Tài liệu Nothing But Net 2009 Internet Investment Guide 28 pptx

271 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 189: YHOO Annual Cash Flow Statement $ in millions FY-07 FY-08E FY-09E FY-10E Net Income 660.0 909.6 460.6 444.7 D&A 659.2 813.5 880.0 900.0 Tax Benefit (21.2) 52.2 - - Excess Tax Benefit from SBC - - Equity (150.7) (592.5) (250.0) (265.0) Minority Interests 18.0 3.0 - - Stock Based Compensation 572.4 480.8 720.0 820.0 Other Non-Cash Items (149.8) 658.2 - - Changes in Working Capital 366.5 658.2 (4.9) (14.7) Accounts Receivable - 56 36.8 110.6 Prepaid Expenses - 216 14.2 42.8 Accounts Payable - 17 5.9 17.7 Accrued Charges - (28) 36.8 110.6 Deferred Revenue - (69) 13.3 39.8 Other Operating - - - - Cash From Operations 1,960.9 2,353.1 1,805.7 1,885.0 FCF 1,352.1 1,699.1 1,055.7 1,095.0 INVESTING CASH FLOWS Capital Expenditures (602.3) (732.9) (750.0) (790.0) Net Investment 216.4 (380.4) - - ST Investment Purch. (112.0) - - - ST Investments Mat. 899.0 - - - Acquisitions (973.6) (209.2) - - Cash From Investing (572.5) (1,322.5) (750.0) (790.0) FINANCING CASH FLOWS Common Stock Issued 375.1 331.4 - - Shares Repurchased (1,583.9) (79.2) - - Structured stock repurchase (250.0) - - - Excess Tax Benefit from SBC (6.5) 78.9 - - Other financing activities, net (18.6) (8.5) - - Long Term Debt - - - - Cash From Financing (1,484.0) 322.5 - - Foreign Exch Effects 39.7 (79.4) - - Net Change In Cash (55.9) 1,273.7 1,055.7 1,095.0 Cash at Beginning 1,569.9 1,513.9 2,787.7 3,843.4 Cash at End 1,514.0 2,787.7 3,843.4 4,938.4 Source: Company reports and J.P. Morgan estimates. 272 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com 273 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com International Company Outlooks International Company Outlooks 274 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com 275 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Baidu, Overweight, ($126.93) We maintain our Overweight rating on Baidu, the dominant market leader in China's online search market, which is still in an early high-growth stage. Our Dec-09 price target is US$300, which implies 67.6x FY08E, 50.7x FY09E and 35.3x FY10E diluted GAAP EPS, or 62.7x FY08E, 48.0x FY09E and 34.0x FY10E adjusted diluted EPS. • We believe online search advertising is still in an early high-growth stage in China, driven by: (1) rising Internet penetration, (2) significant growth in websites and pages, (3) higher search usage (due to greater mass of web content), and (4) large number of SMEs (with small ad budgets) turning to search advertising (due to the higher ROI). We expect the paid search market in China to grow over 40% Y/Y in 2009 and 2010 each (following ~64% growth for 2008, as per our estimates). • Baidu remains the dominant player in China’s search market with ~65% market share as of 3Q08 (as per iResearch estimates) and also the highest Internet traffic in China (as per Alexa estimates). We expect Baidu to maintain its leadership in China due to: (1) our view that its products are tailored better to local needs (e.g., music search and Baidu Knows - community Q&A site), (2) its strong local brand name, (3) good relationship with the Chinese government, (4) its good Chinese search technology, and (5) it has among the widest distribution networks in China (a key to market development and driving sales), and is well ahead of competitors in