BIDU - A BUYING OPPORTUNITY - CITIGROUP SAYS

CITIGROUP SAYS BAIDU.COM IS ATTRACTIVE BUYING OPPORTUNITY, MAINTAINS BUY

Citigroup analyst Jason Brueschke says Baidu.com (BIDU) shares lost 30% of value in five days. He says the sell-off appears to have been caused by Cisco Systems' (CSCO) disappointing outlook last week for its U.S. enterprise business, but says Baidu's China search market has little fundamental correlation with near-term outlook for US router demand.

Brueschke notes that the company guided for accelerating fourth quarter revenue growth, and posted very strong third quarter fundamental metrics. He says BIDU remains his top pick in China Internet for 2008. He has a $425 target price, based on target multiple at a 70% premium to China Internet peers, mainly due to BIDU's higher-than-peers EPS growth prospects and potential of China's nascent search market.