254.00 -8.25 (-3.15%)
Pre-Market: 8:18AM EDT
|Bid||250.10 x 1100|
|Ask||254.25 x 800|
|Day's Range||257.35 - 262.66|
|52 Week Range||184.60 - 289.69|
|Beta (3Y Monthly)||0.55|
|PE Ratio (TTM)||39.32|
|Earnings Date||Nov 12, 2019 - Nov 18, 2019|
|Forward Dividend & Yield||2.76 (1.07%)|
|1y Target Est||295.76|
(Bloomberg) -- So challenging are the times for Baidu Inc. that even meager revenue growth is cause for celebration.The Chinese search leader’s shares surged as much as 10% in extended trading after it reported sales inched up 1.4% to 26.3 billion yuan ($3.8 billion) in the June quarter, versus projections for a drop. Baidu foresees current-quarter revenue of 26.9 billion yuan to 28.5 billion yuan, flat to down a tad and roughly in line with estimates.The better-than-expected results will soothe investors’ worries for now that the 19-year-old company is losing steam rapidly as China’s internet evolves from desktop to mobile. Yet it continues to grapple with a broader economic slowdown as well as competition for advertisers from Tencent Holdings Ltd. and ByteDance Inc. The latter is chipping away at Baidu’s ad sales via increasingly popular news and social media apps, and also recently launched a general search engine -- a direct challenge to Baidu’s core business.“Facing severe outside challenges and a weak macro environment, the company has initiated a series of groundbreaking changes from top to bottom, involving company structures, personnel moves and business consolidation,” Baidu Chief Executive Officer Robin Li said in a letter to employees after the results. “Despite periodic pain, these changes will have positive and profound impact, enabling Baidu to walk farther and steadier.”Read more: Baidu’s $66 Billion Dive Knocks It Out of China’s Internet Top 5Net income dropped to 2.41 billion yuan, reversing a loss in the prior quarter -- Baidu’s first since going public in 2005. The company enjoyed a near-monopoly in online search after Alphabet Inc.’s Google exited China in 2010 but has in past years suffered a plethora of troubles from a regulatory clampdown over healthcare ads to the departure of a slew of top executives including Xiang Hailong, a 14-year veteran who ran its core search business.The search giant is betting on new technology such as artificial intelligence and self-driving cars, but these pushes aren’t going to pay off financially any time soon. In the meantime, Baidu is investing in content to hold onto users, backing social media platforms including Q&A site Zhihu and science sharing platform Guokr. Daily active app users climbed 27% in the June quarter to 188 million, while subscribers on its Netflix-style iQiyi service grew by about 50% to 100.5 million in June.Baidu had fallen off the list of China’s five most valuable internet companies, trailing Meituan and NetEase Inc., after shedding more than 40% of its market value this year. Once touted as a member of China’s tech triumvirate alongside Alibaba Group Holding Ltd. and Tencent, Baidu has been left behind as the country’s internet evolves.Baidu’s forecast “indicates continued pressure from multiple headwinds, including China’s weakening macroeconomic environment hurting advertisers’ sentiment, the company’s cleanup of low quality health-care advertisers, and the large influx of competitive advertising inventory depressing industry prices,” Bloomberg Intelligence analyst Vey-Sern Ling said.To contact the reporter on this story: Zheping Huang in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum Murphy, Peter ElstromFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
Alibaba Group stock edged up Friday as the China e-commerce giant received several price target hikes following its quarterly earnings report that beat views on the top and bottom lines.
Alibaba is to acquire rival NetEase’s cross-border online shopping platform, according to two people familiar with the matter, as China’s highly competitive $2tn ecommerce market takes early steps towards consolidation. to Rmb114.92bn ($16.3bn), might pay about $2bn for Kaola, according to one person familiar with the deal. Chinese shoppers have turned in large numbers to online retailers, led by Alibaba’s Taobao and Tmall platforms and JD.com: spending roughly four times as much as their US peers.
