Sohu.com (NASDAQ: SOHU) operates the leading Internet portal in China providing several top branded websites and search engines. These consist of their mass portal of online media Sohu.com, search engine Sogou.com, a top real estate website (Focus.cn), the number one online games information portal (17173.com), the number one online alumni club (Chinaren.com), a wireless service provider (Goodfeel.com), and an online map service provider (Go2map.com).
Sohu.com reported second quarter record high revenues for the period ended June 30, 2008 of $102 million, up a mammoth 162% from $39 million for the period ended June 30, 2007. Net income for the second quarter 2008 increased an astounding 604% or sevenfold to $40.2 million from $5.7 million in the second quarter 2007. The Company has as of June 30, 2008 a substantial $226 million in cash which is 53% of their assets and almost two times their total liabilities of $116.5 million.
Sohu also announced while reporting its second quarter 2008 earnings that it plans to submit confidentially to the U.S. Securities and Exchange Commission (SEC) a draft registration statement for a possible initial public offering (IPO) of American Depository Receipts (ADSs) of Changyou.com Limited, their online games business subsidiary. The total number of shares and total dollar amount of the offering has yet to be determined.
Sohu.com recently signed an agreement with CCTV.com. China's Official Internet/Mobile Broadcaster of the Beijing Olympic Games. Under the agreement Sohu will be awarded the new media rights to Internet broadcasting for the Olympics.
Sohu.com closed on Friday August 1, 2008 at $79.21, down 13.4% from its fifty-two week high of $91.50. The stock sells at a price earnings multiple of 60 but appears to be reasonably priced based on its meteoric revenues and earnings growth rates. Sohu.com is a classic pure growth stock and a terrific way to invest in China's vast gargantuan Internet market.
References:
http://corp.sohu.com/20080728/n258425872.shtml
Company Second Quarter 2008 Earnings Release
http://corp.sohu.com/20080616/n257535955.shtml
Sohu.com Awarded Rights to Offer Live Webcasts and Video-On-Demand of 2008 Beijing Olympics
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