Mon, May 11, 2:37 PM
- The Shanghai exchange rose 3% overnight, continuing a torrid 2015 after the PBOC slashed its benchmark rate by 25 bps in a fresh easing move. A slew of Chinese Internet/mobile names are rallying while the Nasdaq barely budges.
- Gainers include Qihoo (QIHU +3.3%), Weibo (WB +3.4%), SouFun (SFUN +7.2%), Renren (RENN +3.1%), Cheetah Mobile (CMCM +10.6%), ChinaCache (CCIH +7.3%), Autohome (ATHM +4.9%), Xunlei (XNET +7.2%), Jumei (JMEI +7.3%), and Changyou (CYOU +6%).
- The massive rallies occurring in the absence of major company-specific news (particularly for thinly-traded names) have triggered comparisons with the Dot.com bubble. However, many U.S.-traded firms remain well below their 2014 highs, and their forward P/E and P/S multiples (though often not cheap) are generally well below those sported by Dot.com-era darlings.
Tue, May 5, 2:51 PM
- The high-flying Shanghai exchange was down 4.1% overnight amid reports local brokerages are tightening margin requirements. Over in NYC, the Nasdaq is down 1.6%, leading a broader market selloff.
- That's proving a bad combo for Chinese Internet stocks, many of which have shot higher in recent weeks. Major decliners include Qihoo (QIHU -8.9%), Sky-mobi (MOBI -10.6%), Leju (LEJU -6%), E-House (EJ -4.7%), Qunar (QUNR -4%), and Renren (RENN -4.6%).
- Baidu is also off sharply, thanks in part to a JPMorgan downgrade. Alibaba, which reports on Thursday, is seeing more modest losses.
- ETFs: KWEB, CQQQ, QQQC
Wed, Apr. 8, 10:58 AM
- Following a big overnight rally in Hong Kong (followed a 3-day holiday during which Shanghai rallied), beaten-down Chinese Internet and mobile stocks have soared in U.S. trading.
- The biggest gainers include many names that are far below their 2014 highs: The group includes Qihoo (QIHU +10.5%), YY (YY +14.9%), Taomee (TAOM +14.3%), Sina (SINA +8.7%), and Weibo (WB +12.1%). Mobile game publishers Sky-mobi (MOBI +12.6%), China Mobile Games (CMGE +8%), and iDreamSky (DSKY +13.4%) are also sharply higher, as are online real estate plays SouFun (SFUN +13.1%), E-House (EJ +6.1%), and Leju (LEJU +9.8%).
- Giants Alibaba (BABA +3.4%) and Baidu (BIDU +4.1%) aren't being left out. Neither are Youku (YOKU +7.5%), 21Vianet (VNET +7.4%), Momo (MOMO +6.8%), Sohu (SOHU +7.7%), Changyou (CYOU +4.5%), Dangdang (DANG +7.3%), Vipshop (VIPS +4.8%), JD.com (JD +3.9%), Jumei (JMEI +6.6%), Sungy Mobile (GOMO +5.8%), China Techfaith (CNTF +7.1%), and KongZhong (KZ +5.5%).
- Alibaba has proposed an asset injection into its money-losing Alibaba Pictures (+36% in Hong Kong) film arm. Sky-mobi has seen Rosenblatt (Buy) hike its target to $11, while noting many Chinese mobile game developers have been bought out; it thinks Sky-mobi's investments in developers could be worth $140M. NetEase has been upgraded by CICC Research.
- Over in Hong Kong, software/cloud services provider Kingsoft (OTCPK:KSFTF) rose 24.2% to HKD$29.50. Messaging/gaming giant Tencent (OTCPK:TCEHY) rose 3.3% to HKD$154.80.
- ETFs: KWEB, CQQQ, QQQC
Wed, Mar. 25, 10:58 AM
- Baidu (NASDAQ:BIDU) and top search rival Qihoo (NYSE:QIHU) are selling off in early trading. The Nasdaq is down 0.6%, and the Shanghai exchange fell 0.8% overnight.
- Possibly hurting the companies: The health industry chamber of commerce for the city of Putian (a major healthcare services hub) has ordered its members to stop buying medical ads.
- Trader Marc Lehman observes 20% of Baidu's revenue comes from medical ads. HSBC reported last year Putian businessmen run at least 8K of the 10,877 private Chinese hospitals that existed nationwide as of Oct. '13 (per government data).
- Separately, Chinese tutoring services provider Xueda (XUE) has announced the creation of an online education JV with Qihoo. The JV, known as Sunshine Rabbit Technology, currently has less than $5M in registered capital.
- Last week, Bloomberg reported Sohu/Tencent's Sogou search unit is planning an IPO with a $3B+ valuation. That arguably reflects well on Qihoo, which had an estimated 17.3% Q4 search share to Sogou's 6.9% (Baidu was at 74.4%), and whose Web/mobile empire is assigned a total current market cap of $6.3B.
