ 44 mn.
  • Gross profit -- Total gross profit was US$ 18.0 mn in 4Q12 in line with the guidance range of US$ 17 mn to US$ 18 mn. 4Q12 cost of sales included US$ 1.12 mn in non-cash amortization expenses related to warrants issued to Wargaming.net for World of Tanks in perpetuity in May 2012.
  • Net income -- Net income in 4Q12 was US$ 4.77 mn, above the guidance range of US$ 3 mn to US$ 4 mn. Basic net income per American Depositary Shares ("ADS") was US$ 0.11.
  • Non-GAAP net income -- Non-GAAP net income was US$ 7.74 mn, above the guidance range of US$ 6 mn to US$ 7 mn. Non-GAAP diluted net income per ADS was US$ 0.18 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures").

The Company's Chairman and Chief Executive Officer, Leilei Wang said, "As we enter 2013, I'm pleased with the ongoing progress the Company has made in 2012 to diversify from our WVAS business to strong growth in our Internet and smartphone game businesses. While the WVAS business remains difficult, we will continue to operate our WVAS business as a positive cash flow contributor to the Company to provide support to our strong Internet game pipeline which includes the upcoming launch of Guild Wars 2 in China. Moreover, we continue to believe in the coming transition away from traditional MMORPGs in the mainland China market to esports type games which allow for shorter duration but more intense game play and believe we are well positioned in the our partnership with Wargaming, our other licensed games and our self-developed game portfolio for this transition. Lastly, we have successfully migrated our internal Internet and feature phone mobile game teams onto the Noumena smartphone game engine and believe we have strong advantages in the mid-core to hardcore smartphone game segment for both the China and global mobile game markets. Expect us to release a significant amount of new smartphone game content in the 1st half of 2013."

Business Outlook (For the 3-month period ending March 31, 2013):

The Company expects total revenues for 1Q13 to be within the range of US$ 45 mn to US$ 46 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 15.5 mn, mobile game revenues of US$ 4 mn and Net Game revenues of US$ 26 mn.

The Company expects total gross profit to be within the range of US$ 17 mn to US$ 18 mn, total operating profit to be US$ 3 mn to US$ 4 mn, net profit to be US$ 3 mn to US$ 4 mn, and Non-GAAP net profit is expected to be US$ 5.5 mn to US$ 6.5 mn.


Thursday, November 15, 2012
Comments & Business Outlook

Third Quarter 2012 Financial Highlights:

  • Revenues - Total revenues for the third quarter of 2012 were US$ 49.91 mn compared to guidance of US$ 50 mn to US$ 51 mn.
  • Gross profit - Total gross profit was US$ 19.07 mn in 3Q12 compared to guidance of US$ 21.5 mn to US$ 22.5 mn. However, 3Q12 cost of sales included US$ 1.36 mn in non-cash amortization expenses related to warrants issued to Wargaming.net for World of Tanks and other Wargaming games in perpetuity in May 2012.
  • Net income - Net income in 3Q12 was US$ 6.22 mn, compared to US$ 17.26 mn net loss in the same period last year but a 21.2% decrease compared to net income of US$ 7.89 mn in 2Q12. Basic net income per American Depositary Shares ("ADS") was US$ 0.15.
  • Non-GAAP net income - Non-GAAP net income was US$ 9.42 mn, while Non-GAAP diluted net income per ADS was US$ 0.21 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures.") compared to Non-GAAP net income of US$ 4.72 mn in the same period last year and guidance of US$ 10.0 mn to US$ 11.0 mn.

The Company's Chairman and Chief Executive Officer, Leilei Wang said, "KONG is poised to become a disruptive force in the China online game market as we believe we have partnered with the next-generation leaders of the global online game movement which combines overseas console quality gameplay with free-to-play business models. Our focus over the next year will be work closely with our online game partners to optimize their games for the China market and commercially launch these games, all of which are highly anticipated by Chinese gamers."

