Qihoo Going VoIP: Negative Implication For Chinese Telcos
- QIHU has introduced a VoIP app that allows only one user have the app to make the phone call.
- Chinese telcos will see ongoing voice/text revenue erosion from entries by Chinese internet companies.
- Long QIHU and short CHL.
Did Qihoo 360 JV Partner Coolpad Ship Phones Bundled With Malware?
- Recent reports from a US-based security firm claim to have found serious malware in Coolpad Phones.
- Qihoo has built a reputation on security; did it trust the wrong partner?
- What does that mean to the recently announced JV?
- Qihoo announced a joint venture with Chinese original equipment manufacturer Coolpad.
- All phones produced by the JV will have Qihoo's software pre-installed.
- This partnership should help Qihoo expand into mobile search, an area that has been a point of emphasis for the company.
- QIHU and Coolpad entered into a JV in which QIHU will invest $409m for a 45% stake in a Coolpad online subsidiary.
- The JV will focus on designing, manufacturing and selling affordable/quality handsets and embedding QIHU's mobile internet services.
- Expect QIHU's ecosystem to take off. Negtaive implication for Baidu. Neutral on BABA and Tencent. Potential negative for Xiaomi.
- Qihoo paying $410MM for 45% stake, focus on software and marketing.
- After earlier attempts testing the hardware waters, the company is diving in.
- Given challenges facing the company, is this a good idea, now?
Qihoo Pursuing Vertical Integration: Is Coolpad The Answer?
- Techweb reported that QIHU is looking to acquire a Shenzhen-based smartphone maker. Shenzhen-based Coolpad saw shares halted pending news release.
- The acquisition of Coolpad immediately gives QIHU an asset with solid distribution, brand and competitive hardware.
- QIHU seems to remain focused on building its own ecosystem, more so than BABA, BIDU and 700HK.
- Qihoo 360 trades at $75 a share, with a market capitalization of just $9 billion.
- WhatsApp was purchased for over $20 billion for its 600 million users; Qihoo's security user base is much larger.
- Baidu has a market capitalization over $85 billion, but Qihoo has consistently stolen market share and now has half Baidu's search share.
- Qihoo is now launching monetization tools for search, which should have a profound effect on the business.
- Given Qihoo's large user base in two different segments, combined with future monetization efforts, $75 is too cheap.
- Qihoo has initiatives to guide higher on revenues and margins.
- Search revenue growth will accelerate next year.
- Extremely cheap valuation with approximately 18% of its market cap in cash and equivalents.
- Qihoo reported Q3 earnings and revenue ahead of views.
- Margins remain under pressure on higher spending and changing product mix.
- Management guided Q4 revenue above analyst consensus.
- Reiterating my bullish view on Qihoo, the stock is a bargain at a forward 2015 P/E of 17.
Qihoo Q3 2014 Review: Still A Rising Star In Mobile Internet
- Qihoo beat in Q3 on both revenue and EPS.
- Search may have decelerated sharply in the quarter, but IVAS more than offset the weakness.
- Operating metrics holding up. Search could see a recovery in Q4.
- The share price fell 38.3% between August and October as investors reallocated capital to the Alibaba IPO. This external reason for the fall presents an investment opportunity.
- Qihoo’s management focuses on building its user base through free services, which can be monetized later. The potential for further monetization is much greater than its rivals.
- Search traffic market share is 30%, whilst market share in terms of revenues is just 2.9%. Search monetization has been very conservative, but the acquisition of MediaV should improve this.
- Despite losing, Qihoo’s legal battle with Tencent seems to be over. This should reassure investors as the public spat has been a distraction for five years.
- Qihoo’s management sees great potential in the enterprise security industry, and will leverage their market leading status in personal security applications.
Qihoo Q3 2014 Preview: Mobile Competition Heating Up; Corporate Security The Long-Term DriverWestEnd511 • Nov. 25, 2014
- QIHU to report on Monday after market close.
- Mobile competition heating up on both the app store and search side.
- Corporate security is the long-term driver.
- Qihoo stock closed Thursday at $67.60 a share, well below its 52 week high.
- I wrote a bullish article last month saying that the stock was a very good buy. The stock price was around $67 then as well.
- I still think the stock is very cheap and that buying now can lead to high returns in the future.
Qihoo Q3 Earnings Preview: Why Company Looks To Prove Analysts Wrong Once Again
- Analysts' recent price cuts still offer investors with more than 50% in upside potential.
- Qihoo has met or exceeded analyst estimates for the last eight quarters and looks poised to keep that streak going.
- Why I'm a buyer before earnings are released next week.
- Qihoo was recently slammed in a Barron's article without much analysis of the argument.
- Management has addressed worries over margin pressures.
- A $200M share buyback points to management's confidence in their strategy.
- Since reporting Q2 results, shares of Qihoo 360 have lost almost 35% of their value.
