JP Morgan keeps Phoenix New media overweight at $15

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Beijing time November 14 Evening news, JPMorgan announced its investment report today to maintain the Phoenix New media stocks (Nyse:feng) "Overweight" rating, the target share price from 14 U.S. dollars to 15 dollars.

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

Phoenix New Media third-quarter results show that Chinese media consumption continues to shift from PC to mobile platform. In the third quarter, the number of daily active users of new media news applications in Phoenix grew 400%.

Profit exceeding expectations: The third quarter, the Phoenix new media per share of diluted earnings than our expectations of 23% higher than the average forecast by Bloomberg analyst 30%, mainly thanks to effective cost control. Based on non-US general accounting standards, operating profit is 77 million yuan, 12% higher than our expectation.

Mobile AD commercialization: Mobile ad revenues grew 160% year-on-year, accounting for 10% of total advertising revenue, compared with 2% in the first quarter of the 2012 fiscal year. Because of the small market demand and the lack of third-party monitoring of mobile advertising, the current mobile brand advertising price is half lower than the PC price. However, we believe that this industry problem is expected to be resolved within the next 12 months to 18 months, thus boosting market demand, price promotion and commercialization capabilities.

Fiscal year 2014: Phoenix New Media management has confidence in the advertising outlook for the 2014 fiscal year, with major growth drivers including mobile advertising, video advertising and vertical expansion. With revenues moving from Low-margin wireless value-added services to High-margin online advertising, we expect Phoenix's new media margins to continue to rise.

Valuation: We continue to maintain the "overweight" rating of Phoenix's new media stocks, raising the target share price from $14 trillion to $15.