search. • We expect Baidu to see a negative impact in 4Q’08 and 2009 from the medical and pharmaceutical customer removal issue (following a CCTV report in mid- Nov. on unlicensed entities advertising via Baidu), as these customers account for 10-15% of Baidu’s total revenue. We believe the stock is likely to trade weakly in the near term until there is more clarity on the impact on 2009. However, we believe this recent “hiccup” is positive for Baidu in the long term, as Baidu is now taking the right steps to address the longer-term user experience and monetization issues, which should put the company on the right path to continue to grow in the early-stage search market. Thus, we remain positive on Baidu. • With the impact from the medical and pharmaceutical customer issue, we had revised down our ’08E/’09E earnings by 4% and 18%, respectively (on 10 Dec 2008). For 4Q’08, we expect total revenue of US$138.1M, up 2% Q/Q and 64% Y/Y, with gross margin of 62.2% (down from 66.4% in 3Q’08) and adj. operating margin of 36.1% (down from 41.9% in 3Q08). We forecast GAAP diluted EPS of US$1.27, down 14% Q/Q but up 37% Y/Y. • 2009 Drivers: In our view, the following factors will drive shares in 2009: (1) more clarity on 2009 impact from medical & pharmaceutical customer removal issue, (2) continued strong execution to drive sales and margins, (3) official launch of C2C ecommerce site, and (4) continued solid growth in China’s Internet usage and SME search adoption. Our financial estimates for Baidu are in the table below: 276 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 190: Baidu Financial Snapshot $ in millions, except per share data 4Q'08E F'08E F'09E F'10E F'08E Y/Y F'09E Y/Y F'10E Y/Y J.P. Morgan Revenue 138.1 471.2 667.2 947.2 103% 42% 42% EBITDA 62.5 218.4 307.1 449.7 114% 41% 46% GAAP EPS 1.27 4.44 5.92 8.49 85% 33% 43% Adj. EPS 1.36 4.79 6.25 8.82 87% 31% 41% Consensus Revenue 141.7 463.6 674.7 945.7 100% 46% 40% EBITDA 66.2 217.2 310.7 414.1 113% 43% 33% GAAP EPS 1.40 4.57 6.40 9.16 90% 40% 43% Adj. EPS 1.53 4.76 6.70 9.36 86% 41% 40% Source: J.P. Morgan estimates and Bloomberg. *Note: Adj. EPS excludes share-based compensation expense. Our Estimates and Outlook for 2009 We forecast net revenue of US$667.2M in 2009, up 42% Y/Y, and GAAP diluted EPS of US$5.92, up 33% Y/Y, or adjusted EPS (ex-share-based expense) of US$6.25, up 31% Y/Y. We expect continued growth in both active online marketing customers and revenue per customer, though with relatively higher growth in number of customers (as SME penetration remains very low – Baidu’s active customer base was 194k in 3Q’08, vs. China SME base of ~40M). On margins, we forecast gross margin at 60.4% for 2009 (conservative forecast as Baidu could potentially increase investment in bandwidth / servers for the long-term opportunities in China), down from 63.8% for 2008. We forecast TAC at slightly over 14% of revenue in 2009, up from ~13% in 2008 (as Baidu continues to sign deals that are positive to net revenue growth). We expect adjusted operating margin (ex-share-based expense) of 35.0% for 2009, down from 36.9% for 2008, and adjusted net margin of 33.0% for 2009, down from 35.4% for 2008. Our Estimates and Outlook for 2010 For 2010, we forecast net revenue of US$947.2M, up 42% Y/Y, and GAAP diluted EPS of US$8.49, up 43% Y/Y, or adjusted EPS of US$8.82, up 41% Y/Y. We forecast gross