Business Outlook (For the 3-month period ending December 31, 2012):

The Company expects total revenues for 4Q12 to be within the range of US$ 43 mn to US$ 44 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues ofUS$ 16.5 mn, mobile game revenues of US$ 5 mn and Net Game revenues of US$ 22 mn.

The Company expects total gross profit to be within the range of US$17 mn to US$ 18 mn, total operating profit to be US$ 3mn to US$ 4 mn, net profit to be US$ 3 mn to US$ 4 mn, and Non-GAAP net profit is expected to be US$ 6 mn to US$ 7 mn.

Our outlook for 4Q12 Non-GAAP net profit, includes an additional US$ 1.0 mn in quarterly operating expenses associated with the headcount and infrastructure for our newly licensed games, including Guild Wars 2, World of Warplanes, Offensive Combat and Hawken. 4Q12 non-GAAP net profit outlook also includes another roughly US$ 150k in expenses associated with Imputed interest on long-term payables. Combined, our 4Q12 non-GAAP net profit outlook assumes roughly US$ 1.15 mn in additional expenses associated with the early buildout of our newly licensed games.


Wednesday, August 15, 2012
Comments & Business Outlook

Second-Quarter 2012 Highlights:

  • Revenues were $17.9 million, a decrease of 26.6% as compared to $24.3 million in the year-ago quarter
  • Gross profit was $6.6 million, as compared to $10.6 million in the year-ago quarter
  • Net loss was $1.3 million, or $0.09 per diluted share; non-GAAP net loss was $1.2 million, or $0.08 per diluted share
  • A related company received an initial RMB 2.5 million (U.S. $0.4 million) investment from Zhongguancun Development Group (the "Group") for the research, development and commercialization of Telestone Intelligent Premise System (TIPS) technology. This investment is part of a RMB 15 million (U.S. $2.4 million) total commitment awarded in May, which the Group is expected to fulfill over the next three to five years

"Although we reported a loss in the second quarter, which was in line with our expectations, this was largely due to the current weak capital-spending environment and an allowance for doubtful accounts. This year, we have deliberately moderated our top-line growth in order to improve collections so that we can position Telestone for a return to growth and focus on developing our U-DAS (WFDS) and TIPS technologies," commented Mr. Daqing Han, Chairman and CEO of Telestone.

Business Outlook

For the full-year 2012, Telestone continues to expect revenues to increase to approximately $117 million.

"We believe that the current drought of spending is temporary and that the start of the carriers' large-scale 4G network construction, in addition to the development and growth of our U-DAS and TIPS technology-based products, will help Telestone hit its revenue target this year and create a bright future for the company, its employees, and shareholders," concluded Mr. Han.


Thursday, May 17, 2012
Comments & Business Outlook

First Quarter 2012 Financial Highlights:

  • Revenues exceeds guidance - Total revenues for the first quarter of 2012 increased 12% from the fourth quarter of 2011 to US$ 43.84 mn, exceeding the Company's 1Q12 revenue guidance range of US$ 41.5 mn to US$ 42.5 mn.
  • Gross profit exceeds guidance - Total gross profit was US$ 18.75 mn for 1Q12, exceeding the Company's 1Q12 guidance range of US$ 17 mn to US$ 18 mn.
  • Net income exceeds guidance - Net income in 1Q12 was US$ 6.86 mn, exceeding the Company's guidance range of US$ 4.5 mn to US$ 5.5 mn, a 21% increase compared to net income of US$ 5.67 mn in 4Q11. Basic net income per American Depositary Shares ("ADS") was US$ 0.17.
  • Non-GAAP net income exceeds guidance - Non-GAAP net income was US$ 8.66 mn, exceeding the Company's guidance range of US$ 6.5 mn to US$ 7.5 mn, while Non-GAAP diluted net income per ADS wasUS$ 0.21 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures.")
  • Cash and cash equivalents - As of March 31, 2012, the Company had US$ 178.19 mn in cash and cash equivalents, held-to-maturity securities and trading securities or US$ 4.34 per ADS in cash and cash equivalents, held-to-maturity securities and trading securities, compared to US$ 154.57 mn at the end of 4Q11.

Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wangsaid, "The Company achieved record revenues and non-GAAP Net Profit After Tax ("NPAT") in the first quarter of 2012 and more importantly, we continue to build a strong foundation for future growth in our Internet and mobile game businesses."

Business Outlook (For the 3-month period ending June 30, 2012):

The Company expects total revenues for 2Q12 to be within the range of US$ 49 mn to US$ 50 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 20.5 mn, mobile game revenues of US$ 6.0 mn and Net Game revenues of US$ 23 mn.

The Company expects total gross profit to be within the range of US$ 21.5 mn to US$ 22.5 mn, total operating profit to be US$ 6.5 mn to US$ 7.5 mn, net profit to be US$ 6.5 mn to US$ 7.5 mn, and Non-GAAP net profit is expected to be US$ 9 mn to US$ 10 mn.


Monday, May 14, 2012
Joint Venture

BEIJING, May 14, 2012 /PRNewswire-Asia/ -- KongZhong Corporation (NASDAQ: KONG), a leading provider of digital entertainment services for consumers in the PRC, today announced that it has entered into a series of agreements with Wargaming.net to create a strategic partnership for all of Wargaming.net's existing and future games in the mainland China market, including but not limited to World of Tanks, World of Warplanes and World of Battleships.

As part of this partnership, KONG's board of directors has approved the grant of warrants for the issuance of issue up to 5.0 million American Depositary Shares ("ADSs') representing ordinary shares of KONG to Wargaming.net with an exercise price of US$ 5.94 per ADS. The warrants have a duration ranging from 1 to 6 years, and the exercise of the warrant is subject to various conditions, including the commercial launch of Wargaming.net's future games in the mainland China market.

Moreover, as part of this strategic partnership, Wargaming.net has granted to KONG (i) exclusive and long-term operating rights for World of Tanks, World of Warplanes, World of Battleships in mainland China and (ii) the right of first offer over the operating rights of any future Wargaming.net game (including mobile games) in mainland China.

The Company's Chief Financial Officer and Board Member, Jay Chang said, "We are excited to have Wargaming.net as a strategic partner of KONG. Through this partnership, we have fully aligned our long-term interests to maximize the success of all of Wargaming.net's games in the China market for many years to come."

Victor Kislyi, CEO of Wargaming.net said, "After a year of close cooperation and success with World of Tanks in China, we believe KONG is the ideal partner to support the growth and development of all of Wargaming.net's existing and future games for the China market and we are proud to be a strategic partner with KONG."


Tuesday, February 21, 2012
Comments & Business Outlook

Fourth Quarter 2011 Financial Highlights:

  • Revenues inline with guidance - Total revenues for the fourth quarter of 2011 increased 9% from the fourth quarter of 2010 to US$ 39.28 mn, inline with the Company's 4Q11 revenue guidance range of US$ 39 mn to US$ 40 mn.
  • Gross profit exceeds guidance - Total gross profit was US$ 16.67 mn for 4Q11, exceeding the Company's 4Q11 guidance range of US$ 15 mn to US$ 16 mn.
  • Net income exceeds guidance - Net income in 4Q11 was US$ 5.67 mn, exceeding the Company's guidance range of US$ 3 mn to US$ 4 mn, a 13% increase compared to net income of US$ 5.01 mn in 4Q10. Basic net income per American Depositary Shares ("ADS") was US$ 0.14.
  • Non-GAAP net income exceeds guidance - Non-GAAP net income was US$ 7.47 mn, exceeding the Company's guidance range of US$ 5.0 mn to US$ 6.0 mn, while Non-GAAP diluted net income per ADS wasUS$ 0.18 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures.")
  • Cash and cash equivalents - As of December 31, 2011, the Company had US$ 154.6 mn in cash and cash equivalents, short term investments and trading securities or US$ 3.76 per ADS in cash and cash equivalents, short term investments and trading securities, compared to US$ 143.7 mn at the end of 3Q11. Cash and cash equivalents exclude US$ 22.19 mn loans to a third party.

Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wang said, "In 4Q11, the Company achieved record GAAP and Non-GAAP net profit since we arrived at KONG in late 2008 with our strong performance being driven by our diversification into Internet games. "During the quarter, World of Tanks ("WoT") continued to drive our Internet games business and we expect WoT's strong momentum to carry into 2012 as one of the top team-based massively multiplayer online games in the mainland China market. "We plan to release our self-developed flagship 3D MMORPG game,Kung Fu Hero, to open beta in March and expect Kung Fu Heroto be a significant contributor to our Internet games business in the 2nd quarter of 2012 and beyond. "To further diversify KONG's business, we recently announced the acquisition of Noumena and its Handymo smartphone mobile game engine platform to accelerate the development of KONG's mobile game business in both the China and global smartphone mobile game markets. "I'm pleased with our 4Q11 performance and believe KONG has strong momentum which will carry our strong 4Q11 performance into 2012."


Wednesday, November 30, 2011
Comments & Business Outlook

Third Quarter 2011 Results

  • Revenues inline with guidance - Total revenues for the third quarter of 2011 increased 3% from the third quarter of 2010 to US$ 38.98 million, inline with the Company's 3Q11 revenue guidance range of US$ 38.5mn to US$ 39.5mn.
  • Gross profit under guidance - Total gross profit was US$ 14.01mn for 3Q11, slightly under the Company's 3Q11 guidance range of US$ 14.5mn to US$ 15.5mn. Gross profit was under the guidance range due to lower than expected gross profits in our WVAS business.
  • Net income (excluding non-cash items) inline with guidance - Net loss in 3Q11 was US$17.26mn, which includes a $20.26 million non-cash impairment loss on goodwill and intangible assets. Excluding this impairment loss, net income in 3Q11 was US$ 3.00mn, inline with the Company's guidance range of US$ 2.5mn to US$ 3.5mn, a 157% increase compared to net income of US$ 1.17mn in 3Q10. Basic net loss per American Depositary Shares ("ADS") was US$ 0.42.
  • Non-GAAP net income inline with guidance - Non-GAAP net income was US$ 4.72mn, inline with the Company's guidance range of US$ 4.0mn to US$ 5.0mn, while Non-GAAP diluted net income per ADS was US$ 0.11 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures.")
  • Cash and cash equivalents - As of September 30, 2011, the Company had US$ 143.1mn in cash and cash equivalents or US$ 3.5 per ADS in cash and cash equivalents, compared to US$ 134.2mn at the end of 2Q11. Cash and cash equivalents exclude US$ 21.99mn loans to a third party.


 

Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wang said, "The Company continued to generate positive cashflow and I believe we are poised for strong growth in our Internet games business in 2012 and beyond.

"We continued to grow the World of Tanks community ("WoT") in China and look forward to launching version v.7.0 and Clan Wars to Chinese users by the end of this year. More importantly, we continue to work in close partnership with Wargaming.net to further localize the game to Chinese user tastes and believe we will see strong growth of WoT in 2012.

"In addition, we've begun closed beta testing of Kung Fu Hero ("Hero") our self-developed martial arts 3D MMORPG in October in mainland China. While we don't expect to conduct our open beta test until after Chinese New Year, initial feedback from Hero has been strong and we continue to believe that Hero has the potential to become KONG's flagship online game for 2012 and 2013.

"On November 17th, we launched Paperman, an anime-based first person shooter ("FPS") in partnership with Gamepot from Japan and are working closely with Gamepot to develop new content to differentiate Paperman from other FPS games in the market.

