Five Key Things Brean Capital Analysts Are Watching At Baidu

In a report published Monday, Brean Capital analyst Fawne Jiang presented five key takeaways from a recent conference call with Baidu Inc's BIDU Director of Investor Relations Sharon Ng. "Baidu has transitioned from a searchcentric platform to a multi-channel mobile and PC platform, connecting users with information, content, and services," Jiang wrote. "We remain positive on BIDU's efforts to capture the opportunities presented by mobile, which should bode well for its long-term growth." Here are Jiang's five key takeaways:

• Despite China's macro slowdown, Baidu has not see a direct impact on its businesses and continues to expect growth due to an ongoing shift to online advertising, demand for advertising, fast adoption of mobile and the company's overall diversified vertical strategies.
• Mobile traffic has surpassed PC traffic in the third quarter 2014 and continues to grow. Baidu will continue to benefit from many mobile users that are accessing the Internet for the first time through mobile and bypassing PCs completely.
• Baidu is focused on categories that "mesh" well with existing strengths in search, map and group-buy that have high-frequency demand.
• Mobile advertising monetization has ramped up "nicely" over the past two years and are still trending higher. The company expects mobile monetization rate to surpass that of PCs in the future.
• Baidu remains "open-minded" in supplementing organic growth through investments and strategic partnerships in rapid growth areas.
• Baidu will shift investments towards greater marketing and promotional activities to reinforce pre-installs (educating users on Baidu apps) and support promotional activities and discounts to drive user growth of its products and services.
Shares are Buy rated with a $250 price target.