Mar. 31, 2014, 11:31 AM
- Exclusive deals for popular content will strengthen Baidu's (BIDU +3%) Q1 online video ad pricing and offset seasonal weakness, thinks Pac Crest (Outperform).
- The firm also suggests it isn't worried about Baidu's aggressive spending, calling it "strategic and not structural." It considers a valuation of 23x 2015E EPS "extremely attractive for a company that will likely accelerate revenue growth in 2014."
- Shares are recovering some of the losses they've seen over the last month thanks to a sharp selloff in Chinese Internet names.
Mar. 7, 2014, 5:07 PM
- Having already launched a wealth management platform for Chinese depositors, Baidu (BIDU -1.4%) is now heading a partnership that's applying for a private banking license. "Of the businesses the Internet will topple they naturally include finance," declares CEO Robin Li.
- Baidu, Alibaba, and Tencent have all launched wealth management products, hoping to cross-sell consumers in a country with sky-high savings rates on investment vehicles that deliver much higher returns than those provided by state-owned banks.
- Alibaba's (ABABA) Yu'e Bao platform has been especially successful, attracting 81M users who have collectively deposited nearly RMB500B ($81B).
- The efforts haven't come without a backlash from incumbents: Three state-owned banks halted interbank deposit transactions with fund manager Tianhong Asset Management after Alibaba applied to buy 51% of the firm for $193M.
- But Premier Li Keqiang, who has pushed for a slew of financial reforms, says he supports the "healthy development" of Internet banking services.
Feb. 28, 2014, 9:51 AM
- Baidu (BIDU -2.1%) has been cut to Reduce by BNP Paribas a day after gaining in response to a Q4 beat and strong top-line guidance.
- TripAdvisor (TRIP +3%) has been upgraded to Neutral by Susquehanna.
- RadiSys (RSYS +9.5%) has been upgraded to Buy by Needham.
- YuMe (YUME -18.3%) has been cut to Neutral by Citi after providing soft guidance (2014 revenue of $190M-$200M vs. a $203.7M consensus) to go with mixed Q4 results.
Feb. 27, 2014, 11:06 AM
- Citing concerns about a soft 2014 margin outlook (the result of aggressive investments), Morgan Stanley has cut Baidu (BIDU +2.3%) to Equal-Weight in spite of its Q4 beat and strong Q1 guidance. Shares have given back a large chunk of yesterday's AH gains.
- Stifel, however, has upgraded shares to Buy and lifted its PT to $238. It expects Baidu's mobile queries will grow to account for over half its total queries in 2014, and notes mobile search ad prices (CPCs) are now at 60% of PC levels (up from 55% in Q3).
- The firm forecasts 53% and 49% revenue growth in 2014 and 2015, respectively. Adjusted EBITDA is only expected to rise 9% in 2014, but growth is expected to surge to 51% in 2015.
- Maxim notes mobile's revenue share doubled from Q1 to Q4, and Goldman observes Baidu's app stores, locked in fierce competition with Qihoo (QIHU +2.2%), have a 41% share of Chinese app distribution, per research firm Analysys.
- CEO Robin Li suggested on the CC (transcript) Baidu, which made a string of big acquisitions in 2013, is open to more M&A in 2014. He also claimed over 60% of mobile ad customers now have a mobile-optimized landing page.
Feb. 26, 2014, 5:37 PM
Feb. 26, 2014, 4:48 PM
- Baidu (BIDU) expects Q1 revenue of RMB9.24B-RMB9.52B ($1.526B-$1.573B), above a consensus of RMB8.67B ($1.43B).
- Q4 results beat estimates thanks to a 9.4% Q/Q and 34.8% Y/Y increase in revenue per online ad customer to $3,452, and in spite of a 2.8% Q/Q drop in active online ad customers to 451K. On a Y/Y basis, the latter figure rose 11.1%.
- Traffic acquisition costs rose to 12.3% of revenue from 11.7% in Q3 and 9.6% a year ago, as hao123 directory site promotions and a mix shift towards contextual (ad network) ads continues taking a toll.
- SG&A spend soared 34.6% Q/Q and 135% Y/Y to $307.7M thanks to mobile product promotions. R&D spend rose 15.9% Q/Q and 80.1% Y/Y to $208.8M.