"More importantly, we continue to build out our Internet game pipeline for 2012 and 2013, for both self-developed games and overseas games. Expect updates from us in the future as we make progress on this.

"Lastly, we are actively seeking to leverage our existing mobile game development resources to develop games for the IOS and Android smartphone mobile game platforms and expect to derive a growing percentage of our mobile game business on these platforms in 2012."

Business Outlook (For the 3-month period ending December 31, 2011):

The Company expects total revenues for 4Q11 to be within the range of US$ 39mn to US$ 40mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 19mn, mobile game revenues of US$ 7mn and Online Game revenues of US$ 13.5mn.

The Company expects total gross profit to be within the range of US$ 15mn to US$ 16mn, total operating profit to be US$ 3mn to US$ 4mn, net profit to be US$ 3mn to US$ 4mn, and Non-GAAP net profit is expected to be US$ 5mn to US$ 6mn.


Thursday, September 29, 2011
Notable Share Transactions
BEIJING, September 29, 2011 /PRNewswire-Asia/ -- KongZhong Corporation (Nasdaq: KONG), a leading provider of digital entertainment services for consumers in the PRC, today announced that its Board of Directors has authorized the Company to repurchase up to US$ 15 million worth of the Company's American Depositary Shares (ADSs). The share repurchase plan calls for the ADSs to be acquired in the open market from time to time depending upon market conditions, the market price of Company's ADSs and the management's assessment of the Company's liquidity and cash flow needs. The repurchase plan is intended to increase shareholder value and reduce the dilutive effect of the Company's equity incentive plans. The Company expects to finance the purchases from existing cash reserves. The share repurchase plan was approved by the Company's Board of Directors, including the Company's Chairman and CEO, Leilei Wang, on September 29, 2011.

Wednesday, September 7, 2011
Comments & Business Outlook

Second quarter 2011 Financial Highlights:

  • Revenues inline with guidance - Total revenues for the second quarter of 2011 increased 4% from the first quarter of 2011 to US$ 41.6 million, inline with the Company's 2Q11 revenue guidance range of US$ 41.5 mn to US$ 42.5 mn.
  • Gross profit exceeds guidance - Total gross profit was US$ 17.03 mn for 2Q11, slightly exceeding the Company's 2Q11 guidance range of US$ 16 mn to US$ 17 mn.
  • Net income inline with guidance - Net income in 2Q11 was US$4.39 mn, inline with the Company's guidance range of US$ 4.0 mn to US$ 5.0 mn. The net loss in 1Q11 was US$0.5 mn, which included a loss on change in fair value of contingent consideration of US$3.7 mn. Basic net income per American Depositary Shares ("ADS") was US$ 0.11.
  • Non-GAAP net income inline with guidance - Non-GAAP net income was US$ 6.18 mn, inline with the Company's guidance range of US$ 6.0 mn to US$ 7.0 mn, while Non-GAAP diluted net income per ADS was US$ 0.14 vs US$ 0.13 in second quarter 2010.

Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wang said, "The Company generated stable Non-GAAP net profit and increased our cash balance while continuing to build future growth opportunities in our Internet game business.

"More importantly, our Internet game business achieved over US$ 10.0 mn in quarterly revenues for the first time after only entering the online game market in early 2010, making KONG one of the fastest growing new entrants in the Chinese online game market.

Business Outlook (For the 3-month period ending September 30, 2011):

The Company expects total revenues for 3Q11 to be within the range of US$ 38.5 mn to US$ 39.5 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 19 mn, mobile game revenues of US$ 10 mn and Online Game revenues of US$ 10 mn.

The Company expects total gross profit to be within the range of US$ 14.5 mn to US$ 15.5 mn, total operating profit to be US$2.5 mn to US$ 3.5 mn, net profit to be US$ 2.5 mn to US$ 3.5 mn, and Non-GAAP net profit is expected to be between US$ 4 mn to US$ 5 mn.


Wednesday, June 29, 2011
Liquidity Requirements

We believe that our current cash and cash equivalents and cash flow from operations will be sufficient to meet our anticipated cash needs, including for working capital purposes, capital expenditures and various contractual obligations, for at least the next 12 months. We may, however, require additional cash resources due to changed business conditions or other future developments, including any investments or acquisitions we may decide to pursue.

We intend to meet the majority of our future funding needs through cash flow generated from operating activities and our current cash and cash equivalents.


Wednesday, May 25, 2011
Comments & Business Outlook

First Quarter 2011 Financial Highlights:

(Note: Unless otherwise indicated, all financial statement amounts used in this press release are based on United States Generally Accepted Accounting Principles (GAAP) and denominated in US dollars)

  • Revenues exceeds guidance – Total revenues for the first quarter of 2011 ("1Q11") increased 11% quarter-over-quarter ("QoQ") to US$ 40.1 million ("mn"), exceeding the Company's 1Q11 revenue guidance range of US$ 38.5 mn to US$ 39.5 mn.
  • Gross profit inline with guidance – Total gross profit was US$ 16.5 mn for 1Q11, inline with the Company's 1Q11 guidance range of US$ 15.5 mn to US$ 16.5 mn.
  • Net income – Net loss in 1Q11 was US$ 0.46 mn, including a change in the fair value of the Dacheng contingent consideration of US$ 3.73 mn. Excluding this change, net income in 1Q11 was US$ 3.27 mn, a 3% increase compared to US$ 3.17 mn in 1Q10. Basic net loss per ADS was US$ 0.01 based on 37.58 mn ADS outstanding as of March 31, 2011.
  • Non-GAAP net income inline with guidance – Non-GAAP net income was US$ 6.9 mn, inline with the Company's guidance range of US$ 6.0 mn to US$ 7.0 mn.
  • Non-GAAP diluted net income per ADS was US$ 0.17 vs. $0.15 (Non-GAAP Financial Measures are described and reconciled to the corresponding GAAP measures in the section titled "Non-GAAP Financial Measures.")
  • Cash and cash equivalents – As of March 31, 2011, the Company had US$ 118.3 mn in cash and cash equivalents or US$ 3.1 per basic ADS in cash and cash equivalents.  This includes a US$ 9.3 mn payment for the early extinguishment of convertible note issued to Nokia Growth Partners, a US$ 14.6 mn payment for the cash portion related to the final payment for Dacheng and a US$ 21.2 mn investment in RMB denominated short-term loan to a third party.

Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wang, said, "Against a stabilized WVAS environment, the Company continued to generate stable Non-GAAP net profit while building up future growth opportunities within our Internet game business.  On March 15th, we successfully launched World of Tanks ("WoT") to the market and based on the first few months of operation, continue to believe that WoT has potential to one of the top team-based shooters in the mainland China.  Moreover, development of our self-developed 3D MMORPGs, Kung Fu Hero and Emofaze 3 (the second in the EMFZ series), continues on track with a 3Q 2011 open beta targeted for Kung Fu Hero and a late 2011 or early 2012 open beta target for EMFZ3.  Lastly, to further diversify our online game portfolio, we recently announced our partnership with Gamepot, to exclusively operate one of the most popular online first person shooters in Japan, Paperman."

Business Outlook (For the 3-month period ending June 30, 2011):

The Company expects

  • total revenues for 2Q11 to be within the range of US$ 41.5 mn to US$ 42.5 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 20 mn, mobile game revenues of US$ 12 mn and Online Game revenues of US$ 10 mn.  
  • total gross profit to be within the range of US$ 16 mn to US$ 17 mn
  • total operating profit to be US$ 4 mn to US$ 5 mn
  • net profit to be US$ 4 mn to US$ 5 mn
  • Non-GAAP net profit is expected to be between US$ 6 mn to US$7 mn.

