Maintain Phoenix New Media stocks (Nyse:feng) "Hold-Wait" rating

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

Performance exceeded expectations: the 2013 fiscal year quarter, Phoenix New media total revenue of 400 million yuan, an increase of 32%, the chain growth of 18%, higher than our expectations of 6%, higher than the Phoenix new media yuan 368 million U.S. dollars to 378 million U.S. dollars in the guidance of expectations. Diluted earnings per share of 1.07 yuan, an increase of 203%, compared with our expectation of 70%, mainly because of operating leverage.

Advertising performance is strong: advertising revenue growth of 37% year-on-year, compared with our expectations and the company's guiding expectations of the online limit of up to 6%, mainly due to the number of advertisers and ARPA (per advertising average revenue) of the increase.

The pay business is still in transition: paid-services revenue grew 25% year-on-year, down 12%. Traditional mobile growth services have fallen 19% per cent on a month-on-month pace, but games and other services have surged in the chain.

Profit margin: Gross margin was 54%, compared with 45% a year earlier. Operating profit margin of 18%, year-on-year growth of about 9%, mainly thanks to higher gross margin and operating leverage.

Performance expectations: Phoenix New Media estimated that the first quarter of the 2014 fiscal Year Battalion total net revenue will reach RMB 340 million to 351 million yuan, the year-on-year growth of 21% to 25%. Advertising revenue will reach RMB 230 million to 235 million yuan, the year-on-year growth of 38% to 41%. The revenue from paid services is expected to be RMB 110 million to 116 million yuan, down 4% to 1% year-on-year. For the entire 2014 fiscal year, Phoenix New Media expects the advertising business to maintain about 35% per cent. Operating profit will be equal to the 2013 fiscal year.

Valuation: We continue to maintain the "hold-see" rating of Phoenix New media stocks.