Another stellar report from Baidu (BIDU) last evening, as the decision by Google (GOOG) to back away from the Chinese market due to censorship issues a year and a half ago continues to beneft this company, along with organic growth of the Chinese internet space.
Technically the stock was essentially at a double top going into earnings; from which it will be breaking over on this morning's 6%ish gap up. Multiple analysts are out this morning raising price targets to $200 or more.
Full report here.
- Baidu, China’s biggest Internet company by market value, forecast third-quarter revenue that surpassed analysts’ estimates as customers spend more on search- engine advertising in the world’s second-biggest economy.
- Revenue will rise to between 3.95 billion yuan ($613 million) and 4.05 billion yuan in the three months to Sept. 30, Baidu said in a statement yesterday. The Beijing-based company’s guidance beat all 11 analyst estimates compiled by Bloomberg.
- The stock has gained 62 percent this year after more than doubling in 2010.
- Second-quarter net income almost doubled to 1.63 billion yuan ($252.6 million, or 72 cents per share) from 837.4 million yuan a year earlier, Baidu said. That beat the 1.5 billion yuan average of analyst estimates compiled by Bloomberg. Revenue rose 78 percent to 3.4 billion yuan ($528.4 million).
- “The search-engine market potential is huge,” Chief Financial Officer Jennifer Li said in an interview with Rishaad Salamat on Bloomberg Television’s “Asia Edge” today. Baidu’s business is generating “a lot of cash” that could be re- invested by the company to sustain growth, she said.
- Baidu expects to gain users by adding new products such as a Web browser and social-networking services, CEO Li said in a conference call with analysts today.
- Average spending per customer rose to 11,500 yuan last quarter, a 53 percent increase from a year earlier, CFO Li said. Revenue from customers in the electronic-commerce industry more than doubled in the quarter, she said.
- Baidu accounted for 75.9 percent of China’s search-engine market by revenue in the second-quarter, rising from 75.8 percent in the previous three months, according to research company Analysys International. Google’s share dropped to 18.9 percent from 19.2 percent, the researcher said.
- Google has been losing ground in China’s search-engine market since January 2010, when the Mountain View, California- based company said it was no longer willing to comply with Chinese regulations requiring it to self-censor Web content. Two months later, the U.S. company shut its Google.cn service and redirected Chinese users to its site in Hong Kong.