Morgan Stanley has upgraded SouFun Holdings to Overweight prompting a 4.2 per cent share price boost and a $7 target.

The Chinese online real estate services firm, which owns Fang.com is at its highest levels since January, perhaps supported by the strength in Chinese equities with Shanghai closing up 2.2 per cent last night.

SouFun shares have been gradually moving higher since mixed results were posted for the fourth quarter in late February.

The company announced an increased revenue of 35 per cent year-on-year to $300.7 million in Q4 which it said was partially offset by the decline in revenue from marketing and listing services.

Its increase in revenue for the quarter was primarily driven by the growth in e-commerce services, which increased by 76 per cent year-on-year to $173.8 million.

SouFun says it also saw significant growth in its direct sales services for new homes.