Canaccord has new comments out

[Mountainbiker]

I wil post the comments as soon as I get them downloaded. Very good comments esp. "management has included minimal NQ Live revenue contribution in its strong 2014 sales guidance issuded at the Nov. analyst day".

That means, NQ Live could easily boost REV and EPS this year!!

[admin]

True, but the significance today lies more in signing up a US A-list carrier like Sprint. That's really the strongest possible endorsement.

[Mountainbiker]

NQ MOBILE TO POWER SPRINT'S NEW ANDROID

SMARTPHONES WITH SPRINT LIVE OFFERING

Investment recommendation: NQ Mobile today signed a definitive

agreement with Sprint to power Sprint’s next-generation Sprint ID offering

on all new Sprint Android-based smartphones in the U.S. with its NQ Live

mobile desktop technology. We believe this collaboration represents NQ’s

first ever tier-1 U.S. carrier partnership and view the win as a strong

endorsement of the NQ Live product and NQ Mobile overall given Sprint’s

stringent technology/security requirements, particularly for foreign vendors.

The Sprint deal adds to a sizable list of Chinese OEMs and carriers partners

for NQ Live, and we believe NQ Live represents another high-potential user

acquisition and monetization channel for NQ long term. Overall, we believe

NQ Mobile is well positioned in the mobile security and applications markets

given its market share in China, expanding global international deal pipeline

and customer base, and broadening product, services, and advertising

portfolio. We reiterate our BUY rating and $29 price target.

Investment highlights

· We believe initial deployments for Sprint Live will commence in late

Q2/14 and believe this announcement represents a strong endorsement

for NQ’s ‘always on’, interactive and usable home screen offering as

carriers look to differentiate their Android smartphone offerings.

Further, we believe Sprint Live could serve as a strong reference point

for additional tier-1 carriers globally as they evaluate NQ Live and also

serve as a platform to upsell NQ’s broader product portfolio into Sprint’s

Android base. Finally, Sprint’s large Android customer base represents a

material addition to NQ’s pre-install agreements with numerous handset

OEMs including ZTE, Huawei, Lenovo, and carrier partnerships

including China Telecom for NQ Live.

· Given deployment of NQ Live is still in its infancy, NQ management has

yet to share monetization metrics. However, we believe NQ Live has

strong revenue sharing monetization potential with carriers and

application developers through traffic redirection, advertising, and

mobile storefront applications, among others. Further, we believe NQ

management has included minimal NQ Live revenue contribution in its

strong 2014 sales guidance issued at the November analyst day.

· Overall, we view this early momentum for NQ Live as another channel

for NQ to increasingly leverage its under-monetized active user base and

leverage a strong suite of products including NQ Live, NQ Care, Music

Radar, and increasingly in-app and in-game advertising.

Valuation: Our $29 price target is based on shares trading at roughly 19x our

2014 pro forma EPS estimate.