1. Lam Ching Johnny 2008060135

2.  Chinese-language Search Engine  NASDAQ: BIDU  2005 IPO price: US$27  Current stock price: US$609.50

3.  4 January 2010 stock price: US$410.03  Current stock price: US$609.50  YTM: about 50% 2010

4. Business overview - serving 3 types of online participants  Users Chinese language internet search services community-based products and entertainment platformproducts e.g. Baidu Post Bar, Baidu Knows, Baidu Space  Customers online marketing services e.g. auction-based Pay for Performance (P4P) services  Baidu Union Members third-party web content and software providers

5. Products

6. By 31 December 2009:  China Internet users: 384,000,000 - 28.9% annual growth rate  Total search engine users: 280,000,000 - 38.6% from the previous year  Search engine market: RMB 6.95 billion - 38.2% from the previous year Source: China Internet Network Information Center(CNNIC) Internet Statistics 2009 Search Engine Market Size in China > US population

7. Search Engine Market Share Distribution in China By 31/12/2009: Market ShareYoY change 76.0% +2.8% 18.9% (1.8%) Others (Sogou, Yahoo China, Youdao, etc) 5.1%(1.0%)

8. Search Engine Market Share Distribution in China Market ShareYoY change 76.0% +2.8% 18.9% (1.8%) Others (Sogou, Yahoo China, Youdao, etc) 5.1%(1.0%) > > After 22/03/2010 > > >  

9. Market ShareYoY change 76.0% +2.8% Google.cn  Google.com.hk Others (Sogou, Yahoo China, Youdao, etc) 5.1%(1.0%) Search Engine Market Share Distribution in China > > After 22/03/2010 > > >  

10. Baidu Google.cn  Google.com.hk Search results Ranks phonetic alphabet for Mandarin ( Pinyin ) better Google.com.hk does not rank Pinyin Paid results (a lot) displayed before natural results (Less than 3) paid results displayed before Natural Results Human intervention on search result is highly likely Less Human Intervention on search result Dominance Higher share of search on Countryside Higher share of search on Big Cities  Growing internet access in Countryside  More Baidu users

11. Summary  Growing market size of search engine  Growing market share of Baidu Exit of major competitor: Google China (redirects to Google Hong Kong) Growing internet access in countryside  Recommendation Buy

12. Thank You