Barclays Equity Research released a new report on Baidu Inc (ADR) (NASDAQ:BIDU) yesterday. Baidu is the leading Internet search provider in China, the Google of China if you will, and has been enjoying stellar growth and price appreciation over the last few years. Like most companies in emerging industries, Baidu’s stock price has been volatile, but it has made a major move up in the last few months.
Baidu Inc (ADR) (NASDAQ:BIDU) is clearly the dominant Internet search player in China. A recent report released by Analysys International noted Baidu enjoys a combined 72% market share including PC and mobile devices. Barclay’s also points out there is no obvious number-two player that is dominant in both PC and mobile search, given that Qihoo 360 Technology Co Ltd (NYSE:QIHU) is second in PC and Sogou Soso is second in mobile.
Cementing mobile dominance
In a meeting with Barclays analysts, Baidu Inc (ADR) (NASDAQ:BIDU) Senior Investor Relations Manager Sharon Wu highlighted Baidu’s three initiatives in mobile: 1) core mobile search – moving along well with positive customer feedback; 2) Map/LBS – making progress with partners but monetization still a couple of quarters away; 3) App distribution – very strong with Baidu + 91 Wireless app store reporting more than 80 million downloads daily (No. 1 in China).
Upcoming catalysts
Barclays points to the impending monetization of maps and location-based services as a significant catalyst over the next few quarters for Baidu Inc (ADR) (NASDAQ:BIDU). While it is difficult to estimate sales figures with no hard data, Barclays’ analysts said they do expect to have to revise earnings estimates upwards in the near future as the company begins to provide initial sales information.
Barclays rating
“Steady as she goes” sums up Barclays’ current point of view on Baidu. The report reiterated their standing Overweight rating for the stock, and stuck with their 12-month price target of $198. Baidu Inc (ADR) (NASDAQ:BIDU) is trading at $178.05, down $1.88, at 10:50 am EST
