J.P. Morgan gives Cheetah Mobile shares an overweight initial rating

Beijing Time June 6 Evening News, JPMorgan released its investment report today, gave Cheetah mobile stock (NYSE:CMCM) "overweight" initial rating, the target price set to 26 U.S. dollars.

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

We gave the Cheetah mobile stock a "overweight" initial rating and set the target price at $26 trillion. The Cheetah Mobile unit is China's leading Internet security and key application developer, operating a similar flow export business with Qihoo 360. Cheetahs move through their consumer products to get a lot of traffic, and then transfer these traffic to the external platform (search engines, e-commerce sites, etc.) to commercialize. Cheetah Mobile has 223 million mobile month active users, and add 40 million to 50 million per quarter. By the end of this year, Cheetah Mobile users may be more than Qihoo, but the current commercial efficiency is far less than Qihoo.

Fastest growth: We expect the cheetah to move from 2015 to 2017, the revenue will rise to 74% (annual compound growth rate), the profit will reach 84%, mainly thanks to 60% of the 2013 to 2016 mobile usage rate and 128% of the commercial efficiency increase. This will allow the cheetah to move into the fastest-growing of the Chinese Internet concept stocks we are evaluating.

Top Price: We expect the cheetah to move up to $58 trillion (274% potential space) for the next 2 to 3 years, with a minimum of 14 dollars (10% of the decline). We expect a 70% per cent probability to be the highest share price, and only 30% per cent to the lowest price.

Valuation: We give the Cheetah mobile stock a "overweight" initial rating and set the target price at $26 trillion.