(Bloomberg) -- Forget the world’s chaos for a moment. Alibaba Group Holding Ltd. is doing just fine.Despite a trade war, the slowing domestic economy and brutally aggressive competition, China’s largest technology company reported revenue and profit numbers that handily beat analyst estimates. Revenue rose a blazing 42%, while net income more than doubled. Shares popped 3% in U.S. trading.Insulated because of its predominantly domestic business, Alibaba is benefiting from a demographic shift to internet shopping. Chinese online sales accelerated in the June quarter, helped by sales promotions that unfolded across the country’s largest e-commerce platforms. Alibaba’s report dropped just as the risks of a recession spike, U.S.-China trade tensions ratchet up yet again and archrival Tencent Holdings Ltd. warns of a tough economic outlook.“It’s surprising how resilient Alibaba is,” said Michael Norris, a Shanghai-based research and strategy analyst at consultancy AgencyChina. “There’s a big disconnect between Wall Street, which has really given a beating to Alibaba’s shares, and people on the ground.”Revenue rose 42% to 114.9 billion yuan ($16.3 billion) in the three months ended June, while net income also came in ahead of expectations at 24.4 billion yuan. That was helped by more than 4.3 billion yuan of pretax profit from Ant Financial, the payments-to-lending affiliate controlled by billionaire Jack Ma.“Despite the macro environment not being as good as last year, Alibaba has launched a lot of new initiatives and the personalized product feed is helping maintain its growth rate,” said Steven Zhu, an analyst with Pacific Epoch. “Its live-streaming services and collaboration with international brands are helping.”The economic slowdown is eroding parts of the company’s sprawling empire of e-commerce, retail stores, delivery services and more. Revenue in its digital media and entertainment segment inched up just 6%, despite streaming service Youku enlarging its average daily subscribers by 40%. Growth in its cloud computing division, which commands half the country’s market share, slowed to a still-respectable 66%.Small and mid-sized enterprises may be leery of spending on ads -- Alibaba’s biggest source of income -- given the current environment. That prompted Chief Financial Officer Maggie Wu to tell analysts Alibaba is in no rush to monetize its new shopping recommendation feeds.Longer term, investors have raised flags about the impact on margins of Alibaba’s enormous spending on so-called new retail -- its effort to use technology to overhaul physical retailers -- and deepen its footprint in lower-tier cities and rural areas. Alibaba said it will continue to invest in those initiatives, as well as on-demand services like food delivery unit Ele.me, which is fighting a fierce, money-losing battle with giant Meituan.Alibaba is approaching a critical juncture just as Chief Executive Officer Daniel Zhang prepares to replace billionaire co-founder Ma as chairman in September. A U.S. campaign of tariffs and other curbs is heightening uncertainty around the world’s second-largest economy, while the emergence of rivals at home such as Pinduoduo Inc. tests its longstanding dominance of Chinese online retail.The e-commerce titan may be on the look-out for assets to bolster its lead. Alibaba is in talks to pay $2 billion for NetEase Inc.’s Kaola, which specializes in selling foreign goods to Chinese consumers, local media outlet Caixin reported.The company is also hatching plans to raise more capital. Alibaba’s quarterly performance bolsters its ambition of pulling off what could be Hong Kong’s biggest share sale since 2010. The company is said to have already filed confidentially for a stock listing, but it’s unclear when it might go ahead with the float given the widespread protests that have gripped Hong Kong over the past 11 weeks. Executives made no mention of the issue during their conference call.Overall, adjusted earnings per share came to 12.55 yuan versus the 10.3 yuan projected. Net cash slipped 4% in the quarter, depressed by a $250 million cash settlement reached last quarter on a U.S. federal class action lawsuit.The “key standout for us is that Alibaba’s China commerce business grew 40%, close to twice the rate of the China online retail industry,” said Neil Campling at Mirabaud Securities. “The scale benefits are paying off and Alibaba is enjoying both active consumer growth momentum and higher average spend.”\--With assistance from Zheping Huang and Sheryl Tian Tong Lee.To contact the reporter on this story: Lulu Yilun Chen in Hong Kong at email@example.comTo contact the editors responsible for this story: Peter Elstrom at firstname.lastname@example.org, Edwin Chan, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
(Bloomberg) -- Baidu Inc. has dropped off the list of China’s five most valuable internet companies, underscoring the challenges facing the search giant from a weakening economy to intensifying competition.NetEase Inc., China’s second-largest gaming house, has overtaken Baidu in market value after posting better-than-expected quarterly earnings last week. Shares of NetEase have gained 11% this year, while Baidu’s plunged 40%. The latter company, once touted as a member of China’s internet triumvirate alongside Alibaba Group Holding Ltd. and Tencent Holdings Ltd., has bled $66 billion of capitalization since its peak in May 2018 -- the equivalent of one Morgan Stanley.Baidu has struggled to fend off competition from the likes of Tencent and ByteDance Inc., both of which are luring smartphone-savvy consumers and advertisers to their popular mini-video and social media apps.The company enjoyed a near-monopoly in Chinese internet search after Google departed the market in 2010 over government censorship. This week, ByteDance launched its own standalone search engine, posing a serious threat to the almost two-decades-old Baidu. The company was previously pushed out of the Top 3 in market value by e-commerce operator JD.com Inc. and food delivery service Meituan.Baidu, together with rivals Alibaba and Tencent, has long formed part of a trio of leading internet companies known by the acronym BAT. Now even that title seems under threat, with some dubbing ByteDance the new “B” in the group. Baidu in May posted its first quarterly loss since its 2005 stock market debut, after the Chinese economy slowed and rivals chipped away at its advertising sales.To contact the reporter on this story: Zheping Huang in Hong Kong at email@example.comTo contact the editors responsible for this story: Edwin Chan at firstname.lastname@example.org, Colum MurphyFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
When you buy shares in a company, it's worth keeping in mind the possibility that it could fail, and you could lose...
