The increasing monetization ability of the Chinese Internet continues to drive the sector in the near term, including different business models, such as search, online gaming and e-commerce, says Wendy Huang, an Analyst at the Royal Bank of Scotland Group plc.
“Currently, the monetization of the Chinese Internet sector is still way below that of the U.S. level. So I think in China they still have some room to increase in terms of the revenue per user, and also in terms of the monetization ability of the different models,” she said.
Huang picks Baidu, Inc. (BIDU), a major Internet company and online traffic generator, as her best choice for investors, who are looking for solid earnings in 2012. She says Baidu has more than 400 million monthly active users and user penetration higher than 90%.
“I would say Baidu is still enjoying the high traffic growth and also their search business model still has several years to go in terms of revenue growth and earnings growth. So the high scalability of the search business model will still help Baidu in the next one to three years,” she said.
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