Qihoo 360 Technology Co. (QIHU:US), owner of China’s most-popular Web browser, jumped the most in four months after third-quarter sales forecasts beat analysts’ estimates.
The company’s American depositary receipts surged 11 percent to a three-month high of $23.47 as of 11:59 a.m. in New York, gaining for a third day. They jumped as much as 18 percent earlier, the biggest intraday increase since April 19.
Beijing-based Qihoo said yesterday third-quarter revenue will rise as much as 73 percent from a year earlier to $82 million, after jumping 107 percent to $72.8 million in the previous three months. The company’s estimate beat (QIHU:US) the average $80.3 million projected by seven analysts surveyed by Bloomberg.
Qihoo, which develops computer security software and desktop products, started a new search engine last week, entering a market that is 80 percent dominated by Baidu Inc. The company aims to be a “major player” in China’s online search market in the long term, Chief Executive Officer Zhou Hongyi said on a conference call yesterday. The search engine will target customers of its Web browsers and its hao.360.cn online directory, Zhou said.
“We are impressed by the strong debut of Qihoo’s search and believe it has significant opportunity in China’s large search market,” Henry Guo, an analyst at ThinkEquity LLC, wrote in a note today. “Qihoo is well-positioned and we see significant monetization potential going forward. However, we don’t expect any meaningful search revenue contribution until second-half of 2013.” He maintained a buy rating on the stock.
A survey on Sina Corp.’s Weibo social media platform showed 14.2 percent of the 1,332 voters would choose Qihoo’s search engine, the second among the five most popular Chinese search engines, Stifel Nicolaus & Co. said in an Aug. 20 report. Baidu got 76.5 percent of the votes.
Qihoo’s second-quarter profit fell 37 percent to $7 million, according to its statement yesterday, trailing analysts’ forecasts of $9.1 million.
Cynthia Meng, a Hong Kong-based analyst at Jefferies Group Inc., raised the price target for Qihoo ADRs to $35 from $23 today, while Echo He at Maxim Group lifted her price estimate to $25 from $21.
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