margin at 59.5% (slightly lower Y/Y); adjusted operating margin of 35.0% (stable Y/Y) and adjusted net margin of 33.3% (also stable Y/Y). Price Target, Valuation and Rating Analysis We maintain our Overweight on Baidu, as it remains the market leader in China’s online search market, which we believe is still in an early high-growth stage. Our Dec-2009 price target is US$300, which implies PEG of 1.3x, which we believe is reasonable given the strong China Internet usage growth and early stage of search advertising. Our price target implies 67.6x FY’08E, 50.7x FY’09E and 35.3x FY’10E diluted GAAP EPS, or 62.7x FY08E, 48.0x FY’09E and 34.0x FY’10E adjusted diluted EPS. In addition, we believe earnings upside in 2009 could come from banner advertising, C2C ecommerce services and potential margin leverage. 277 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Risks to Our Rating Risks to our rating and price target include: (1) lower-than-expected online search spending in China, (2) large infrastructure-related (servers and bandwidth) spending, (3) near-term distributor transition in a couple of cities (FuShan and Dongguan in 2Q08), (4) unsuccessful ecommerce and Japan search initiatives, and (5) potential margin decline (from TAC increase, bandwidth cost increase, tax rate increase or significant labor cost increase). 278 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 191: BIDU Annual Income Statement $ in millions INCOME STATEMENT 2007 2008E 2009E 2010E Total Revenue 231.6 471.2 667.2 947.2 Online marketing services 231.2 470.6 666.6 946.7 Other services 0.5 0.6 0.5 0.5 COGS -85.5 -170.5 -264.3 -383.4 Gross Profit 146.2 300.7 402.9 563.8 Operating Expense -73.5 -138.9 -181.0 -243.8 SG&A expenses -52.3 -91.4 -117.6 -161.0 R&D expenses -15.9 -35.4 -51.7 -71.0 Share-based comps expenses -5.3 -12.0 -11.8 -11.8 EBIT 72.7 161.8 221.8 320.0 Adj. EBIT (ex-share-based exp.) 77.9 173.8 233.6 331.8 EBITDA 101.8 218.4 307.1 449.7 Net Interest Income 6.4 6.6 11.3 18.7 Net Other Income 2.7 1.4 0.0 0.0 Pre Tax Profit 81.8 169.8 233.1 338.7 Tax Expense/(Credit) 1.7 -15.2 -24.5 -35.0 Net Profit 83.5 154.6 208.6 303.6 Adj. Net Profit (ex-share-based exp) 88.8 166.6 220.4 315.4 Diluted EPS (US$) 2.40 4.44 5.92 8.49 Adj. Diluted EPS (US$, ex-share-based exp.) 2.56 4.79 6.25 8.82 Margins (%) Gross Margin 63.1 63.8 60.4 59.5 Adj. OPM 33.7 36.9 35.0 35.0 EBITDA Margin 44.0 46.3 46.0 47.5 Net Margin 36.1 32.8 31.3 32.1 Adj. Net Margin 38.3 35.4 33.0 33.3 Sequential Growth (%) Revenue 119.2 103.4 41.6 42.0 Gross Profit 95.2 105.7 34.0 40.0 EBIT 119.2 122.7 37.1 44.3 Net Profit 119.5 85.1 34.9 45.5 Adj. Net Profit 103.9 87.6 32.3 43.1 Diluted EPS 122.0 84.7 33.3 43.4 Adj. Diluted EPS 103.1 87.2 30.7 41.0 Source: Company reports and J.P. Morgan estimates. 279 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 192: BIDU Quarterly Income Statement $ in millions 1Q'07 2Q'07 3Q'07 4Q'07 1Q'08 2Q'08 3Q'08 4Q'08E 1Q'09E 2Q'09E 3Q'09E 4Q'09E Total Revenue 35.7 52.7 66.3 78.3 81.9 117.0 135.4 138.1 135.3 162.0 178.6 191.2 Online marketing services 35.6 52.6 66.2 78.1 81.7 117.0 135.2 137.9 135.2 161.9 178.4 191.1 Other services 0.1 0.1 0.1 0.2 0.2 0.1 0.1 0.1 0.1 0.1 0.1 0.1 COGS -13.2 -19.2 -24.1 -29.5 -32.5 -40.8 -45.4 -52.2 -53.5 -62.9 -70.7 -77.3 Gross Profit 22.5 33.5 42.2 48.8 49.4 76.2 89.9 85.9 81.8 99.1 107.9 114.0 Operating Expense -13.0 -16.5 -19.8 -24.6 -28.4 -35.9 -35.7 -39.0 -39.1 -43.8 -47.6 -50.5 SG&A expenses -8.6 -11.9 -14.7 -17.4 -19.8 -23.0 -23.0 -25.7 -25.7 -28.3 -30.8 -32.7 R&D expenses -2.8 -3.5 -4.3 -5.4 -6.3 -8.7 -10.2 -10.4 -10.5 -12.6 -13.8 -14.8 Share-based comps expenses -1.6 -1.2 -0.7 -1.8 -2.3 -4.3 -2.5 -2.9 -2.9 -2.9 -2.9 -2.9 EBIT 9.6 16.9 22.4 24.2 21.0 40.3 54.2 46.9 42.7 55.3 60.3 63.5 Adj. EBIT (ex-share-based exp.) 11.1 18.1 23.2 26.0 23.3 44.6 56.8 49.9 45.7 58.2 63.3 66.4 EBITDA 15.3 23.6 29.8 33.7 32.9 54.9 68.7 62.5 59.7 75.2 83.1 89.1 Net Interest Income 1.5 1.5 1.6 1.8 1.5 1.5 1.7 1.9 2.3 2.7 3.0 3.3 Net Other Income 0.2 0.4 0.5 1.7 -0.1 1.0 0.4 0.0 0.0 0.0 0.0 0.0 Pre Tax Profit 11.3 18.9 24.6 27.6 22.5 42.8 56.4 48.8 45.0 58.0 63.3 66.8 Tax Expense/(Credit) -0.2 -0.2 -0.3 2.5 -1.5 -4.2 -5.1 -4.4 -4.8 -6.1 -6.6 -7.0 Net Profit 11.1 18.6 24.3 30.1 20.9 38.6 51.2 44.4 40.2 51.9 56.7 59.8 Adj. Net Profit (ex-share-based exp) 12.7 19.8 25.0 32.0 23.2 42.9 53.7 47.4 43.2 54.8 59.6 62.8 Diluted EPS (US$) 0.32 0.54 0.70 0.87 0.60 1.11 1.47 1.27 1.15 1.47 1.61 1.69 Adj. Diluted EPS (US$, ex-share-based exp.) 0.36 0.57 0.72 0.92 0.67 1.23 1.54 1.36 1.23 1.56 1.69 1.77 Margins (%) Gross Margin 63.1 63.5 63.7 62.3 60.4 65.1 66.4 62.2 60.5 61.2 60.4 59.6 Adj. OPM 31.2 34.4 35.0 33.2 28.5 38.1 41.9 36.1 33.8 35.9 35.4 34.7 EBITDA Margin 42.9 44.7 44.9 43.1 40.1 47.0 50.8 45.3 44.1 46.4 46.5 46.6 Net Margin 31.0 35.4 36.6 38.5 25.5 33.0 37.8 32.2 29.7 32.0 31.7 31.3 Adj. Net Margin 35.5 37.6 37.7 40.8 28.3 36.7 39.7 34.3 31.9 33.8 33.4 32.8 Sequential Growth (%) Revenue 2.6 47.7 25.7 18.1 4.6 42.8 15.7 2.0 -2.0 19.8 10.2 7.1 Gross Profit -9.3 48.7 26.1 15.6 1.4 54.1 18.0 -4.5 -4.7 21.1 8.9 5.6 EBIT -26.7 77.2 32.4 7.7 -13.0 91.7 34.6 -13.5 -8.9 29.4 9.1 5.2 Net Profit -29.6 68.4 30.1 24.3 -30.6 84.8 32.6 -13.3 -9.4 28.9 9.3 5.6 Adj. Net Profit -24.1 56.6 26.1 27.9 -27.4 84.8 25.3 -11.9 -8.8 26.9 8.8 5.3 Diluted EPS -29.6 68.2 29.9 24.1 -30.6 84.7 32.6 -13.7 -9.7 28.4 8.9 5.2 Adj. Diluted EPS -24.0 56.4 25.9 27.8 -27.3 84.7 25.3 -12.2 -9.1 26.5 8.4 4.9 Source: Company reports and J.P. Morgan estimates. 280 Global Equity Research 05 Januar y 2009 Imran Khan (1-212) 622-6693 imran.t.khan@jpmorgan.com Table 193: BIDU Annual Balance Sheet $ in millions 2007 2008E 2009E 2010E Cash & Cash Equivalents 211 409 588 899 Account Receivables 9 15 21 30 Other Current Assets 9 25 35 50 Total Current Assets 229 449 644 979 Net Fixed Assets 103 147 262 362 LT Investments 2 3 3 3 Other LT Assets 19 27 26 24 Total Long Term Assets 124 177 291 390 Total Assets 353 626 934 1,369 ST Debt - - - - Accrued Expenses and Payables 48 86 120 169 Other Current Liabilities 36 78 109 158 Total Current Liabilities 84 164 230 327 LT Debt - - - - Other LT Liabilities 0 - - - Total Liabilities 84 164 230 327 Share Capital 0 0 0 0 Additional Paid-in Capital 156 190 222 255 Other Reserves (11) (19) (19) (19) Retained Earnings 124 290 502 806 Preferred Stock - - - - Total Equity 268 461 705 1,042 Total Liabilities and Equity 353 626 934 1,369 Source: Company reports and J.P. Morgan estimates. . Expenditures (602.3) (732.9) (750.0) (790.0) Net Investment 216.4 (380.4) - - ST Investment Purch. (112.0) - - - ST Investments Mat. 899.0 - - - Acquisitions. US$1.27, down 14% Q/Q but up 37% Y/Y. • 2009 Drivers: In our view, the following factors will drive shares in 2009: (1) more clarity on 2009 impact from medical