If you don’t what Baidu is, it is normal since it is a Chinese thing. To give you a better idea, it is the Google of China - an online search engine which used daily by Chinese (potentially 1.3 billion of population will use it in the future, not a bad number huh). It is in pure Chinese interface, and it does a good job in searching, indexing the most complicated language of the world, of course - Chinese.
With a similar development pattern as Google, Baidu finds a new world in the online music industry. On 2007, Baidu.com, Inc. and Rock Music Group (RMG) announced that they have established a partnership to provide an advertising-supported online music streaming service. Baidu signed a similar agreement with EMI, another large music company covering artists from Hong Kong, Taiwan and Singapore.
Besides search engine function, Baidu also launched different product aggressively. Here is a list of its featuring products:
* Post Bar - A Baidu invention and a popular hangout in the Baidu community. Post Bar is a place for users to exchange information on query-activated message boards.
* Movie Search - A subscription based service that supports downloads of movies made available by a number of contracted content providers.
* Baidu Knows - Users may ask and answer questions on a reward system.
* Desktop Search - The first desk top search tool that supports both English and Chinese, developed in four months.
* Search Index - A registration based service that monitors changes in the most frequently searched keywords. Search Index is a useful tool for media professionals.
Valuation Ratios
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| P/E Ratio (TTM) | 187.75 | 28.61 | 29.30 | 20.84 |
| P/E Low - Last 5 Yrs. | NM | 15.85 | 17.71 | 13.98 |
| Price to Sales (TTM) | 67.60 | 3.80 | 4.99 | 3.00 |
| Price to Tangible Book (MRQ) | 53.28 | 10.78 | 8.89 | 8.38 |
| Price to Free Cash Flow (TTM) | NM | 30.85 | 29.60 | 35.46 |
Dividends
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Dividend Yield | NM | 1.56 | 1.30 | 2.14 |
| Dividend 5 Year Growth Rate | NM | 5.06 | 13.15 | 11.56 |
Growth Rates
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Sales (MRQ) vs Qtr. 1 Yr. Ago | 109.39 | 17.69 | 17.11 | 14.62 |
| Sales - 5 Yr. Growth Rate | NM | -0.03 | 13.93 | 13.90 |
| EPS (TTM) vs TTM 1 Yr. Ago | 255.79 | 4.81 | 19.76 | 20.01 |
| Capital Spending - 5 Yr. Growth Rate | NM | -4.03 | 5.45 | 8.71 |
Financial Strength
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Quick Ratio (MRQ) | 2.98 | 1.73 | 1.92 | 1.26 |
| LT Debt to Equity (MRQ) | NM | 0.38 | 0.22 | 0.60 |
| Interest Coverage (TTM) | NM | 7.25 | 10.25 | 13.08 |
Profitability Ratios
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Gross Margin (TTM) | 66.62 | 41.31 | 52.12 | 45.08 |
| EBITD Margin (TTM) | NM | 20.18 | 19.88 | 23.23 |
| Operating Margin (TTM) | 32.06 | 14.02 | 16.67 | 19.73 |
| Pre-Tax Margin (TTM) | 36.61 | 13.06 | 18.68 | 18.60 |
| Net Profit Margin (TTM) | 36.67 | 9.99 | 13.75 | 13.68 |
| Effective Tax Rate (TTM) | -0.17 | 29.99 | 26.33 | 29.79 |
Management Effectiveness
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Return On Assets (TTM) | 25.22 | 6.38 | 10.78 | 8.41 |
| Return On Investment (TTM) | 31.79 | 10.48 | 15.64 | 12.42 |
| Return On Equity (TTM) | 31.95 | 13.06 | 20.80 | 21.43 |
Efficiency
| Company | Industry | Sector | S&P 500 | |
|---|---|---|---|---|
| Revenue/Employee (TTM) | 50,868 | 277,652 | 498,939 | 915,073 |
| Receivable Turnover (TTM) | 35.83 | 5.81 | 7.96 | 10.33 |
| Asset Turnover (TTM) | 0.69 | 0.77 | 0.80 | 0.95 |
With an annual net profit margin higher than 30% (while Google is around 29%) for 3 consecutive year, a strong and growing user base, and a faster internet technology (sorry America, China has internet2 already, which we are not aware, or even don’t know what that it), it is a very strong holding stock for long term.
