Kingtone Wirelessinfo Solution Holding Ltd. (NASDAQ: KONE)
Kingtone Wireless Solution is a mobile enterprise developer and provider based out of China. Today they released their financial statements for the first half of the year, ending in March 2015, which revealed very favorable results.
KONE Earnings & Outlook
KONE reported that revenues increased at the end of March 2015 132.9% from $3.6 million in March 2014 to $8.5 million. Software Solutions decreased by 75.4% to 0.04% million in the six months ending in March 2015. Revenue in March 2014 was $0.18 million. In total, software solution sales dropped from 4.9% to 0.5%. On the flip side, revenue from wireless system solutions increased 143.7%, from $3.5 million to $8.4 million on March 31, 2015. Yahoo Finance
Kingtone Wirelessinfo’s CEO Comments
“We are very pleased with our performance on business operation, which generated $2.6 million net income in the first six months ended March 31, 2015.” He concluded, ” Looking forward, we expect revenue of $12.0 million to $15.0 million, and net income of $0.5 million to $1.0 million for the fiscal year 2015. We are confident in accomplishing our goals at the end of fiscal year 2015,” said Peng Zhang, CEO of Kingtone Wireless Yahoo Finance
Technical Analysis
Today KONE gaped up to $7.18 and in pre market nearly reached the yearly high of $7.88, up 56% from yesterday’s close of $4.52. Based on the positive outlook of the earnings release, this stock has breakout potential if it can break the yearly high and should be a good play off the opening bell. It has a relatively low float of 1.13 million shares so stock can be real volatile if volume comes in from speculative traders at the bell.
I would be looking for this stock as a momentum play but would be cautious on a pullback from traders locking in profits. It will be interesting to see if KONE can hold the gap up level as a support level, or if it is a little overextended and falls thru filling the gap a bit.
On March 31, 2015, KONE had favorable news where it spiked to similar levels and the stock could not hold the price level and dropped the following months. As a longer term investor, I would proceed with caution and see if there is confirmation of this rally that the stock can hold this price level. Contrarian traders may short here as this price proved to be a resistance back in early April.
Company Profile
“Kingtone Wirelessinfo Solution Holding Ltd is a China-based holding company which conducts its operations through Xi’an Kingtone Information Technology Co., Ltd. The Company is a developer and provider of mobile enterprise solutions. Mobile enterprise solutions allow company personnel whose work function requires mobility to be connected with enterprise information technology (IT), including Enterprise Asset Management (EAM), Enterprise Resource Planning (ERP), Supply Chain Management (SCM), and Customer Relationship Management (CRM).The Company’s software enables such systems to get extended to personnel in the field using wireless devices, such as smart phones, PDAs, cameras, barcode scanners, portable printers, GPS devices, and tablet computers. Mobile enterprise solutions also include custom software applications for specific industries and businesses. The Company’s mobile enterprise solutions are built on its core middleware platform consisting of standardized modules.” The New York Times
