Maintain SouFun stock Overweight rating

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

First quarter results: In 2014 fiscal year, the total revenue was 121.2 million U.S. dollars, an increase of 33%, which is consistent with our and Wall Street expectations. Operating profit margin of 41%, flat, compared to our expectations of 400 points higher. Net profit of 41.5 million U.S. dollars, an increase of 46%. Diluted earnings per share of 0.10 dollars, higher than we expected 0.09 U.S. dollars and Wall Street expected 0.08 dollars.

reiterated performance expectations: SouFun continued to maintain the previous 2014 fiscal year revenue forecasts, that is, 780 million U.S. dollars to 796 million U.S. dollars, year-on-year growth of 22.5% to 25%. House search forecast for the next one to two quarters, the volume of real estate transactions will continue to remain sluggish.

Network Marketing and Listings business strong: The first quarter, network marketing services revenue growth of 31% Year-on-year, the distribution of services revenue growth of 57%, respectively, accounting for 39% and 35% of revenue. Search house said, because of the increase in supply, real estate developers advertising demand is also growing. The growth in revenue from the availability of services is mainly attributable to the increase in the number of paid subscribers.

E-commerce growth is slow: E-commerce revenues rose 12% Year-on-year, while the fourth quarter of last year was 67%, the entire 2013 fiscal year was 84%, mainly affected by lower trading volumes. At present, the search house E-commerce business covers 49 cities.

Valuation: We continue to maintain the "overweight" rating of soufun stocks.