J.P. Morgan launches investment report today to keep Baidu's equity holdings rating

JPMorgan released its investment report today to maintain its nasdaq:bidu "overweight" rating, while maintaining its 210 dollar target share price unchanged.

The following is a summary of the contents of the report:

Baidu's share price is likely to fall after the release of fiscal year 2013, mainly because Baidu's 2014-year profit margin is expected to be lower than market expectations and largely dragged down by investment. We suggest that in the downturn to buy Baidu shares, mainly because: 1 Baidu's own business has not deteriorated, on the contrary, strong performance. 2 investment can be expected to receive immediate returns this year. 3 We anticipate that operating margins will recover to more than 30% over the next 1-2 years, mainly thanks to the promotion of search advertising.

First-quarter results: Baidu's first-quarter results for the 2014 fiscal year are expected to be 3% to 6% higher than our expectations, which will be the third consecutive quarterly revenue increase accelerated. In terms of profits, Baidu expects 2014 profit to be unchanged from 2013.

Return on investment: Baidu's performance in 2013 shows that its investment strategy will be rewarded more in the long run. And a new round of investment will help Baidu win more search market share. We expect the new investment to receive significant revenue returns over the next few years.

Valuation: We will be the Baidu 2014 per share of diluted earnings forecast to be lowered by 27%, but the 2016 and 2017 per share of diluted earnings expected to increase by 5% and 10% respectively.

Rating: We continue to maintain the "overweight" rating of Baidu shares, while maintaining a 210 dollar target share price unchanged.