(Chinavestor) November 2012 CV_BIDU_2012_Q2-1.pdf . Hold Rating
We suggest our Hold rating on Baidu.com Inc. (NASDAQ:BIDU). BIDU is a leading search engine service provider with largest market share in China. It has strong financial and cash flow positions, with excellent compounded EPS growth rate in the last five years. However, its business is currently being challenged in two areas. First, its PC side business is facing the most severe competition from Qihoo 360 (QIHU), who is a Chinese internet service providing company, since Google had decided to direct the searching requests from Chinese users to Hong Kong. In addition, BIDU is trying to expand its services in mobile market but the revenue from mobile side is still very small according to its CEO, Robin Li. BIDU’s market share, as well as revenue and profit in the next coming quarters should be analysed to determine the influence of QIHU’s new search services on its business.