citigroup 花旗：百度深度研究报告

15 February 2007 | 20 pages 英文

Rate of rev growth to decelerate & less margin expansion in '07E— With the rate of revenue growth continuing to slow and, due to a costly expansion into Japan, the margin expansion side of the story now impacted, we no longer believe that investors should hold the stock at the current valuation of 50x our new ‘08E. We downgrade to Sell / High Risk (3H) and maintain our US$105 PT.
 4Q06 results: Strong leverage but very weak outlook — Gross revs of US$34.8m(+137% yoy; +15% qoq) were only in-line with our US$34.8m; however, GAAP EPS (ex tax subsidy) of US$0.43 easily beat our US$0.29. Street was at US$34.8m and US$0.32. For 1Q07, Baidu guided for gross revs of US$34m– 35m (~99% yoy; -0.5% qoq) vs. our US$36.4m and the Street's US$38.9m.
 China search: Not growing as fast as expected or a company-specific issue? — Despite the algorithm transition and 1Q seasonality, Baidu failed to exceed rev estimates – and has guided down – for three quarters in a row. We view the move into Japan and expansion into News + Brand Advertising as troubling evidence the growth issues may extend beyond Baidu, as explained herein