Fri, Mar. 20, 3:02 PM
- With the Nasdaq up 0.9% (and nearing its March 2000 highs) amid a market rally, major tech gainers are easily outnumbering major decliners.
- Following a 1.4% overnight rally in Shanghai, strong Q1 guidance from Ctrip, and a report that Sohu/Tencent's Sogou search engine is planning an IPO, a slew of Chinese tech names are posting big gains. Aside from Ctrip and Sohu, notable gainers include search/browser/security app provider Qihoo (QIHU +4.9%), sports lottery site 500.com (WBAI +12.5%), auto sites Bitauto (BITA +4.2%) and Autohome (ATHM +4.9%), online retailer Vipshop (VIPS +4.7%), data center owner 21Vianet (VNET +6.7%), polysilicon maker Daqo (DQ +6.5%), and chat/dating app owner Momo (MOMO +4.6%).
- Other standouts include optical component vendor Oclaro (OCLR +9.6%), U.S. solar installer Solar3D (SLTD +10%), NFC reader maker On Track (OTIV +10.5%), printer maker Lexmark (LXK +3.7%), and big data/analytics software provider Hortonworks (HDP +10.2%).
- Notable decliners include VoIP hardware/software provider Sonus (SONS -6.1%), solar microinverter leader Enphase (ENPH -4.2%), and authentication hardware/software provider Vasco (VDSI -5.7%).
- Qihoo is adding to Wednesday's gains, while 500.com and 21Vianet are erasing recent losses. On Track is now up 21% over the last two days. Solar3D is adding to the gains seen yesterday following a contract announcement. Vasco had rallied strongly this week before today.
- Previously covered: Ambarella, Spherix, Envivio, Youku, Viggle, Castlight/Benefitfocus, Care.com, Ultra Clean, InterCloud, Perceptron, Violin Memory, Amtech
Fri, Mar. 20, 12:20 PM
- #3 Chinese search engine Sogou is planning an IPO that will feature a $3B+ valuation, Bloomberg reports. Sources add Sogou, which is controlled by Sohu (SOHU +3.7%), could see an offering in 2H15.
- Sogou has been easily outgrowing Sohu's portal and gaming ops: Its revenue rose 70% Y/Y in Q4 to $119M. It had an estimated 6.9% Q4 Chinese search share, trailing Baidu's (NASDAQ:BIDU) 74.4% and Qihoo's (NYSE:QIHU) 17.3%.
- Tencent (OTCPK:TCEHY) bought a 40.9% stake in Sogou in 2013 for $516M, and has integrated Sogou's services with its wildly popular WeChat mobile messaging platform (recently hit 500M MAUs). Aside from search, Sogou's services include a Web directory, games, and popular Chinese-language typing software (Sogou Pinyin).
Wed, Mar. 18, 11:43 AM
- Nomura has hiked its Qihoo (NYSE:QIHU) target by $4 to $69, while reiterating a Buy. The firm cites optimism about Qihoo's expansion into the enterprise security market.
- Meanwhile, Microsoft has announced Qihoo (along with Tencent, Xiaomi, and Lenovo) will help distribute Windows 10 in China following its summer launch. Notably, the OS will be provided as a free upgrade to users of both genuine and non-genuine (i.e. pirated) versions of Windows.
- Qihoo mentioned in its March 9 Q4 report enterprise security sales were better than expected. On the CC (transcript), co-CFO Alex Xu stated Qihoo's enterprise security sales totaled ~$20M in Q4 (their first quarter of revenue generation).
- CEO Hongyi Zhou argued NSA spying fallout will benefit Qihoo - "[A]s you may know, the Chinese government already make it very clear for the foreign security related companies, the foreign entities need to be out in this market." - and that the huge consumer reach of Qihoo's 360 security apps will make penetrating enterprises easier.
Tue, Mar. 10, 11:23 AM
- Up AH yesterday following its Q4 beat, Qihoo (NYSE:QIHU) has fallen to fresh 52-week lows today.
- JG Capital's Henry Guo thinks Qihoo's Q1 guidance (though above consensus) may have left investors wanting more. But he expects a 2H growth pickup.
- Guo: "While Q1 2015 guidance implies significant growth deceleration, we believe it is mainly due to seasonality (Web games and enterprise security) and lottery business disruption ... For the second half of 2015, we see multiple revenue growth drivers, including further desktop search monetization ramp-up, increasing medical/pharmaceutical search contribution, mobile search monetization traction and enterprise security revenue."
- Shares now go for 12x 2015E EPS and 9x 2016E EPS. Estimates have fallen slightly post-earnings.
Mon, Mar. 9, 6:37 PM
- In addition to beating Q4 estimates, Qihoo (NYSE:QIHU) is guiding for Q1 revenue of $375M-$380M (+41%-43% Y/Y), above a $374M consensus. Meanwhile, with a prior $200M buyback recently used up, a new $200M buyback has been authorized.
