Thursday, October 23, 2008

S&P reiterates hold

Baidu.com posts third quarter earnings per American
Depositary Share (ADS) of $1.47 vs. $0.70, well above our
$1.15 estimate. Revenues rose 85%, in line with our forecast.
The company's operating margin was also notably higher than
our projection, reflecting scale in the business. Baidu indicated
its businesses have not been materially impacted by the global
financial crises, but noted that certain export customers have
been adversely affected. We are raising our per-ADS profit
estimates for 2008 to $4.62 from $4.23 and 2009 to $6.79 from
$6.46, and setting an 2010 projection of $9.93. Our 12-month
target price remains $300. /S. Kessler

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