You On Demand surges on Huawei pre-load deal

You On Demand (YOD +18.9%) shares surge after the company announced its You Cinema app will be pre-loaded on Huawei's Mate smartphones in China.

Chardan Capital analyst Jay Srivatsa noted, "While initial [royalty] revenues could be minimal, we believe success of this handset could prompt Huawei to include YOD’s service in more high end phones and more importantly, could also motivate other handset manufacturers to include the movie feature in their offerings."

Looking further out, Srivatsa observes, "As the only pure play provider of VOD [video on demand] content in China, we believe YOD remains ideally positioned to benefit from this transition of movie and TV content from traditional viewing devices i.e. TV and PC to the newer mobile devices such as the smartphones and tablets." Chardan has a Buy rating on YOD with a $6 PT.

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