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China’s Sungy Mobile is Making it Big on the Nasdaq

Posted on Wednesday, Mar 12th 2014

According to a recent report by comScore, mobile device-based Internet usage is now ahead of desktop-based Internet usage in the US. In January, 55% of Internet usage in the US came from mobile devices. Mobile apps accounted for 47% of the usage and mobile-based browsers contributed to 8% of the total Internet usage in the country.

Sungy Mobile’s Offerings
Recently, China-based Sungy Mobile (NasdaQ: GOMO), a leading mobile app and platform development firm, listed on the Nasdaq. Sungy was founded in 2003 by Yuqiang Deng and Xiangdong Zhang with the intention of making inroads into the rapidly growing Symbian OS-based market. However, Sungy soon realized that the market for Symbian products was waning and instead aligned itself to an Android-focused strategy. The company has fared well based on this strategy.

Sungy is best known for their platform product GO Launcher EX, which manages apps, widgets, and functions on Android-based smartphones. GO Launcher EX was the leading downloaded product within the Personalization category on Google Play for the last two years. Based on the number of downloads, Sungy is among the top three publishers worldwide on Google Play with more than 239 million users at the end of September last year. Go Launcher EX has over 42 million average monthly active users and is available in 38 languages across 200 countries.

Sungy’s GO series of products also include additional apps and widgets that help improve performance for Android phones. Worldwide, their GO series products have more than 325 million users with more than 30% of their members based in China. 15% of their members are in the US, followed by 13% in Korea and 10% in the EU.

They also offer additional mobile services such as a mobile Internet portal 3G.cn and mobile reading services. The 3G.cn portal provides access to user-generated content in multiple media formats on various topics. It has over 44 million unique visitors, as of September last year. Their mobile reading service includes an ever growing library of original and copyrighted material, accessible to subscribers for a fee.

Sungy Mobile’s Financials
Sungy earns revenues through traditional mobile monetization models of advertisements, in-app purchases, and subscription to their additional services, such as access to the reading service. They have seen strong revenue growth and reported an 87% increase to $22.7 million for the six months ending June last year. Unlike other online-based companies, they have been profitable and have seen net more than double to $5.5 million from $2.5 million for the six month period ending June last year.

According to their latest reported financials, for the nine months ended September last year, revenues grew 88% to $37.58 million. They reported a net income of $9.96 million for this period.

While China has the highest number of users, it still generates only 15% of their revenues. The US accounts for 60% of their revenues and the rest of the world brings in the remaining 25%.

Sungy Mobile’s Recent Acquisition
Earlier last month, Sungy announced the acquisition of California-based mobile ad network, GetJar, for $5.3 million. Sungy plans to leverage the acquisition to expand their international presence as well as integrate GetJar’s mobile data analytics capabilities with their mobile advertising research and development initiatives.

Last November, Sungy went public on the Nasdaq under the ticker GOMO and raised $78.5 million by selling 7 million shares at $11.22 each. The stock has been faring well since the listing. Last week, the stock touched a high of $33.87. It is currently trading at $28.93 with a market capitalization of $936 million. Some analysts believe that Sungy may be the right acquisition candidate for a player like Baidu who wants to make it big in the mobile Internet world and is scouting for potential targets.

 

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