Following the controversy that Baidu Inc. recently got involved in, a quantitative value investing expert predicted that the search engine giant can defend its position as China's most dominant Internet company even if Google returns to the mainland.
Equities analysts have dropped their price targets on Baidu over the past few weeks. According to Fairfield Current, three gave the Chinese search engine a Sell recommendation. Three others gave a Hold listing, while fourteen issued a Buy rating.
The average Buy ratings provided by analysts put Baidu on a seemingly tight position. Adding to the issue is veteran journalist Fang Kecheng's viral article that condemned the tech giant for reportedly prioritizing its Baijiahao content over other quality stories created by reliable outlets.
Netizens shared their insights on the issue, with some stating that they have stopped using Baidu because of its search result priorities. Other media outlets have shared the article and it has since received over a million views.
Despite the issues, investment expert Aimo Pieterse predicted that Baidu's multiple initiatives for the coming years and its overall value could be enough to keep the search engine giant on top of the game.
In his analysis report for Seeking Alpha, Pieterse said noted that Baidu stock prices dropped but this does not mean the Chinese tech giant can no longer stand against competitors like Google and Bing.
Pieterse believes that Baidu can still rise above the issues it was entangled in over the past years. While there have been rumors suggesting that American search engine Google will resume operations in the mainland, Baidu's strong presence in the Chinese Internet realm could give it a dominant edge over other providers.
The analyst further explained that Baidu has stepped out of its comfort zone. Aside from search engine dominance, the company has since started exploring artificial intelligence (AI) projects. Pieterse noted that this diversified approach could be the gauging factor for interested investors to keep an eye on the Chinese firm.
Baidu has also entered other sectors such as autonomous driving and speech and image recognition. The company also has a 19 percent stake in Ctrip.com, a popular online travel website.
China's leading search engine has gone through ups and downs but Pieterse believes there is a chance for redemption. Spin-off businesses that Baidu recently engaged in could open opportunities in the near future, contrary to popular belief that stock price dips are the only factors investors should consider.
