BIDU: Mobile Drives 1Q15 Topline, Margin May Be Under Pressure from O2O Investment and Seasonality; Maintain Hold Rating
BIDU will report 1Q15 results on Wednesday, April 29th after the close of the market followed by an 8pm EST conference call. We are expecting BIDU to report 1Q revenue in line with the Street on strong mobile performance, and 2Q15 guidance to be at least in line with consensus. However, 2015 will be another investment year focused on rolling out new initiatives such as O2O, LBS, group-buy and food delivery, and continuing to promote its video business. While we believe these initiatives may help position Baidu for long term growth, margins may be pressured. As such, we maintain our Hold rating.