BIDU has broken out of a bullish triangle formation. It is a buy in my book.
UPDATE (8:41 am MT):
Since Chinese stocks have recently been getting the “Mongolian homo hammer of death”, some are now selling at reasonable valuations—particularly the high quality names. (BIDU: 274.90 +2.54%) is one of them.
It goes without saying that BIDU is the GOOG of China. But it definitely has the home field advantage over search engines like Google and Yahoo.
Chinese is Greek to me. I don’t understand it. The language is too hard to speak. The Chinese alphabet is something like 1400 characters. These people are smarter than your average internet geek.
One big obstacle that search engines like Google and Yahoo have in China is censorship. The Chinese government doesn’t put up with YouTube media shit like, “transvestites bungee jump at Mardi Gras”. That won’t pass through the BIDU site.
BIDU is fully cooperating with the government’s censorship policies, which is for all purposes, impossible for the reprobates at GOOG and YHOO to comply with. Viz a vis [sic?], GOOG and YHOO are finding it harder and harder to gain market share in China’s regulated internet environment.
BIDU is the largest non-U.S. based website in the world. When Chinese people first start learning to use the internet, BIDU is often the first website they go to. A Computerworld survey of internet users in Shanghai and Beijing found that almost 80% of those polled preferred BIDU over GOOG. Baidu controls 24% of China’s online advertising, with GOOG at a distant 9%. It also controls 60% of China’s paid-search market, with GOOG at 26%.
For Q4:2007, BIDU reported net income of $30.5 million, or $0.87 cents per share, up 79% year-over-year. Yet, the stock got axed. Sales increased by 110% to $78.3 million for the quarter. It sold off.
Know this: by December 2007, it was estimated that China’s internet user population grew to 210 million, which puts it in second place behind the U.S., and slightly ahead of iBC viewers. Costs for broadband access in China have fallen more than 40% from 2003 levels to where subscribers are only paying about $8 a month now.
As more and more Chinese get connected, expect BIDU sales and earnings to continue to exceed expectations.
Disclaimer: Buying BIDU based solely on this summary puts you in the category of an “asshat”. Do your own research and reach your on conclusions before doing a “JJ”, e.g. committing 85% of your 401(k) to one stock.
UPDATE: Blew out my BIDU position @ 277.83 on 03/14/08
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