Pacific Crest’s Steve Weinstein Tuesday asserted in a research note that a recent Asia tour left him convinced that “China’s online ad market remains strong,” although he notes there are “still no signs” of spending related to next year’s Olympic games in Beijing.
“Growth in online advertising remains strong and continues to substantially outpace the overall growth in advertising,” he writes. “Display advertising is sustaining growth around the mid-30% level, with search growing even faster. ”
In the case of Baidu, Weinstein says he expects the company to increase the number of advertisers it serves by more than 50% year over year in 2007, and to drive revenue growth by more than 100%. He raised his EPS estimates to $1.68 from $1.62 for this year, and to $2.62 from $2.50 for 2008.
Sina, he writes, has brand strength that “should lead to further market share gains.” He says the site has become a “must-buy site for branding campaigns.” Weinstein raised his 2007 EPS estimate for Sina to 83 cents from 82 cents; for 2008, he goes to $1.18, from $1.13.
His prices targets are $210 for Baidu, and $53 for Sina.
BIDU vs. SINA 1-yr chart: