Baidu, Sohu: Bernstein Bullish on China Internet Plays
Baidu (BIDU) and Sohu (SOHU) shares are both trading higher today after Bernstein Research analyst Jeffrey Lindsay launched coverage of the two China-based Internet play with Outperform ratings. He set price targets of $170 for Baidu and $80 for Sohu.
“Concerns about the Chinese economy and a spate of controversies affecting the Internet in China, including a recent crackdown on pornography, have rattled investor confidence in both stocks,” he writes. But Lindsay says those fears are “unwarranted,” and asserts that “even with slower economic growth, there is more than enough domestic growth to fuel both players for at least the next 5 years.”
Lindsay notes that China has surpassed the U.S. to become the world’s largest Internet market. But he says that in terms of per capita usage, the Net in China still looks like the U.S. in the late 1990s.