BofA Merrill Lynch maintains Sohu bid rating of 82 USD

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Beijing time November 28 Evening News, BofA Merrill Lynch today issued an investment report to maintain the Sohu stock (Nasdaq:sohu) "Buy" rating, the target price set to 82 U.S. dollars.

The following is a summary of the contents of the report:

Sohu's advertising business (about 50% of total revenue) will benefit from: 1 The continued growth of search subsidiaries (will consolidate Tencent search); 2 The rebound in real estate and car advertising. We expect the Sogou to make ends meet in the fourth quarter of 2014, showing that revenue for advertising (including video) will grow by 28% per cent in 2014.

Third-quarter results: Revenue for 368 million U.S. dollars, the year-on-year growth of 29%, the chain growth of 9%, and Wall Street expected to coincide. Brand advertising revenue of 125 million U.S. dollars, an increase of 60%, in the company's guiding expectations of the upper limit, mainly thanks to the network video and real estate advertising strong performance. Sogou revenue for 52 million U.S. dollars, an increase of 48%, accounting for the total revenue of 14%. Game business performance in general, revenue for 161 million U.S. dollars, an increase of 7%, the chain down 4%, mainly by the number of active users down the drag. Net loss of $1.67 per share, while Wall Street is expected to be a net loss of 0.47 U.S. dollars per share, mainly by Sogou 82 million U.S. dollars special dividend impact.

Fiscal Quarter Forecast: Sohu estimates that the net loss in the fourth quarter will reach $11 million trillion to $13 million trillion. Revenues will reach $378 million trillion to $390 million trillion, up from Wall Street's projected $375 million trillion. The net profit for the fourth quarter will reach $18 million trillion to $22 million, the tour predicts.

Valuation: We continue to maintain the Sohu stock "buy" rating, the target share price of 82 U.S. dollars.