- Were earnings really bad enough to justify this share price implosion?
- The future looks bright and investors should take advantage of the buying opportunity.
Nov. 24, 2014, 5:40 PM
- Qihoo (NYSE:QIHU) expects Q4 revenue of $410M-$415M, above a $405.1M consensus.
- While top-line performance remains strong, gross margin remains under pressure: It fell to 77.3% in Q3 from 79.1% in Q2 and 86.2% a year ago. Last quarter, Qihoo suggested search monetization costs and product mix changes were pressuring margins.
- Also: Opex rose 110% Y/Y (above rev. growth of 100%) to $200.1M, due to a 226% increase in sales/marketing spend to $91.5M.
- Total monthly active users of Qihoo's PC products amounted to 495M in September, down 1M Q/Q and up 30M Y/Y. Users of Qihoo's Mobile Safe app rose by 32M Q/Q and 265M Y/Y to 673M. Daily unique visitors to Qihoo's browser start page averaged 129M vs. 128M in Q2 and 126M a year ago.
- The company says its 360 Mobile Assistant Android app store (competes against Baidu and Tencent) continues to lead the Chinese market, and that it has received "very encouraging responses" to display and search ad platforms launched at the end of Q3.
- QIHU nearly unchanged AH. Q3 results, PR.
Nov. 24, 2014, 5:01 PM| 2 Comments
Nov. 23, 2014, 5:35 PM
Aug. 25, 2014, 1:11 PM
- Though Qihoo (NYSE:QIHU) beat Q2 estimates and offered above-consensus Q3 sales guidance, its gross margin fell to 79.1% from 79.5% in Q1 and 88.3% a year ago. In addition, opex rose 19% Q/Q and 114% Y/Y to $208.3M on the back of a 254% Y/Y increase in sales/marketing spend.
- Online ad revenue +22.3% Q/Q and +89% Y/Y to $171.3M thanks to search and mobile ad growth. Internet value-added service revenue +17.2% Q/Q and +140% Y/Y thanks to PC/mobile gaming growth.
- Total monthly active users of Qihoo's PC products totaled 496M in June, up from 497M in March and 461M a year ago. Smartphone users of Qihoo's 360 Mobile Safe app rose to 641M from 538M in March and 338M a year ago.
- Daily unique visitors for Qihoo's 360 browser home page grew to 128M in Q2 from 122M in Q1 and 114M a year ago. Average daily clicks for the page grew totaled 749M, up from 590M a year ago but down from 772M in Q1.
- Citi estimates PC search revenue (boosted by share gains) rose 52% Q/Q to $62M (20% of total revenue), and that mobile revenue rose 16% Q/Q to $68M, with 67% coming from games. At the same time, it expects heavy spend to result in op. margin falling to 25% in 2014 from 34% in 2013.
- Q2 results, PR
Aug. 24, 2014, 11:11 PM
Aug. 24, 2014, 5:30 PM
Jul. 25, 2014, 5:32 PM
- Goldman has raised its 2014-2016 Baidu (BIDU +10.9%) EPS estimates by 17%-23% following its sizable Q2 EPS beat and above-consensus Q3 guidance, and hiked its target by $35 to $260. BofA/Merrill, Deutsche, and Piper have also raised their Baidu PTs.
- Goldman was pleased with several datapoints provided in the Q2 report and CC (transcript). Among them: 1) Baidu topped 500M mobile search monthly active users (MAUs) in June. 2) Maps MAUs have passed 200M. 3) Baidu's app distribution platforms (led by 91 Wireless) averaged 130M downloads/day in Q2. 4) The Nuomi daily deals unit (acquired from Renren) has seen its user base double since Q4.
- BofA/Merrill observes Baidu's aggressive spending growth is now being fueled more by hiring than by marketing spend, something it expects will translate into future leverage. Marketing spend fell to 11.5% of revenue from 14.1% in Q1, while R&D grew to 14.6% from 13.6%.
- Baidu made fresh highs today, and provided a lift to rivals Qihoo (QIHU +3.7%) and Sohu (SOHU +2.2%) along the way.
Jun. 11, 2014, 2:39 PM
- Acquisition-hungry Alibaba (ABABA) is buying the 1/3 of top Chinese mobile browser vendor UCWeb it doesn't yet own for a mixture of cash and stock. The price hasn't been disclosed, but Alibaba claims the deal is the biggest Chinese Web merger in history, exceeding Baidu's (BIDU +0.4%) $1.9B purchase of app store provider 91 Wireless.
- UCWeb has a 50%+ share of the Chinese mobile browser market, and also has 35% of the Indian market. The company claims 500M total browser users, as well as 50M users for its Android app store, which competes against Baidu and Qihoo's (QIHU +3.8%) popular stores.
