Maintain the "buy" rating of Qihoo 360 stock

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

In the quarter of 2013, Qihoo's search and mobile revenues accounted for 1/3 of total revenue, while the search and mobile revenues were 0 in the quarter of the year 2012. We expect this growth to continue this year, with mobile games and searches accounting for about 45% of total revenue this year. Mainly thanks to: 1 The number of search advertisers has been expanded, 2 the rapid growth of the smartphone gaming market has driven the Qihoo's mobile business.

While commercializing search and mobile gaming, Qihoo will also invest in specific areas. Faced with the competition from Tencent and Taobao, we expect Qihoo to spend more on branding and mobile apps. In addition, we also expect the odd tiger to test water with other IP gateway products, such as routers, home entertainment and mobile devices in a cooperative way. To this end, we anticipate that, based on non-US GAAP, the operating profit margin of Qihoo 2014 will reach 32% (based on the US general Accounting standard of 25%).

In view of the strong fiscal year 2013 and the first quarter of fiscal year 2014, we will increase the revenues of Qihoo 2014 and 2015 by 9% and 11% respectively, and increase the diluted earnings per share by 9% and 7% respectively.

Valuation: We continue to maintain the "buy" rating of Qihoo 360, which will increase the target share price from $117 to $138.