Morgan Stanley maintains Qihoo 360 overweight rating

Beijing time August 25 Morning news, Morgan Stanley today released a study to maintain the 360 (Nyse:qihu) stock "overweight" rating.

The following is a summary of the report:

Second-quarter earnings exceeded expectations: revenue for 318 million U.S. dollars (20% on the chain, an increase of 110% per cent), beyond the 300 million to 305 million U.S. dollars in the guidance forecast cap, more than 309 million dollar analyst average expected 3%, mainly benefiting from strong search and mobile commercialization projects. NON-GAAP (non-US general accounting standards) operating profit of 69.7 million U.S. dollars (year-on-year growth 28%), NON-GAAP operating profit rate of 21.9%, lower than the same period last year 36%. Non-gaap net profit of 69.2 million U.S. dollars, an increase of 36%. Per-Share ads (US depository shares) diluted earnings of 0.30 U.S. dollars (Non-gaap to 0.52 U.S. dollars), more than 0.266 U.S. dollar analyst average expectations.

Revenue growth is strong: Qihoo 360 in the second quarter of the fiscal year, net advertising revenue of 171 million U.S. dollars, higher than the previous quarter of 140 million U.S. dollars and the same period last year 91 million dollars. Revenue from Internet value-added services rose 140% to $146 million, up from $125 million in the previous quarter.

Big investment: Gross profit margin decreased by 2% per cent, down 9% to 79%. NON-GAAP operating profit rate shrank 1%, the year-on-year contraction of 14%, to 21.9%, mainly because in the increasingly competitive industry to continue to strengthen the brand and market position, and marketing costs and personnel costs launched a substantial investment.

The outlook for the third quarter was strong: Qihoo 360 was expected to have a third-quarter revenue of 360 million to 365 million dollars (an average of about 360 million US dollars), with a quarter-on-quarter growth of 13% to 15%, up 92% to 94%.

Second quarter operating indicators: 1 PC products monthly active total number of users reached 496 million, the chain growth of 4%, the year-on-year growth of 8%. 2 The number of active users of the browser reached 339 million, the chain growth of 2%, the year-on-year growth of 5%. 3 Mobile security products, the total number of smartphone users reached 641 million, the chain growth of 19%, the year-on-year growth of 90%. 4 The daily active user of the personalized start page is 128 million, the chain growth of 5%, year-on-year growth of 12%, day clicks 749 million times, the chain growth of 27%, but the chain to reduce 3%; Independent user access the number of page hits per day is 5.9, the previous quarter was 6.3, and the same period was 5.2 times last year. 5 Internet search traffic share more than 30% days ago. (Ding Macro)