T.H. Capital Raises PT on Qihoo Following Solid Q4 Results

In a report published Monday, T.H. Capital, LLC analyst Tian Hou maintained a Buy on Qihoo 360 Technology QIHU and raised the price target from $123.00 to $139.00 following fourth quarter results. Hou noted that Qihoo's search monetization is likely to accelerate in 2H2014. The analyst remarked on the “significant gap” between the company's traffic share and revenue share. T.H. Capital reported that search traffic share reached 24.6 percent in February 2014, but search revenue remains small compared with Baidu. The analyst reported that Qihoo built an agency to market and sell its search to small and medium enterprises (SMEs) over the past year. T.H. Capital commented that the main driver of Qihoo's business will be the growth of customers. Qihoo announced that mobile game and app distribution together grew 20 percent in the first two months of the fourth quarter in 2013. T.H. Capital's data describes that the average cumulative downloads for mobile games in Qihoo's app store may have 9.8 percent growth from 4Q13 to reach 3.24 billion. Hou added, “We believe Qihoo's growth momentum in both mobile game and mobile app distribution can continue throughout the year as smart phone adoptions in China are just starting to ramp up.” Shares of Qihoo 360 Technology closed at $118.31 on Monday.