Thursday, March 3, 2011
Comments & Business Outlook

Fourth Quarter Highlights:

  • Revenues inline with guidance – Total revenues for the Fourth Quarter of 2010 ("4Q10") increased 5% year-over-year ("YoY") to US$ 36.0 million ("mn"), inline with the Company's 4Q10 revenue guidance range of US$ 35.5 mn to US$ 36.5 mn.
  • Gross profit inline with guidance – Total gross profit was US$ 15.96 mn for 4Q10, inline with the Company's 4Q10 guidance range of US$ 15.5 mn to US$ 16.5mn.
  • Net income grew quarter-over-quarter ("QoQ") and YoY – Net income in 4Q10 was US$ 5.01 mn a 330% increase compared to US$ 1.17 mn in 3Q10 and a 149% increase compared to US$ 2.0 mn in 4Q09.
  • Basic net income per ADS was US$ 0.13 based on 37.31 mn ADS while diluted net income per ADS was US$ 0.13 based on 39.08 mn ADS outstanding as of December 31, 2010.
  • Non-GAAP net income exceeds guidance – Non-GAAP net income was US$ 7.27 mn, exceeding the Company's guidance range of US$ 5.5 mn to US$ 6.5 mn, while Non-GAAP diluted net income per ADS was US$ 0.18

Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wang, said, "KONG achieved our highest quarterly net profit and non-GAAP net profit since I joined the Company, driven by our diversification into Internet games, cost efficiencies and a stabilizing WVAS market. With the strong performance from Internet games helping to balance the challenges in WVAS, I believe our diversification into Internet games has been a success."

The Company expects total revenues for 1Q11 to be within the range of US$ 38.5 mn to US$ 39.5 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 20.3 mn, mobile game revenues of US$ 13.5 mn and Online Game revenues of US$ 5.2 mn.  

The Company expects total gross profit to be within the range of US$ 15.5 mn to US$ 16.5 mn, total operating profit to be US$ 4 mn to US$ 5 mn, net profit to be US$ 2 mn to US$ 3 mn (which includes an estimated US$ 1.6 mn non-cash expense related to the early extinguishment of the portion of NGP convertible notes prepaid), while Non-GAAP net profit is expected to be between US$ 6 mn to US$ 7 mn.


Tuesday, November 23, 2010
Comments & Business Outlook

Third Quarter 2010 Financial Highlights:

  • Revenues above guidance – Total revenues for the Third Quarter of 2010 ("3Q10") increased 7% year-over-year to US$ 37.67 million ("mn"), above the Company's 3Q10 revenue guidance range of US$ 35 mn to US$ 36 mn.
  • Gross profit above prior guidance – Total gross profit was US$ 15.6 mn for 3Q10, exceeding the Company's 3Q10 guidance range of US$ 14.5 mn to US$ 15.5 mn.
  • Net income in line with guidance – Net income in 3Q10 was US$ 1.17 mn, in line with the Company's 3Q10 guidance range of US$1.0 mn to US$ 1.5 mn.  
  • Basic net income per ADS was US$ 0.03 based on 37.05 mn ADS while diluted net income per ADS was US$ 0.03 based on 38.28 mn ADS outstanding as of September 30, 2010.
  • Non-GAAP net income in line with guidance – Non-GAAP net income wasUS$ 4.13 mn, in line with the Company's guidance range ofUS$ 3.5 mn to US$ 4.5 mn, while Non-GAAP diluted net income per ADS was US$ 0.10
  • Cash and cash equivalents – As of September 30, 2010, the Company had US$ 138.54 mn in cash and cash equivalents or US$ 3.74 per basic ADS in cash and cash equivalents.

Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wang, said, "Against a more stable WVAS environment, KongZhong continued to make long-term investments to become a diversified digital entertainment player in the mainland China market. In 3Q, we streamlined our WIS and WVAS business to more efficiently address the coming consolidation we foresee in the China WVAS market, we continued to lead the mobile game market and we made significant progress in our Internet game strategy to develop a robust and differentiated online game pipeline for 2011."

