Long/short equity, Growth, contrarian

Cheetah Mobile: Will The Real Clean Master Please Stand Up?

In conjunction with my initiation on Cheetah Mobile (NYSE:CMCM) (Please see my note: Cheetah Mobile: This Cat Has A Long Way To Go; Initiating With $16 Target, 24% Downside), I conducted a deep analysis on the mobile cleaner market.

My conclusion is that despite having over 223m mobile MAUs (of which 140m belongs to the "Clean Master"), CMCM does not have a meaningful competitive advantage in the mobile cleaner space due to the lack of technological sophistication behind the product. As such, I do not see CMCM has the ability, the financial resource and the brand advantage to compete against Qihoo (NYSE:QIHU), Baidu (NASDAQ:BIDU) and Tencent in China. As for the international market,...

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