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在线翻译:
szdaily -> Markets
Sogou needs to prioritize profit search ahead of IPO
    2017-October-17  08:53    Shenzhen Daily

SLOWING revenue and falling profit don’t seem like great conditions under which to pursue an initial public offering (IPO). They certainly wouldn’t lend themselves to hopes of a valuation of 50 times earnings.

Sogou Inc., Sohu.com Inc.’s search engine business, lodged paperwork last week for a New York listing of American depositary receipts. Nestled in the filing are some basic financial numbers that allow potential investors a first glimpse at what they really have to offer.

In January, Sogou CEO Wang Xiaochuan said the spinoff from Sohu may be valued at US$4 billion to US$5 billion. He said that growing mistrust in rival search provider Baidu Inc. would help drive his business.

That’s quite a stretch. Baidu, China’s leading search provider, certainly suffered from setbacks last year as users and regulators cried foul over a series of medical advertisements. But data from Sogou’s filing show that monthly active user and revenue growth are both slowing, while operating profit is also going in the wrong direction.

Even bottomline growth looks weak. Six-month net earnings for the period through June climbed 41 percent, according to Sogou’s filing. At that same growth rate, full-year net would come in at around US$79 million, a figure still 20 percent below 2015 takings.

It’s important to note the relatively robust growth in the first half came from a lack of one-off items the period prior. Operating profit for the six months ended June 30 was down 27 percent from a year earlier.

(SD-Agencies)

 

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