Friday, December 19, 2008

Susquehanna positive on Baidu

"Medical ad incidence is perceived as a "reset"
point at Baidu, from which on Baidu should grow
on a healthier path. The consequence is, the
market may underestimate Baidu's growth
by only looking at growth of CY09/CY08. Baidu's
growth in CY10/CY09 should re-accelerate due
to Y/Y comparison singling out medical ad
impact, a more mature eCommerce environment,
as well as recovery in the macro economy, in our
view. Baidu's C2C initiative is a different strategy
than Tencent's Paipai, and different than its
Japan venture. We fine-tuned our 4Q08
estimates to be in-line with Baidu's revised
guidance, and believe 2Q guidance will be a
better catalyst than 1Q guidance. Baidu shares
remain attractive relative to its growth

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