Maintain the "overweight" rating of Qihoo 360 stock

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

Given the great potential of Qihoo in the search and mobile market, we continue to maintain the "overweight" rating of its stock. This February, the Qihoo search market reached 25%, Baidu's 43%. The higher gap between the share of search revenue indicates that the odd tiger rises in a larger space. Qihoo's revenue drivers are still strong, and the company expects revenues from the first quarter of fiscal year 2014 to grow 106% year-on-year.

Profit forecast: The 2013 fiscal year quarter, the odd tiger revenue of 222 million U.S. dollars, an increase of 105%, compared with the company's guiding expectations of the upper limit of 7%. Based on non-US GAAP, the profit was $90 million trillion, up 240% per cent over our expected 52 million dollars, thanks largely to operational leverage and strong revenue growth.

Positive factors: 1 We expect that the Qihoo four fiscal quarter search advertising revenue for 38 million U.S. dollars, the chain growth of 34%, accounting for 17% of the total revenue, and the third quarter of the proportion of 15%. 2 based on our calculations, mobile-related revenue accounts for 17% of total revenue, compared with 13% to 14% in the third quarter. 3 Mobile Security Users, navigation page users and click Traffic rose by 31% to 126% respectively. 4) Qihoo predicts that the first quarter of the fiscal year 2014 will grow by 2% to 3%, with a year-on-year increase of 106% to 107%.

Negative factors: The monthly number of active PC users is 475 million, only 4% year-on-year growth, slightly lower than the internet penetration rate. In December 2013, Qihoo's PC penetration rate was 94.6%, compared with 96.5% a year ago.

Valuation: We continue to maintain the "overweight" rating of Qihoo 360, raising the target share price from $95.30 to $135.