Baidu Stock Analysis BIDU
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Hi, another Chinese giant today as we look at what most people would see as the google of China.
Back in 2000, Robin Li and Eric Xu got together and started the search engine Baidu. It is now a mega tech company that is moving into artificial intelligence, self driving cars and personal health.
Baidu is the dominant search engine in China.
Commanding about 70% of the gigantic Chinese market.
Having a popular search engine opened up many possibilities for Baidu, most in monetising through ads.
Baidu maps, Baidu browser, Baidu image search… and unsurprisingly the advertising works pretty much the exact same way as Google Adwords and Google Adsense.
The other area that is interesting and a follow on from my previous video on Netflix, well Baidu have a large stake in the company Iqiyi which essentially is the Netflix of China.
Now it really is sounding a lot like Google.. And Alibaba and Tencent for that matter too.
So that’s a lot of the positives. But let’s look at the bearish side.
Firstly, I would reference the 2019 market share of Baidu. Back in 2017 it was about 77% and here it has decreased to about 70%. More recently it is reported to be closer to 66% market share.
Next bearish point is that Iqiyi and Baidu don’t work independently of each other. Even though they are separate businesses with separate stock market tickers, well as the major owner in Iqiyi, Baidu subsidises a lot of Iqiyi’s purchases.
But if Iqiyi wants to get a very popular TV show in China, well Baidu helps pay that bill.
It’s a strange situation, something we are not used to seeing when companies are helping each other out like this.
Baidu are not doing it to be nice, they see the growth of Iqiyi important as a major investor.
But I think this is strange and something I don’t really like. I think the companies should stand on their own 2 feet. But i guess there is more than 1 way to cook an egg.
On top of this, the current trade war with the US, slowing Chinese economy and the lockdown stuff as well, Advertisers have tightened their wallets. The short term is uncertain.
So the increase in spending for Iqiyi and the current market conditions, Baidu has had a tough few years financially speaking. But maybe this will give us an opportunity.
It’s probably a good time now to take a look at the finances to see whether we can find an opportunity.
Ok so let’s put this all together for a Baidu Stock Analysis
I don’t like how Iqiyi has such an impact on Baidu’s business. And just so you know, Iqiyi is making a loss and I think it’s still an immature company.
Market share is slowly shrinking, but it is still very dominant.
Lot’s of current economic issues floating around the Chinese and world economy, putting pressure on businesses to advertise.
I don’t like a bad Return on Equity as it signals that the company hasn’t been executing it’s plans.
China’s internet user base has a lot more growth in it.
We are talking about one of the most used websites in the world.
They are one of the most mature Chinese companies. An investment in Baidu is an investment in China.
Long term does seem more positive. They have a strong position in their core advertising business so they can take advantage as China’s confidence returns.
They have lots of different avenue’s that the company can use to grow. Artificial intelligence, self driving cars and things like that.
Watch video Baidu Stock Analysis BIDU online without registration, duration hours minute second in high quality. This video was added by user Andrew Brown 27 July 2020, don't forget to share it with your friends and acquaintances, it has been viewed on our site 3,701 once and liked it 223 people.