- More importantly for Baidu (and also relevant for Qihoo), UCWeb claims a 20%+ share of the Chinese mobile search market on the back of 100M active users. A mobile search JV was launched with Alibaba in April.
- Meanwhile, CNBC reports Alibaba will likely file a new F-1 early next week that includes its Q1 results. Odds are Yahoo (YHOO +0.6%), which has been reporting Alibaba's results a quarter in arrears, will move on the numbers.
- CNBC adds Alibaba is still expected to go public in the first week of August. Bloomberg previously reported Alibaba is eying an Aug. 8 IPO.
May. 27, 2014, 6:32 PM
- Qihoo (QIHU) expects Q2 revenue of $300M-$305M, well above a $270.2M consensus.
- Q1 results trounced estimates on the back of a 120.9% Y/Y increase in ad revenue to $140M, and a 172.2% increase in value-added service (largely gaming) revenue to $124.8M.
- Improving search/mobile monetization contributed to the ad growth. Qihoo notes it's now estimated to have 25% of the Chinese search market, up from 23% in Q4; the company has been aiming for a 30% share by year's end.
- Total users of Qihoo products/services rose by 4M Q/Q and 38M Y/Y to 497M. Users of Qihoo's 360 Mobile Safe app rose another 13% Q/Q and 96% Y/Y to 538M.
- Daily unique home page visitors rose by 3M Q/Q to 122M, after slipping by 7M in Q4. Average home page daily clicks rose by 91M Q/Q to 772M.
- Gross margin fell to 79.5% from 87.4% a year ago. Opex rose 101% Y/Y to $155.2M.
- Q1 results, PR
May. 27, 2014, 6:03 PM| 2 Comments
May. 26, 2014, 5:35 PM
May. 7, 2014, 10:50 AM
- Has irrational exuberance given way to panic selling? Internet stocks are off again today, as the Street registers disappointment with earnings reports from AOL, Groupon, Zulily, SouFun, 500.com, and King.
- Yahoo (YHOO -6.2%) has fallen below $35 as the Street digests Alibaba's IPO filing. Twitter (TWTR -4.4%), crushed yesterday following its lockup expiration, briefly cracked $30 before rebounding a bit.
- Other decliners: QIHU -8.9%. BITA -7.2%. GOMO -7%. TRLA -5.2%. MELI -4.7%. ANGI -4.6%. Z -4%. YOKU -5.5%. CTRP -5.3%. WUBA -5.3%. JOBS -5.1%. GRUB -4%.
- Internet/social media ETFs: PNQI, SOCL, FDN
Apr. 24, 2014, 4:50 PM
- Baidu (BIDU) expects Q2 revenue of RMB11.82B-RMB-12.11B ($1.901B-$1.948B), above a consensus of RMB11.55B.
- Revenue growth accelerated to 59.1% in Q1 from 50.4% in Q4. Online ad customers fell 1.1% Q/Q to 446K after falling 2.8% in Q4, but revenue per ad customer remained steady Q/Q and rose 44.1% Y/Y to RMB20.9K ($3,362).
- As promised, Baidu continues to invest aggressively: SG&A spend soared 136.9% Y/Y to $323.2M, thanks in large to mobile promotional efforts. R&D spend rose 57.5% to $205.4M.
- Traffic acquisition costs rose to 12.4% of revenue from 12.3% in Q4 and 10.2% a year ago. Content costs (fueled by online video licensing) rose to 4.1% of revenue from 3.8% in Q4 and 1.6% a year ago.
- Up in sympathy: SINA +1.6%. SOHU +1%. QIHU +2.6%. YY +1.1%. WB +1.5%. YOKU +1.7%.
- Q1 results, PR
Mar. 6, 2014, 5:37 PM
- Qihoo (QIHU) expects Q1 revenue of $226M-$228M, well above a $203M consensus.
- Online ad revenue soared 113% Y/Y to $142.4M after growing 107% in Q3. Search ads, mobile ads, and better monetization of Qihoo's 360 browser home page were responsible. Citing 3rd-party data, Qihoo says its search share rose to 23% during Q4.
- Internet value-added service revenue rose 124% to $78.9M after growing 163% in Q3. PC and mobile games fueled the increase.
- Total users of Qihoo's products/services rose 10M Q/Q and 19M Y/Y to 475M. Smartphone users of Qihoo's 360 Mobile Safe app rose 14% Q/Q and 126% Y/Y to 467M.
- One possible area of concern: Daily unique browser home page visitors averaged 119M, up 28M Y/Y but down 7M Q/Q. Home page daily clicks averaged 681M, up 231M Y/Y but flat Q/Q.
- Opex soared 60% Y/Y to $109.6M, as Qihoo continues investing heavily in both sales and R&D.
- A lot of good news was priced in.
- Q4 results, PR
Mar. 6, 2014, 5:06 PM| 2 Comments
Mar. 6, 2014, 12:10 AM
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