Zoom Technologies said that it intends to acquire a Chinese handset mobile video and value-added service company Beijing Leimone Shengtong Culture Development Company (Leimone Culture).
With the acquisition, Zoom Technologies will add ancillary business to its core activity of mobile phone Electronic Manufacturing Services (EMS) for original equipment manufacturer (OEM) customers and manufacturing of its own brand ‘Leimone’ mobile phones designed for the Chinese market and for export.
Leimone Culture was granted licenses by the State Administration of Radio Film and Television (SARFT) to provide web-based broadcast audiovisual programs and to produce radio and television content for mobile devices.
With the advent of 3G in mid-2009, Leimone Culture has captured revenues in the form of advertisements loaded onto new phones, sharing profits of value-added applications with the mobile operators, production of mobile short films, and web-based ad sales.
Leimone Culture’s annual gross sales in 2009 were RMB2.24m (approx. $327,000), or an increase of 17 times as compared to 2008. Based on results from the fourth quarter of 2009 and current activities, the company believes that Leimone Culture gross sales for 2010 are expected to reach RMB25m (approx. $3.6m) with net income of RMB10m (approx. $1.5m).
Leo Gu, chairman and CEO of Zoom Technologies, said: This is an important development for Zoom Technologies. We are excited to enter China’s 3G mobile video network through Leimone Culture. We expect this transaction to contribute to our business going forward as we continue to build momentum. We are very optimistic about the future of Zoom Technologies and our Leimone brand.
