JP Morgan keeps House-search stock Overweight rating

The following is a summary of the report:

Search House third-quarter results further demonstrate the company's strong executive power and expansion capacity. We believe that the company is gradually transforming from the online real estate information portal into a one-stop online real estate solutions provider. With the promotion of core values, we expect that trading based and service based revenue will grow further in the coming years.

The third-quarter results were 43% higher than our forecast, 54% higher than the average analyst forecast. The windfall is due to: 1 strong revenue growth, 2 cost control, and 3 one-time tax revenue. To get rid of the tax revenue, earnings per share in the third quarter was $1.04, 22% higher than our forecast.

Expected to be good. Management's revenue-guidance forecasts for fiscal 2013 increased from 25% to 28% Year-on-year, to 41% to 43%. In addition, management believes that the growth of E-commerce will remain strong in the next few quarters, while marketing services revenue growth will rebound to a lower double digits (up 7% in the first 9 months of this year).

Balanced growth engine. Less developed cities contribute more and more to income. In the third quarter, revenue contributions from 1, 2 and 3 cities were 38%, 32% and 30%, respectively, 44%, 31% and 25% in the second quarter. In terms of business composition, marketing services, list services, and E-commerce Services contributed 47%, 25% and 27% in the third quarter, respectively, 41%, 27% and 31% in the second quarter.

Maintain an "overweight" rating, with the target price raised to 58 dollars. Valuation based on: The company's 2014 to 2016 fiscal year of ads (US depository shares) earnings composite annual growth rate of 16%,peg (P/E relative profit growth ratio) of 0.9 times times, 2014 fiscal year NON-GAAP per share ads revenue for 3.97 U.S. dollars. Our target price corresponds to a 2014-year P/E ratio of 15 times times. As we expect to do well in the next few months, we will raise the revenue for 2014 and earnings per share by 9% and 21% respectively.