(Bloomberg Opinion) -- It’s time for Chinese internet executives to embrace the slowdown.Heady days of 50% sales growth are over, which means they needn’t keep burning marketing money to chase revenue that isn’t there. Part of this slowdown is due to both Chinese and global economic weakness, yet much of it was the inevitable conclusion to a long and lucrative boom in the world’s hottest industry. The sooner management accepts this new reality, the sooner they can start delivering stable earnings growth. Investors have already shown impatience. The CSI Global China Internet index – a collection of 30 companies that includes Alibaba Group Holding Ltd. and Tencent Holdings Ltd. as well as lesser-known Mango Excellent Media Co. – has dropped 22% over the past year. By contrast, the Dow Jones Internet Composite Index, which tracks the likes of Amazon.com Inc. and Snap Inc., is off just 2%. A quick look at revenue for these Chinese companies tells the tale. As recently as a year ago, top-line growth surpassed 50% across the industry, spurred by massive rises at Alibaba and Xiaomi Corp. On a more balanced basis, the median growth rate was 10 to 15 basis points slower, which is still significant.And yet operating income fell far behind, dropping into a decline on a weighted basis with median growth rates in the single digits. I’ve warned about this disconnect between revenue growth and profits. The problem has been that management, and investors, became so obsessed with the top line that they lost sight of the bottom. Which is why companies spent big on marketing to ensure revenue numbers kept hitting those heady heights.The result was a negative correlation between revenue growth and operating income expansion. That’s not the way it should be. Companies should reap the rewards for selling more of their wares, not suffer for it.Now there are signs that this obsession with growth may be coming to an end. After more than a year of using marketing dollars to juice revenue, some of the more savvy management teams have reined in spending. They’re pragmatic enough to recognize that in this new, more sedate era there’s a limit to how much they can gain from chasing users.We’re in the early phases of the June-quarter earnings season, but there are already encouraging signs. NetEase Inc., the online games and content company, cut its sales and marketing budget by 22% after reducing it by 32% the prior quarter. The result is that while revenue climbed only 15%, operating profit expanded 49%. The stock was rewarded with a 13% rise over the following two days.China Literature Ltd., a provider of e-books and online publishing, by contrast reaped little reward from an 85% increase in marketing expenses for the first half, posting revenue growth of just 30% and a 15% drop in operating income. The company showed weakness in its paid-reading business while its free model has yet to be fully monetized, analyst Wei Ming of China International Capital Corp. wrote Tuesday, noting that the company faces continuing regulatory headwinds. Investors saw the folly in spending big on marketing when there are limits to driving revenue, sending the stock down as much as 19% in Hong Kong.Both Alibaba and Tencent will report earnings in coming days. Investors have come to understand that revenue growth isn’t what it used to be. If management embraces this new normal, then shares may enjoy the rewards of fiscal discipline. To contact the author of this story: Tim Culpan at email@example.comTo contact the editor responsible for this story: Patrick McDowell at firstname.lastname@example.orgThis column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.Tim Culpan is a Bloomberg Opinion columnist covering technology. He previously covered technology for Bloomberg News.For more articles like this, please visit us at bloomberg.com/opinion©2019 Bloomberg L.P.
Tencent's (TCEHY) second-quarter 2019 results are likely to benefit from gaming portfolio strength, improving social networks revenues and momentum in cloud services.
Video game publisher Activision Blizzard late Thursday beat Wall Street's targets for the second quarter, but disappointed with its sales guidance. Activision stock wavered in late trading.
NetEase (NTES) shares have risen almost 10.0% in early market trading on Thursday. The company announced its second-quarter results on Wednesday.
BEIJING , Aug. 7, 2019 /PRNewswire/ -- NetEase, Inc. (NASDAQ: NTES) ("NetEase" or the "Company"), one of China's leading internet and online game services providers, today announced ...
Don't be caught off-guard: NetEase (NASDAQ: NTES ) releases its next round of earnings this Wednesday, August 7. Want to skip the homework and get all the facts in one place? We thought so. Here is your ...