Chinese Internet stocks traded mixed Friday, with Baidu.com Inc.'s shares rising after the search engine operator's first-quarter report, and shares of Sohu.com Inc. gaining ahead of its Monday report.
Baidu's American Depositary Shares rose $20.55, or 6 percent, to $362.55 in midday trading. In the past year, the stock has traded between $105.30 and $429.19.
Late Thursday, Baidu said its first-quarter profit rose 72 percent and revenue more than doubled. For the second quarter, Baidu expects revenue above the average estimate of analysts polled by Thomson Financial.
Several analysts reacted positively to Baidu's report, including Citi Investment Research analyst Jason Brueschke, who upgraded the stock to "Buy" from "Hold" in a Friday client note and raised his price target to $415 from $350.
Brueschke said the first quarter is Baidu's weakest seasonally, and noted its Japan operations costs were kept "well under management's control.
"We expect Baidu will continue to under-spend, further cushioning earnings in 2008," he wrote.
Brueschke also upgraded his rating for Internet portal operator Sohu.com Inc. Friday to "Buy" from "Hold" and raised his price target to $80 from $56. He predicted strong first-quarter results and ongoing growth.
Brueschke called Sohu "the best positioned company in the sector for the next 6 months, with its Olympics sponsorship and booming online game combining to produce historic outperformance" and he sees this success continuing into 2009.
Shares of Sohu rose $3.02, or 5.2 percent, to $61.03.
Elsewhere, online gaming stocks declined despite a prediction from Oppenheimer & Co. analyst Paul Keung that most of the companies will issue better-than-anticipated first-quarter reports.
ADS of Shanda Interactive Entertainment Ltd. _ a company whose earnings Keung thinks will meet or "marginally beat" consensus estimates _ fell 65 cents, or 2 percent, to $32.36.
ADS of The9 Ltd. fell 29 cents to $21.19. Keung predicted The9 will report "a declining quarter as its first quarter is seasonally weak."
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