The calculations below outline how an intrinsic value for
is arrived at by discounting future cash flows to their present value. We use
analyst's estimates of cash flows going forward 5 years.
See our documentation to learn about this calculation.
|Levered FCF (CNY, Millions)||CN¥15,569.67||CN¥21,351.07||CN¥24,402.37||CN¥32,239.19||CN¥37,035.99|
|Source||Analyst x6||Analyst x10||Analyst x10||Analyst x4||Analyst x3|
Discounted (@ 10.5%)
Present value of next 5 years cash flows:
Terminal Value = FCF2021 × (1 + g) ÷ (Discount Rate – g)
Terminal Value = CN¥37,036 × (1 + 2.47%) ÷ (10.5% – 2.47%)
Terminal value based on the Perpetuity Method where growth (g) =
Present value of terminal value:
Equity Value (Total value) = Present value of next 5 years cash flows +
CN¥380,507 = CN¥93,760 + CN¥286,747
Value = Total value / Shares Outstanding (CN¥380,507 / 347)Discount to Share Price
Value per share (CNY): CN¥1095.85Exchange rate CNY/USD = 0.151
Value per share (USD): $165.81
Current discount (share price of $233.48): -40.81%
The discount rate, or required rate of return, is estimated by calculating the Cost of Equity.
Discount rate = Cost of Equity = Risk Free Rate + (Levered Beta * Equity Risk Premium)
Discount rate = 10.5% = 2.47% + (1.067 * 7.53%)
The Levered Beta is the Unlevered Beta adjusted for financial leverage. It is limited to 0.8 to 2.0 (practical range for a stable firm). Note the market value of equity is used not the book value ($80,493,731,954).
Levered Beta = Unlevered beta (1 + (1- tax rate) (Debt/Equity))
1.067 = 0.995 (1 + (1- 35%) (11.05%))
Levered Beta used in calculation = 1.067
Mr. Robin Li Co-Founded Baidu, Inc. in January 2000 and has been its Chief Executive Officer since January 2004 and oversees its overall strategy and business operations. Mr. Li served as the President of Baidu, Inc. from February 2000 to December 2003. He served as an Engineer of Infoseek from July 1997 to December 1999. He served as Senior Consultant of IDD Information Services from May 1994 to June 1997. He serves as the Chairman of Baidu Venture and Baidu Capital. He has been the Chairman of iQiyi.com Inc., since 2010 and Baidu, Inc. since January 2000. He served as Chairman and Director of Qunar Cayman Islands Limited since June 2012 until January 4, 2016. Mr. Li has been an Independent Director of New Oriental Education and Technology Group since September 6, 2006. He has been a Director of Ctrip.com International Ltd. since October 26, 2015. In 1996, he was awarded a US patent by consolidating web page quality-based sequencing and interrelationship-based sequencing. In 1998, he published a book “Silicon Valley Business War” in Mainland China, based on his own working and living experiences in Silicon Valley. Mr. Li holds a Bachelor of Science Degree in Information Management from Peking University in 1991 and a Master of Science Degree in Computer Science from the State University of New York at Buffalo in 1994.
Average tenure and age of the Baidu management team in years:
Average tenure and age of the Baidu board of directors in years:
Baidu, Inc. provides Internet search services in China and internationally. It operates through three segments: Search Services, Transaction Services, and IQiyi. It offers Chinese language search platform on its Baidu.com Website that enables users to find relevant information online, including Web pages, news, images, documents, and multimedia files through links provided on its Website; and transaction platform, including Nuomi.com to connect online and offline services provided by third-parties. The company also provides transaction services, such as Baidu Nuomi, Baidu Deliveries, Baidu Mobile Game, Baidu Wallet, Baidu Maps, and others; and iQiyi, an online video platform with a content library that includes licensed movies, television series, cartoons, shows, and other programs. In addition, it offers auction-based pay-for-performance services; online marketing services based on search queries, contextuals, audience attributes, media and placement attributes, and other forms; and consultative services. The company serves online marketing customers, including SMEs, large domestic companies, and Chinese divisions and subsidiaries of multinational companies operating in the retail and ecommerce, local services, medical and healthcare, network service, financial services, education, online games, transportation, construction, business services, and decoration industries. The company was formerly known as Baidu.com, Inc. and changed its name to Baidu, Inc. in December 2008. Baidu, Inc. was founded in 2000 and is headquartered in Beijing, the People’s Republic of China.
No 10, Shangdi 10th Street,
|Exchange Symbol||Ticker Symbol||Security||Exchange||Country||Currency||Listed on|
|NasdaqGS||BIDU||SPON ADR REP A||Nasdaq Global Select||US||USD||05. Aug 2005|
|DB||B1C||SPON ADR REP A||Deutsche Boerse AG||DE||EUR||05. Aug 2005|
|XTRA||B1C||SPON ADR REP A||XETRA Trading Platform||DE||EUR||05. Aug 2005|
|SWX||BIDU||SPON ADR REP A||SIX Swiss Exchange||CH||CHF||05. Aug 2005|
|WBAG||BIDU||SPON ADR REP A||Wiener Boerse AG||AT||EUR||05. Aug 2005|
|BMV||BIDU N||SPON ADR REP A||Bolsa Mexicana de Valores||MX||MXN||05. Aug 2005|
|SGX||K3SD||SPON ADR REP A||Singapore Exchange||SG||USD||05. Aug 2005|
|Industry:||Internet Software and Services|