Sky-mobi's (NASDAQ:MOBI) Q2 revenue (RMB170.2M, or $27.4M) blew away guidance of RMB135M-RMB145M. For Q3, the Chinese mobile game distributor expects revenue of RMB200M-RMB210M.
Smartphones accounted for 77.8% of Q2 revenue, up from 68.1% in Q1. A 63.3% Q/Q increase in revenue from single-player games (70.3% of smartphone revenue) fueled the growth. Revenue from smartphone multi-player games rose 27.2%, and smartphone ad revenue 32.1%.
Smartphone single-player ARPU was RMB8.8, and multi-player ARPU RMB161.4. Average monthly active users for Sky-mobi's Maopao app store/gaming platform rose 20% Q/Q to ~30M, and paying game users rose to 11.9% of the total base from 10.2%.
Sky-mobi claims its services are now provided through 40K+ Chinese telecom stores, as well as 100+ distribution partner (including Baidu, Tencent, and Qihoo).
Gross margin was 25.4% vs. 25.5% in Q1 and 27.4% a year ago. Opex totaled $5.3M, +17.4% Q/Q but only +5.3% Y/Y.
optionMONSTER observes ~3K July 10 Sky-mobi (MOBI) calls were recently purchased between prices of $0.20-$0.35. Volume for the strike price (19% above current levels) was over 4x the previous open interest.
Shares now +26% since Sky-mobi announced on Wednesday it had sold a 37.9% stake in a Chinese mobile game developer, and reaped a $9.1M capital gain along the way.
Sky-mobi (MOBI) has sold its 37.9% stake in Chinese mobile game developer Fangcun to local firm Guangdong Alpha Animation. The company realized an RMB56.4M ($9.1M) capital gain on the deal.
CEO Michael Tao Song declares Sky-mobi "closely collaborated" with Fangcun on the development/distribution of hit game MonsterxMonster, and says the mobile game publisher might invest in other game developers in the future.
Sky-mobi had $95M in cash at the end of Q1. It announced a $20M buyback on May 30.
Aided by King's poor debut and general momentum stock weakness, U.S. and Chinese Internet stocks have fallen hard for the second time this week.
In addition to King rival Zynga and newly-minted VR headset maker Facebook, Twitter (TWTR -7.1%) is among the leading U.S. decliners. Exactly 3 months after reaching a peak of $74.73, shares have fallen below their post-IPO opening price of $45.10. They remain well above their $26 IPO price.
Other U.S. decliners: P -5.2%. Z -6.2%. TRLA -7%. GSVC -4.8%. SVVC -4.1%.
SA author/hedge fund analyst Thomas Hor considers Sky-mobi (MOBI +15.6%) deeply undervalued at 2x 2014E EV/sales (a multiple well below that of peers), and considers the company well-positioned to profit from a Chinese mobile gaming industry expected by iResearch to grow 94% this year to RMB21B ($3.4B).
Hor sees Sky-mobi's smartphone-related revenue, driven by downloads/in-app purchases tied to its Maopao app store (pre-installed on phones sold by China Mobile), more than doubling this year.
He adds Sky-mobi was adding 380K+ users/day as of December, and had 110M+ Maopao users by the end of 2013 (many of them in Tier-2/Tier-3 cities seen as "fertile grounds for growth").
Hor's $21 PT is based on a multiple of 6x 2014E EV/sales.
3D-BP+ FollowFollowing- Unfollow|Send Message30 May
$MOBI is the anti-$GLUU right now after announcing buyback. Great play in Chinese mobile.
May 30, 12:21 PM
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Sky-mobi Ltd provides mobile application platform in China. Its product are Maopao App Store, allows users to browse and download a range of entertainment-oriented mobile applications and content, including mobile games, music and books.