Saturday, June 25, 2011

Baidu Rises Above 20-Day Average (Chart) *Up +9.35% for week* BIDU

● Baidu Planet 

Baidu reported near-record Q1 2011 financial results on April 27, 2011, following record Q4 2010 financial results reported on January 31, 2011


Baidu Overview

Baidu Baidu closed the week at $128.68 on Friday, June 24, 2011. BIDU was up an impressive +9.35% for the week, is down a -5.18% for June, and is up +33.31% for 2011. BIDU is -15.55% below the all-time closing high reached on Tuesday, April 26, 2011 of $152.37. 

S&P 500 By comparison, the overall market, the S&P 500, at 1268.45, was down -0.24% for the week, is down -5.71% for June, and is up +0.86% for 2011. SPX is up +87.49% since the March 9, 2009 market cyclical low. SPX closed at a multi-year closing high of 1363.61 on Friday, April 29, 2011, the highest close since the June 9, 2008 close of 1404.05, and is now -6.98% below that peak. BIDU is easily outperforming the overall market in 2011, but had underperformed in recent weeks. A review of the S&P 500 is here [S&P 500 Drops 7 of Past 8 Weeks (Chart) *European debt crisis weighs on markets*]. 

Baidu Fundamentals Baidu reported near-record Q1 2011 financial results on Wednesday, April 27, 2011, but the bar has been set high for Baidu in the world's largest Internet market. These financial results are reviewed and analyzed on this blog at the Baidu Financial Performance page. This was after stellar fourth quarter 2010 financial results on January 31, 2011.

Baidu News See below in this post.

Economic and Market News Information about the USA and world economies plus the USA financial system are posted at Boom Doom EconomyFinancial Controls, and Baidu Planet. Additional current commentary on both the overall stock market and economy is posted at Matrix Markets.

Baidu Daily Chart Below is the BIDU daily chart since February 1, 2011 to illustrate recent price interactions subsequent to the gap up on the record Q4 2010 earnings reported January 31, 2011.

Noteworthy Closing Prices
Current Close: $128.68
2011 and All-Time High: April 26 $152.37
2011 Low: January 3 $99.73
YE December 31, 2010: $96.53



Baidu Chart Review
Intermediate Term Trend descending 25d avg less than descending 50d avg, BIDU above 25d, below 50d, bearish
Long Term Trend BIDU greater than 10 month ema = 118.02, since April 2009, bullish
Key Resistance at resistance, prior peak 130, 100 day avg 131, 50 day avg 135, sub-peaks 142-143
Key Support at support, 127, 20 day avg 126, 200 day avg 117, 116, 114
Moving Averages below 50d, 100d avgs; above 20d, 200d avgs
Uptrend Line well above, not shown
Downtrend Line closed below since 6-3-11; line from 4-26-11 all-time closing high 152.37 to 6-2-11 peak 138.49
RSI 14 Day = 51.76 is reasonable, ascending
RSI 28 Day = 50.50 is reasonable, ascending
MACD (12,26,9) = +1.23, ascending
Volume about normal 9.9M latest day, 50 day average = 9.2M
Price Earnings Ratio = higher 70.72, has been high 90s to low 100s in past year (Google Finance)
Market Capitalization = $44.88 billion (Google Finance)

Conclusion Baidu peaked at the all-time closing high of 152.37 on Tuesday, April 26, then dropped below the 20, 50, and 100-day averages in May and June. The ascending 200-day average was successfully tested on Thursday, June 16 and BIDU bounced upwards ultimately to above the 20-day average. Additional tests  of the ascending 200-day average could occur due to overall equity markets weakness. BIDU dropped along with the equity markets but rallied this past week along with other technology stocks. Recent SEC actions against and investigations into Chinese "reverse merger" stocks [Regulators Scramble to Warn on Chinese Stocks] have increased investor concern, although BIDU is not specifically questionable. Chinese stocks in general have fallen out of favor with investors. In addition, accusations against Baidu for copyright and intellectual property infringements have caused investor concern and exacerbated Baidu's price drop. The bar has been set high for Baidu in the world's largest Internet market and many investors were hoping Baidu would report record financial results for Q1 2011, but this was after Baidu reported incredible financial results on January 31, 2011 for the Q4 2010. Q4 is normally the annual cyclical high for Internet and technology sector companies and Q1 is the annual cyclical low. Therefore, Baidu's Q1 2011 financial results were amazing, but, again, investors were hoping the growing Chinese Internet market would push Baidu earnings to yet another all-time high regardless of the annual cycle. These financial results are reviewed and analyzed on this blog at the Baidu Financial Performance page.

Disclosure We are long BIDU.

