NQ Mobile Inc. (NQ) surged the most on record after the Chinese software security company said it will provide its products to subscribers of America Movil SAB, the Mexican wireless carrier controlled by billionaire Carlos Slim.
American depositary receipts of the NQ Mobile jumped 17 percent to $8.07 in New York. Trading volume was more than six times the daily average over the past three months. The ADRs led gains on the Bloomberg China-US Equity Index (CH55BN) of the most-traded Chinese shares in the U.S., which fell 1.3 percent to 92.86.
America Movil will begin offering NQ Mobile’s products for security, privacy and family protection to its 262 million subscribers in Latin America this year, the Beijing-based company said in a statement today. The agreement is the latest partnership for NQ Mobile, which announced last month deals with U.S. Cellular and a retailer of Verizon Communications Inc. (VZ)
The partnership with America Movil “opens a new revenue source for NQ, which sales mainly came from application downloads and from phone manufacturers previously,” Andy Yeung, an analyst at Oppenheimer & Co. in New York who rates NQ the equivalent of buy, said in a telephone interview. “It’s much more significant to NQ in terms of size.”
America Movil, the largest mobile operator in the Americas by subscribers, has helped make Slim the world’s richest person with an estimated net worth of $71.2 billion, according to Bloomberg’s Billionaires Index. NQ Mobile’s new venture will begin in Mexico and spread to 17 other Latin American nations throughout the year, the company said in the statement.
“This is the biggest international deal in NQ’s history and has probably been its No. 1 priority for the past year,” Mark Murphy, a San Francisco-based analyst for Piper Jaffray & Co., wrote in an e-mailed note today. Murphy reiterated his overweight rating, the equivalent of a buy, and a $17 price target. “The partnership should benefit our revenue forecast for 2013 and beyond.”
NQ Mobile will announce fourth-quarter earnings March 6 after the market closes. Revenue probably jumped 127 percent to $29.1 million, according to the average estimate of four analysts surveyed by Bloomberg.
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