JG Capital, US investment research firm, released a research report today

The following is the full report:

Baidu reported strong second-quarter earnings, revenue and earnings per share exceeded analysts ' expectations, while third-quarter earnings forecasts were also better than analysts ' average forecasts. Baidu in the mobile business area made important progress, the second quarter mobile business accounted for Baidu's total revenue share of the first breakthrough 10%. We reiterated the "overweight" rating of Baidu shares and raised the target share price to 141 US dollars.

In the second quarter, Baidu revenue of 1.232 billion U.S. dollars, an increase of 39%, per share earnings of 1.26 U.S. dollars, down 5%, and analysts on average expected to be 1.2 billion U.S. dollars and 1.21 U.S. dollars respectively. This shows that the Chinese search engine market is developing rapidly, and Baidu's commercialization is strengthening. In the second quarter, Baidu's total customers grew 33% to 468,000. Average revenue per customer (ARPU) grew to 16,000 yuan. This is mainly driven by large enterprise customers. Operating margins were 38.4%, down from 50.6% in the same period last year, up from 37% in the previous quarter. We believe that Baidu's profitability will tend to stabilize, the future will gradually improve. Baidu's marketing costs rose to 15% of total revenue, an increase of 83%, this is mainly to promote the mobile platform Baidu. We think that in order to achieve future growth, Baidu such investment is necessary.

During the competition with Qihoo, Baidu is still improving the user experience. According to our data, Baidu in the Chinese search engine market share of about 64%, and Qihoo 17%.

The second quarter, the mobile business to Baidu total revenue contribution for the first time breakthrough 10%. Baidu expects this trend to continue. Baidu's acquisition of 91 of Wireless, pps and where to go will help strengthen mobile gaming, mobile video and mobile hotel booking business. The commercialization of mobile search is still strengthening, and Baidu's total revenue is not relevant. But we believe that Baidu is stepping up these investments to ensure future growth and a shift to the mobile business. Baidu Management did not disclose the specifics of each business, but we believe that the integration of the business is progressing well. Baidu Map currently in the Chinese online map market has a 40% share, higher than the 23% of the software. Archie and PPS have become the largest number of Chinese users of online video services. Where to go hotel and ticket bookings are growing fast.

Baidu expects third-quarter revenues to be 1.422 billion to 1.46 billion dollars, up 39.7% to 43.3% per cent year-on-year, above analysts ' average of 1.359 billion dollars.

We reaffirm our "overweight" rating on Baidu shares and raise our target share price to $141.00 trillion. With 2014 earnings per share expected to be 7.05 U.S. dollars, which is equivalent to 2014 forward earnings multiples 20 times times.