Baidu News
● Baidu, as with its USA counterpart Google, has been acquiring other companies, including a 29% interest in Leftbrain (June 23), a Chinese online ratings site operator, and a majority interest in Qunar (June 24), a Chinese online travel reservations and resources service.
● There is the possibility that Microsoft Bing may partner with Baidu. Baidu would manage the paid ads on Bing China and Bing would provide English search results for Baidu. Additional partnerships between Microsoft and Bing are possible as Baidu pushes for expansion outside of China.
● There has been controversy regarding Baidu allowing illegal MP3 music downloads via Baidu MP3, a music search service that allows users to search, stream, and download (copyrighted) music free of charge. Catherine Leung of Baidu stated on May 7, 2011, "Copyrighted music will be the direction of Baidu's music business in the future, and our music-search service will also be based on legal content." The International Intellectual Property Alliance (IIPA), which represents the United States' copyright industry groups, testified at a USA Congressional hearing on Wednesday, May 4, 2011, that Baidu had "serious infringement problems".
● Baidu had a 75.8% search market share in China for the quarter ended March 2011 per Analysys International. Google is second with a 19.2% share. Google has redirected its China traffic to Hong Kong since a censorship conflict with the Chinese government in 2010.
● FWIW Department: Unidentified Chinese residents, as plaintiffs, have sued Baidu and the Chinese government for $16 million in a Manhattan, New York federal court for censoring Internet information. (Zhang vs. Baidu.com Inc., Southern District of New York, Manhattan) China requires websites to self-censor pornography, gambling, and content critical of the ruling Communist Party. No USA court has jurisdiction in these matters and the lawsuit is symbolic, even if a default judgment was obtained. China blocks Google's YouTube, Twitter, and Facebook, among many other websites.


About Baidu

Baidu, Inc. is the leading Chinese language Internet search provider. As a technology-based media company, Baidu aims to provide the best way for people to find information. In addition to serving Internet search users, Baidu provides an effective platform for businesses to reach potential customers. Baidu's ADSs, each of which represents one Class A ordinary share, currently trade on the NASDAQ Global Select Market under the symbol "BIDU".


The Baidu Story

Many people have asked about the meaning of our name. "Baidu" was inspired by a poem written more than 800 years ago during the Song Dynasty. The poem compares the search for a retreating beauty amid chaotic glamour with the search for one's dream while confronted by life's many obstacles. "…hundreds and thousands of times, for her I searched in chaos, suddenly, I turned by chance, to where the lights were waning, and there she stood." Baidu, whose literal meaning is hundreds of times, represents persistent search for the ideal.

Baidu chose a poetic Chinese name because it wants the world to remember its heritage. As a native speaker of the Chinese language and a talented engineer, Baidu focuses on what it knows best - Chinese language search. Applying avant-garde technology to the world's most ancient and complex language is as challenging as it is exciting. At least people here at Baidu think so. As having diligently disclosed in the Prospectus of our recent Initial Public Offering, we believe there are at least 38 ways of saying "I" in Chinese. It is important that we master all the ways of addressing oneself in Chinese because our users depend on us to address every one of their daily queries. And trust us, pin pointing queries in the Chinese language is an art rather than a science.

Our mission is to provide the best way for people to find information. To do this we listen carefully to our users' needs and wants. Have we collected all the Chinese web pages they want to see? Are the pages current and up to date? Are the search results closely related to their queries? Did we return those search results instantly? To improve user experience, we constantly make improvements to our products and services. For example, we introduced "phonetic" or "pin-yin" search which allows our users to type in Chinese keywords using English alphabets. This feature is designed to skip the switching from English inputting to Chinese inputting and for when the user is not sure of the written form of a keyword. Our users definitely notice the many little things that we do differently to ensure a simple and reliable search experience every time. 

In addition to serving individual users, we also serve as a media platform for online marketing customers. We not only provide our customers easy access to one of the largest online audiences in China but also targeted groups with defined interests as indicated by queries. Unlike traditional online advertising services which charge by flat fee, our marketing products and services are performance based. Our Pay for Performance model has taken the market by storm because it is cost effective and measurable.

We know that a lot of interesting things are going on in the Internet space, but we don't want to lose focus. China's Internet search industry is only a newly discovered territory. We see vast untapped grounds in our home base and we believe there are still plenty of prizes to be claimed by the best players.


More Charts and Analysis!
USA and Global economic charts
Apple (AAPL) financial performance and stock charts
Google (GOOG) financial performance and stock charts
Microsoft (MSFT) financial performance charts
Intel (INTC) financial performance charts
VMware (VMW) financial performance charts
SalesForce.com (CRM) financial performance charts
USA failed and problem banks
Federal Reserve statistical releases
JPMorgan Chase & Co. (JPM) financial performance charts
Citigroup (C) financial performance charts
Goldman Sachs (GS) financial performance charts
Wells Fargo (WFC) financial performance charts
Bank of America (BAC) financial performance charts
Morgan Stanley (MS) financial performance charts
S&P 500 (SPX) charts and review
China economic, Internet, and technology news
Baidu (BIDU) financial performance and stock charts


Visit Osprey Port News Network!
Apple, Google, Baidu, China, technology, financial system, stocks, markets, economy, science, environment, future


Follow Baidu Planet on Twitter!
Baidu, China, & technology news plus BIDU stock analysis. Select USA & Global economic news.


