UPDATE: Credit Suisse Initiates Sohu.com on Strong Hold in Internet Sector
In a report published Thursday, Credit Suisse analyst Dick Wei initiated coverage of Sohu.com (NASDAQ: SOHU) with an Outperform rating and PT of $98.
Credit Suisse noted that the current valuation of $2.7B is low, as SOTP valuation reports $351M for the portal sector, $300M for video business, $1.24B for online games, $1B for Sogou portion, and cash claim of $825M. SOHU maintains a top-3 ranking in online search, games, and portal in China. Wei commented, “We believe Sohu has good corporate governance and a stable management team who is willing to invest for the long term.”
Despite extreme online video competition, the analyst examined SOHU's strength of investing in exclusive contents such as the exclusive rights for Voice of China. Credit Suisse noted “management strengths in selecting exclusive content can help Sohu build a stronger entertainment video brand.”
SOHU closed at $73.86 on Wednesday. It is currently trading at a 3.7% increase after a spike to $77.30 Thursday morning.
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