Hurray! Wins Applause, Upgrade

We upgrade our recommendation to a Buy for Hurray! Holding Co. Ltd. (HRAY - Analyst Report), a leading provider of wireless value-added services (WVAS) and digital download content in China, following large-scale 3G (TD-SCDMA) wireless network deployments and the company's transformation to an entertainment content developer.

Hurray! also has a respectable net cash position on its balance sheet and operating margins appear to be improving due to cost reduction measures.

We believe the company may be in the midst of a favorable turnaround, with share priced at an attractive level near the company's net cash position. Wireless demand for mobile entertainment services may also result in higher revenue levels over the next six- to twelve-months.