● Baidu Planet 

Thursday, June 23, 2011

China Manufacturing Growth Nearly Stalls in June (Chart) *At 11-month low: "demand is cooling"

● Baidu Planet 


HSBC China Manufacturing PMI


China Manufacturing The HSBC Flash China Manufacturing Purchasing Manangers' Index, compiled by Markit, decreased significantly (-1.5) in June to 50.1 from 51.6 in May. The Flash PMI is an early release and indicator of the complete PMI to be issued later this month. The estimate is typically based on 85%-90% of total survey responses and is designed to provide an accurate indication of the final PMI data.

Commenting on the China Manufacturing PMI survey, Hongbin Qu, Chief Economist, China & Co-Head of Asian Economic Research at HSBC said: “Demand is cooling thanks to the effect of tightening measures and the slackness in external markets. This, plus the ongoing inventory destocking, has led to a slowdown in output growth. But hard-landing worries are unwarranted not least because the current PMI is at a level consistent with around 13% IP growth. The good news is that inflationary pressures started to ease meaningfully in June amid slowing demand.”

China Manufacturing PMI (Chart) Below is a chart of the China Manufacturing PMI since March 2010 through the latest month reported. Manufacturing has expanded, remained above 50, every month except July 2010, and now for 11 consecutive months. The PMI is a percentage - not a total. More about the PMI below the chart. A reading above 50 indicates Chinese manufacturing is expanding even when the monthly PMI is decreasing, just expanding at a slower rate.


Commentary The China Manufacturing PMI at 50.1 (-1.5) indicates not only a continuing decline of the expansion rate, the expansion continues at a slower pace, but indicates the expansion has essentially stalled. The HSBC report did note the June PMI signaled "demand is cooling" and the contributing factors were ongoing Chinese government intervention and measures, lower demand from external markets, and continuing inventory destocking. China has implemented fiscal and monetary measures to slow down the economy to contain prices. To what extent the slowing of Chinese manufacturing output growth is attributable to global economic demand is the concern.
● The current PMI is below the intermediate-term trend, the 6-month moving average of 51.9
● The current PMI is below the long-term trend, the 12-month moving average of 52.5
● The recent peak in expansion was 54.5 in January 2011
● The current PMI is below the long-term PMI series average of 52.4

About the PMI The HSBC China Report on Manufacturing is based on data compiled from monthly replies to questionnaires sent to purchasing executives in over 400 manufacturing companies. The panel is stratified geographically and by Standard Industrial Classification (SIC) group, based on regional and industry contribution to Chinese Industrial Production. Survey responses reflect the change, if any, in the current month compared to the previous month based on data collected mid-month. For each of the indicators the ‘Report’ shows the percentage reporting each response, the net difference between the number of higher/better responses and lower/worse responses, and the ‘diffusion’ index. This index is the sum of the positive responses plus a half of those responding ‘the same’.
● The Purchasing Managers’ Index (PMI) is a composite index based on five of the individual indexes with the following weights: New Orders - 0.3, Output - 0.25, Employment - 0.2, Suppliers’ Delivery Times - 0.15, Stock of Items Purchased - 0.1, with the Delivery Times index inverted so that it moves in a comparable direction.
● Diffusion indexes have the properties of leading indicators and are convenient summary measures showing the prevailing direction of change. An index reading above 50 indicates an overall increase in that variable, below 50 an overall decrease.

About HSBC Headquartered in London, HSBC is one of the largest banking and financial services organisations in the world. Its international network comprises some 8,000 offices in 87 countries and territories in Europe; Hong Kong; Rest of Asia-Pacific; the Middle East; North America and Latin America. With assets of US$2,418 billion at 30 June 2010, HSBC is one of the world’s largest banking and financial services organisations. HSBC is marketed worldwide as ‘the world’s local bank’.

About Markit Markit is a leading, global financial information services company with over 1,900 employees. The company provides independent data, valuations and trade processing across all asset classes in order to enhance transparency, reduce risk and improve operational efficiency. Its client base includes the most significant institutional participants in the financial market place. For more information please see www.markit.com


More Charts and Analysis!
USA and Global economic charts
Apple (AAPL) financial performance and stock charts
Google (GOOG) financial performance and stock charts
Microsoft (MSFT) financial performance charts
Intel (INTC) financial performance charts
VMware (VMW) financial performance charts
SalesForce.com (CRM) financial performance charts
USA failed and problem banks
Federal Reserve statistical releases
JPMorgan Chase & Co. (JPM) financial performance charts
Citigroup (C) financial performance charts
Goldman Sachs (GS) financial performance charts
Wells Fargo (WFC) financial performance charts
Bank of America (BAC) financial performance charts
Morgan Stanley (MS) financial performance charts
S&P 500 (SPX) charts and review
China economic, Internet, and technology news
Baidu (BIDU) financial performance and stock charts


Visit Osprey Port News Network!
Apple, Google, Baidu, China, technology, financial system, stocks, markets, economy, science, environment, future


Follow Baidu Planet on Twitter!
Baidu, China, & technology news plus BIDU stock analysis. Select USA & Global economic news.


● Baidu Planet 

Seeking Alpha