Business Outlook (For the 3-month period ending December 31, 2010):

The Company expects total revenues for 4Q10 to be within the range of US$ 35.5 mn to 36.5 mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$18.5 mn, mobile game revenues of US$ 13 mn and Online Game revenues of US$ 4.5mn.  

The Company expects

  • total gross profit to be within the range of US$ 15.5 mn to 16.5mn
  • total operating profit to be US$ 3 mn to 4 mn
  • Non-GAAP net profit to be roughly US$ 5.5 mn to US$ 6.5 mn.

Thursday, May 20, 2010
Comments & Business Outlook

Business Outlook (For the 3-month period ending June 30, 2010):

The Company expects total revenues for 2Q10 to be within the range of US$ 34.5mn to 35.5mn, with business unit revenues at the mid-point expected to roughly consist of WVAS revenues of US$ 16.5 mn, mobile game revenues of US$ 13.0 mn, WIS revenues of US$ 1.0 mn and Online Game revenues of US$ 4.5mn.

The Company expects total gross profit to be within the range of US$ 16.5mn to 17.5 mn, total operating profit and net profit to be US$ 2.5mn to 3.0 mn, while Non-GAAP net profit to be roughly US$ 5.3 mn to US$ 5.8 mn.


Monday, August 10, 2009
Comments & Business Outlook

Commenting on the results, the Company's Chairman and Chief Executive Officer, Leilei Wang, said, "I'm pleased to report that in the second quarter of 2009, KongZhong continued to grow overall profits driven by strong growth in our mobile games business, while at the same time, we were still able to maintain our long-term investment in Kong.net.

3rd Quarter 2009 Guidance Ending September a

  3rd Quarter 2009 Guidance 3rd Quarter 2008 Reported Period Change
GAAP Revenue $34.0 to $35.0 million $22.7  million 49.8% to 54.2%

Source: See Release (August 10, 2009 )

a The above forecasts reflect the Company's current and preliminary view and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.


Monday, June 22, 2009
Comments & Business Outlook

Commenting on the first quarter results, the Company's Chairman and Chief Executive Officer, Leilei Wang, said, 'In my first full quarter as CEO of KongZhong, I'm pleased to report that we have returned the Company to a positive operating profit and positioned the Company for future growth opportunities.

'Overall, I'm very pleased with our results for the 1st quarter of 2009 and look forward to building upon these achievements as we seek to become the pre-eminent leader of the mobile Internet industry in China.'

2nd Quarter 2009 Guidance Ending June a

  2nd Quarter 2009 Guidance 2nd Quarter 2008 Reported Period Change
GAAP Revenue $30.5 to $31.5 million $23.5  million 29.8% to 34.0%

Source: See Release (May 13, 2009)

a The above forecasts reflect the Company's current and preliminary view and are therefore subject to change. Please refer to the Company's Safe Harbor Statement (usually in press releases) for the factors that could cause actual results to differ materially from those contained in any forward-looking statement.




Saturday, February 21, 2009
Comments & Business Outlook

Guidance Report:

Commenting on the 2008 full year results the Company's Chairman and Chief Executive Officer, Leilei Wang, said, 'I'm very pleased with the performance of our team in the fourth quarter and in the full fiscal year 2008. Since I assumed the position of KongZhong's CEO a few months ago, I and my team have begun to implement various measures to improve the performance of our WVAS segment. More importantly, we have begun to invest more efficiently in our mobile games and KONG.net areas. The strong year-over-year growth in mobile games and KONG.net and improved gross margins across all of our business lines reflect some of the early results of these initiatives. I look forward to building upon these gains in 2009 and beyond as we seek to become the pre-eminent leader of the mobile Internet industry in China.'

Full Year Fiscal 2009 Guidance Ending March

  2009 Guidance 2008 Reported Period Change
GAAP Revenue $27.5 to $28.5 million $21.39 million 28.56% to 33.24%

Source: PR Newswire (February 18, 2009)