- Bandwidth costs rose to 5.9% of revenue from 5.3% a year ago, and context costs doubled their revenue share to 3.8%.
- Mobile accounted for over 20% of Q4 revenue.
- CC at 8PM ET. Q4 results, PR.
Feb. 26, 2014, 4:32 PM
Feb. 26, 2014, 12:10 AM| Feb. 26, 2014, 12:10 AM | Comment!
Feb. 25, 2014, 5:35 PM| Feb. 25, 2014, 5:35 PM | 4 Comments
Feb. 14, 2014, 5:04 PM
- In addition to establishing a BlackBerry position, Dan Loeb's Third Point LLC took a 600K-share stake in Baidu (BIDU), a 7.6M-share stake in T-Mobile USA (TMUS) and a 1M-share stake in NXP (NXPI) during Q4. At current levels, the positions are respectively worth $100M, $237M, and $56M. NXPI +1% AH.
- On the other hand, Loeb unloaded the 4.4M-share Tibco (TIBX) position he had at the end of Q3. There were hopes Loeb would use his Tibco stake to push for a spinoff of the company's faster-growing Business Optimization unit. TIBX -1.7% AH.
- Loeb also cut his remaining Yahoo (YHOO) position in half to 8M shares. Third Point once had a 60M-share stake in Yahoo, before striking a deal last August to sell 40M shares back to the company and leave its board.
- Third Point's 13F
Jan. 28, 2014, 1:00 PM
- Chinese Internet stocks, crushed over the last few trading days amid SEC-related concerns and a general rout in tech momentum plays, are rebounding sharply today in tandem with other high-beta tech stocks.
- Possibly helping: The SEC has settled a dispute with Deloitte over its request for documents related to Longtop Financial, a Deloitte-audited Chinese firm suspected of accounting fraud. The settlement, which comes after the SEC received a "substantial volume" of requested docs, is fueling hopes the SEC's auditing ban on the Chinese arms of the big-4 accounting firms (including Deloitte) will be revoked, and a final resolution between U.S. and Chinese regulators achieved.
- Also: Morgan Stanley is calling the selloff a buying opportunity, and has picked five names it's a fan of - Baidu (BIDU +2.8%), YY (YY +14.5%), New Oriental (EDU +2.8%), Dangdang (DANG +6.8%), and Ctrip (CTRP +5.2%)..
- MS expects Baidu's margins (recently pressured by huge investments) to stabilize later this year with the help of accelerating sales growth; it's pleased with Ctrip's willingness to sacrifice near-term margins for share gains; it think Dangdang's e-commerce strategy is yielding margin improvement and better fulfillment efficiency; and it's a fan of YY's "sticky" user base and monetization potential (less than 2% of users are currently monetized).
- Major gainers include Sungy Mobile (GOMO +11.3%), 500.com (WBAI +18.3%), ChinaCache (CCIH +9.8%), Vipshop (VIPS +10%), Bitauto (BITA +9.5%), and Qunar Baidu-controlled (QUNR +8.8%).
Jan. 27, 2014, 12:44 PM
- U.S. and Chinese Internet stocks are adding to last week's big losses, as investors continue taking profits following major 2013 gains. Chinese stocks were hit last week by an emerging markets selloff, weak PMI data, and an SEC ban (pending appeal) on audits from the Chinese units of big-4 U.S. accounting firms.
- Twitter (TWTR -8.2%), the company bears are most likely to point to when arguing a new Internet stock bubble has formed, is headlining the U.S. decliners. Shares are still up 25% from their post-IPO opening trade of $45.10.
- Other U.S. decliners: GOOG -3.1%. FB -2.9%. YELP -5.3%. Z -5.1%. LNKD -4.3%. P -3.2%. ANGI -4.1%. ZNGA -3.1%. GRPN -3.1%.
- Chinese decliners: BIDU -2.9%. CCIH -19%. BITA -14.6%. CTRP -7.4%. NQ -7.9%. LONG -9.4%. DANG -7.3%. SOHU -4.3%. GOMO -5.8%. SINA -3.3%. QUNR -7.7%. SFUN -5.4%. WBAI -7.5%. RENN -5%.
