Baidu Shares Continue Higher Following Yesterday's Raised Price Target from Citi

In a report published Thursday, Citi Research analyst Muzhi Li raised

PT from $167 to $175. Li commented on Baidu's gains in mobile monetization through "1) mobile paid search, 2) contextual ads, and 3) mobile VAS (mostly games)." Citi estimated mobile contributions for FY13 and FY14 to be 14% and 21% of sales respectively, due to an increase in mobile search volumes and mobile ads. Li further noted Baidu's acquisition of 91 Wireless and, thus, expansion into mobile games and app distribution. This acquisition should improve Baidu's margins and cash flow. The Chinese search engine ranks as number 1 in user traffic in China and number 5 globally. Citi recommends to Buy Baidu with a PT of $175 which reflects long-term growth. The analyst reminded investors that Baidu's PC search market growth and shares are decreasing. In addition, the analyst noted that the integration of mobile gaming from their acquisition is competitive and could prove challenging. Shares of Baidu closed Thursday's session up more than 2 percent and are continuing higher Friday. The stock is up more than 5 percent to $162 at last check.