Baidu Inc. (ADR) (NASDAQ: BIDU) is a China-based Chinese-language Internet search provider. The company operates in China through its wholly owned subsidiary Baidu Online Network Technology (Beijing) Co. Ltd. The company also conducts its operations in China through Baidu Netcom Science Technology Co. Ltd. The company also operates a Japanese search service, which is run by Baidu Japan.
Baidu reported its second-quarter financial results on July 21, posting second-quarter total revenue of $282.3 million, up 74.4% from the same period last year. It reported second-quarter operating profit of $143.3 million, up 129.8% from the same period last year. The company’s second-quarter net income came in at $123.5 million, up 118.5% from the same period last year. The company’s online marketing revenue increased 74.5% to $282.2 million.
Baidu’s second-quarter financial results benefited from the problems faced by Google (NASDAQ: GOOG) in China. Google is Baidu’s biggest competitor in China. Due to the problems over censorship issues in China, Google lost considerable market share in the country, which directly benefited Baidu in the second quarter.
Since reporting the second-quarter financial results, Baidu’s shares jumped from $74.06 to their current levels. The jump can be attributed to the company’s strong outlook for the third quarter of 2010, which the company announced at the time of the release of the second-quarter financial results. For the third quarter of 2010, Baidu expects to generate total revenue of $324.4-$333.3 million, which represents a 72%-77% year-over-year increase.
The only worrying factor here is that Google’s Chinese license has been renewed, following a lot of speculation. So it is likely that the advantage Baidu had in the second quarter of 2010 may start to disappear. It will be interesting to see if Baidu can maintain the market share it gained in the second quarter of 2010. All this could make Baidu an interesting play.
Year-to-date, the BIDU shares are up 110%, reflecting the gains made by the company in the first six month of 2010. The stock has climbed steadily so far this year and are now trading above their 10-day, 20-day, 50-day and 100-day moving averages, which indicates that investors are bullish on the company. The shares have support level at $80.73 and resistance level at $85.83.
With 10 Buy, 7 Outperform, 8 Hold and 1 Underperform rating, analysts, currently, have a consensus recommendation of Outperform on Baidu.
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BeaconEquity.com is committed to producing the highest-quality insight and analysis of small-cap stocks, emerging technology stocks, hot penny stocks and helping investors make informed decisions. Our focus is primarily OTC stocks in the stock market today, which have traditionally been shunned by Wall Street. We have particular expertise with renewable energy stocks, biotech stocks, oil stocks, green energy stocks and internet stocks. There are many hot penny stock opportunities present in the OTC market everyday and we seek to exploit these hot stock gains for our members before the average daytrader is aware of them.
Beacon Equity Group Disclaimer
This newsletter is a paid advertisement and is neither an offer nor recommendation to buy or sell any security. We hold no investment licenses and are thus neither licensed nor qualified to provide investment advice. The content in this report or email is not provided to any individual with a view toward their individual circumstances. Beaconequity.com is a wholly-owned subsidiary of BlueWave Advisors.
While all information is believed to be reliable, it is not guaranteed by us to be accurate. Individuals should assume that all information contained in our newsletter is not trustworthy unless verified by their own independent research. Also, because events and circumstances frequently do not occur as expected, there will likely be differences between the any predictions and actual results. Always consult a real licensed investment professional before making any investment decision. Be extremely careful, investing in securities carries a high degree of risk; you may likely lose some or all of the investment.