- After rising 110% Y/Y in Q3, operating expenses (non-GAAP) rose 84% Y/Y in Q4 to $201.2M (compares with 95% revenue growth), and were up less than 1% Q/Q. A mix shift towards and search ad and mobile revenue continues pressuring gross margin: It fell to 76.1% from Q3's 77.3% and the year-ago period's 86.4%.
- Search and mobile growth drove an 70.8% Y/Y increase in ad revenue to $243.2M. Mobile gaming growth led Internet value-added service (IVAS) revenue to rise 112.2% to $167.4M; PC gaming was weaker than expected. Enterprise security product sales (launched in Q4) were better than expected.
- Total monthly active users of Qihoo's PC products rose to 509M from Q3's 495M and Q4 2013's 475M. Smartphone users of Qihoo's Mobile Safe app rose to 744M from 673M and 467M. Average daily unique visitors to Qihoo's 360 browser start page rose to 132M from 129M and 119M.
- President Xiangdong Qi: "Both search and mobile app store businesses more than tripled [in 2014] and have ramped up faster than expected ... We are streamlining our monetization system into a fully integrated structure that seamlessly covers PC and mobile, and web and apps."
- QIHU +5.3% AH to $50.15. Shares remain down 28% from where they traded at the time of the Nov. 24 Q3 report.
- Q4 results, PR
Mon, Mar. 9, 6:02 PM
Sun, Mar. 8, 5:35 PM
Fri, Mar. 6, 10:21 AM
- Qihoo (NYSE:QIHU) is up sharply ahead of Monday afternoon's Q4 report. With 2.29M shares already traded, volume appears set to easily surpass a 3-month daily average of 2.46M.
- Pre-earnings short-covering could be helping Qihoo's cause: 9M shares (11% of the float) was shorted as of Feb. 13, and many of those shorts now have large paper profits.
- Last week: Qihoo announces $200M buyback is finished
Fri, Feb. 27, 10:03 AM
- A little less than 5 months after launching a $200M buyback, Qihoo (QIHU +1.4%) states the buyback has been used up. 3.4M shares were purchased at an average price of $58.98.
- Separately, the company has set a Q4 earnings date of March 9. Shares -31% since Qihoo provided a Q3 beat and strong Q4 sales guidance on Nov. 24. They now go for less than 13x 2015E EPS; the 2015 revenue growth consensus is at 48%.
Wed, Feb. 25, 2:57 PM
- A slew of Chinese Web/mobile firms are seeing heavy selling pressure on a day the Nasdaq is nearly flat. Search/security/browser/app store provider Qihoo (QIHU -3.9%) is among the decliners. As are game developer NetEase (NTES -5.8%), game publisher China Mobile Games (CMGE -3.7%), and online real estate plays SouFun (SFUN -3.7%), E-House (EJ -5%), and Leju (LEJU -3.3%).
- YY is also off today, as is 500.com, which disclosed sports lottery license suspensions from provincial authorities.
- Qihoo was hammered last week following a Jefferies downgrade. NetEase is a day removed from announcing it's setting up a U.S. HQ in Silicon Valley to build "a strong pipeline of mobile games for Western audiences from the ground up."
Thu, Feb. 19, 2:58 PM
- Today's notable tech gainers include fiber equipment provider Zhone (ZHNE +10.6%), IP licensing firm VirnetX (VHC +7%), healthcare software provider Allscripts (MDRX +4.8%), app development software provider Pegasystems (PEGA +6%), software outsourcing firm EPAM (EPAM +5.6%), security software/service provider Imperva (IMPV +5.3%), and cloud HR software provider Paylocity (PCTY +4.5%).
- Notable decliners include Chinese search/app store/security app provider Qihoo (QIHU -5.2%), Web hosting/cloud infrastructure provider Rackspace (RAX -3.9%), LED equipment maker Veeco (VECO -4.9%), and analog/mixed-signal chipmaker MagnaChip (MX -5%). The Nasdaq is up 0.4%.
- VirnetX is adding to the Wednesday gains seen after Apple patent review petitions were denied, and Qihoo is adding to the losses seen following a Jefferies downgrade.
- Rackspace and Veeco are reversing the gains they saw yesterday after posting their Q4 reports (I, II), and then some. MagnaChip is now down 58% since posting its Q1-Q3 results a week ago.
- Previously covered: SolarCity, Facebook, Castlight, Applied Materials, DragonWave, Nimble Storage, AVG, Ascent Solar, Netlist
Wed, Feb. 18, 11:26 AM
- Citing online gaming weakness, Jefferies has downgraded Qihoo (QIHU -6.8%) to Hold, and cut its target to $67 (still well above current levels).
- The Chinese gaming market has been intensely competitive for many years - Tencent remains its 800-lb. gorilla - and has also been contending over the last couple of years with a shift towards mobile gaming. Nonetheless, Qihoo's Internet value-added service revenue (mostly gaming-related) rose 157.7% Y/Y in Q3 to $172.8M, thanks in large part to mobile growth.
- Though it hasn't yet set an earnings date, Qihoo's Q4 report is expected to arrive in the coming weeks.
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