A week and a half after Chinese search engine Baidu beat Q2 sales and profit estimates, and forecast above consensus, UBS Securities analyst Wenlin Li today raised the stock’s rating to “Neutral” from “Sell” and more than doubled its price target on the stock to $380 from $150.
I have mentioned Google’s music-related activities in China a few times during the past two years; and just yesterday this topic seems to have heated up considerably.
Baidu shares are getting a boost this morning from Deutsche Bank analyst Alan Hellawell, whose “blue-sky scenario” for the Chinese search giant yields a valuation of $432. He notes that the market is still nascent, and should grow 37 percent through 2012.
China today is reportedly shutting down about 10,000 unregistered and unapproved Web sites, most of them operated by small businesses, according to Piper Jaffray analyst Gene Munster. He says that “multiple Chinese media sources” last night discussed the push to clean up unwanted Internet sites.
Bernstein analyst Jeffrey Lindsay is bullish on China-based companies Baidu and Sohu. He says that recent fears about the Chinese market–fueled by the economy and recent Web controversies–are unfounded. Lindsay believes that even in an economic slowdown, there’s enough growth in the domestic market to fuel both companies.
Citing ComScore data from last night’s search engine results for November, Thomas Weisel analyst Christa Quarles concludes that “Google continues to gain audience market share from its competitors and dominates the rankings globally while both Yahoo! and Microsoft continue on a downward trend.”
Shares in Baidu, the Chinese search engine, have jumped today after Goldman Sachs analyst James Mitchell raised his rating on the stock, while maintaining his recently reduced price target. Mitchell offers a variety of reasons for his more bullish stance–not the least of which is his estimation of a 30 percent yearly increase in search spending in China for the next several years.
China-based Baidu’s earnings estimates have dropped sharply following the recent controversy involving the company’s connection to some unlicensed medical firms via search-related advertising. One Hong Kong analyst dropped his earnings forecast by five percent for this year and 19 percent for 2009.
Baidu, the Chinese analog of Google, is fighting allegations that it has been allowing unlicensed medical groups to purchase the most popular keywords and appear high up in search results. (The offending listings have since been removed.) The company has also been accused of removing unpaid users who decline to become paid users by purchasing keywords. Obviously, there is also a Chinese analog of “The Godfather.”
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