- Internet/social media ETFs: FDN, PNQI, SOCL
Jan. 24, 2014, 10:59 AM
- Five months after Baidu (BIDU -0.4%) acquired a 59% stake in Chinese daily deals/group-buying site Nuomi from Renren (RENN +2.2%) for $160M, Renren says it has reached a deal to sell its remaining stake in Nuomi to Baidu. Terms are undisclosed. (PR)
- Following Baidu's initial purchase, Nuomi's CEO wrote a memo stating his company is looking to eventually go public. The company has been estimated to hold an 11.6% share of the Chinese group-buying market (#4 overall).
- Nuomi is just one of several acquisitions Baidu has made over the last two years to grow the reach of its Web/mobile empire.
Jan. 23, 2014, 9:59 AM
- SEC administrative law judge Cameron Elliot has barred the Chinese units of the Big-4 accounting firms - KPMG, Deloitte, PwC, and Ernst & Young - from auditing U.S.-listed companies for six months.
- Elliot declares the accounting firms "willfully" chose to withhold audit work papers from U.S. regulators for Chinese companies being investigated for accounted fraud. The firms have been worried about violating Chinese privacy laws by turning over the papers, and have argued the dispute needs to be resolved politically.
- Though the firms plan to appeal and say they can continue serving Chinese clients for now, shares of Chinese Web and solar names aren't handling the news well. Soft Chinese PMI data could be worsening matters.
- Chinese Web decliners: BIDU -2.5%. SOHU -3.2%. DANG -8.9%. SFUN -8.5%. PWRD -8.5%. QUNR -7.1%. LITB -6.5%. YY -6.1%. WUBA -6%. BITA -5.4%. EJ -5.9%. SINA -4.6%. LITB -6.5%. CTRP -5.4%. NQ -7.1%.
- Chinese solar decliners: TSL -8.7%. JASO -6.9%. SOL -6.3%. JKS -5.6%. CSIQ -5.4%. DQ -4.6%. YGE -5.6%. CSUN -6.2%. HSOL -7.8%.
- Qihoo (QIHU -4.6%) has joined the selloff in spite of a BrightWire report stating Alibaba (ABABA) has reached a deal to acquire a stake in the company. Marbridge Consulting reported two weeks ago Qihoo and Alibaba were in talks about a possible investment.
Jan. 10, 2014, 9:44 AM
- Microsoft (MSFT +1.2%) has been upgraded to Overweight by Jefferies. The upgrade follows a moderate drop caused by disappointment Alan Mulally is no longer a CEO candidate.
- BlackBerry (BBRY +1.1%) has been upgraded to Sector Perform by RBC. Shares have already seen a big run-up since the company's FQ3 report.
- Baidu (BIDU +1.3%) has been upgraded to Buy by Maxim.
- Micron (MU +0.2%) has been upgraded to Buy by Jefferson Research, and started at Buy by Argus and Sterne Agee. The moves come two days after shares blasted off in response to a very strong FQ1 report (I, II).
- Splunk (SPLK -2.1%) has been cut to Equal Weight by Barclays. The downgrade shortly follows a UBS upgrade to Buy. SA Pro contributor ZNCapital recently took aim at Splunk's valuation.
- Ambarella (AMBA -1.8%) has been cut to Hold by Deutsche. Needham cut the chipmaker to Hold two days ago.
- Marvell (MRVL +1.9%) has been started at Buy by MKM.
- Qlik (QLIK +2.1%) has been upgraded to Buy by Jefferies.
Jan. 9, 2014, 10:44 AM
- China's iResearch estimates Qihoo (QIHU -6.5%) has only a 14.4% Chinese search share (translation). That's well below the 22.4% estimated by frequently-referenced CNZZ, as well as Qihoo's own numbers; the company stated on its Q3 CC (transcript) it believes its Chinese search share is "comfortable above 20%."
- An iResearch analyst suggests CNZZ's reliance on traffic data from small/medium-sized sites provides it with an incomplete picture of Chinese search trends. iResearch claims to analyze data from 3K+ sites (including large ones) and 1K+ apps.
- If iResearch's figure is reasonably accurate, it would be a positive for Baidu (BIDU -0.2%). Most of the share gains Qihoo has seen since launching its search engine in the summer of 2012 have come at Baidu's expense. CNZZ estimates Baidu had a 63.1% search share in December (-860 bps Y/Y).
- Qihoo is giving back a majority of the gains it saw yesterday following an Alibaba investment rumor. The company has said it's aiming to have a 30% search share by the end of 2014.
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