Technical analysis of Baidu

Accuracy score :
97%

Baidu is the largest Internet search engine in China with mid-70s mobile traffic share in the search market. The firm generates 86% of revenue from online marketing services and the rest from other segments. Baidu is a technology-driven company and has been investing in artificial intelligence technology, such as autonomously driven cars. Baidu was incorporated in January 2000 and it is one of the largest internet companies in the world. In December 2007, Baidu became the first Chinese company to be included in the NASDAQ-100 index. In October 2018, Baidu became the first Chinese firm to join the United States-based computer ethics consortium Partnership on AI.

Summary (from the latest annual and quarterly report)

  • Total equity: 24 billion USD
  • Market Cap is 34.18 billion USD ( the last price of the stock is 97.60 USD)
  • Baidu is the largest Internet search engine in China with mid-70s mobile traffic share in the search market. The firm generates 86% of revenue from online marketing services and the rest from other segments
  • Total stockholders' equity has increased from 13.3 billion USD in 2016 to 24 billion in 2019
  • The company has 3 billion USD in cash on account (from the latest quarterly report  2019)
  • Total equity – cash on account = 24 billion USD – 3 billion USD = 21 billion USD
  • In 2019 the company has 8.7 billion USD long-term debt, short – term debt is 1.45 billion USD                                                          (In 2017 the company had 5 billion USD long-term debt, short-term debt was 1.12 billion USD)
  • The company's revenue has increased in 2018 to 14.9 billion USD from 12.18 billion in 2017
  • Net income in 2018 was 4 billion USD, Net income in 2017 was 2.6 billion USD

 

Technical analysis

This stock has weakened more than 60% since July 2018 and according to the rules of technical analysis, the "bearish" trend of this stock is still very strong. Baidu operations are primarily based in China, where the company derives almost all of its revenues. Total revenues in 2018 were RMB102.3 billion (US$14.9 billion), growing by 21% from 2017 (or 28%, if both years’ revenues were net of VAT). Net income attributable to Baidu, Inc. in 2018 was RMB27.6 billion (US$4.0 billion), a 51% increase from 2017. On this chart (the period from July 2018), I marked resistance and support levels. Support levels are 90 and 80 USD, 120 and 160 USD represent the current resistance levels. If the price jumps above 120 USD it would be a "BUY" signal and we have the open way to 130 USD. Rising above 160 USD supports the continuation of the bullish trend overview efficiently for the upcoming period. On the other side, if the price breaks 90 USD it would be a "SELL" signal and we have the open way to 85 and 80 USD.

 

The management believes that BIDU will drive long-term revenue growth and improved profitability in the upcoming years.

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