Investment summary 4
Best structural growth play in our China TMT universe 4
Sub-sector outlook 6
Initiating coverage 7
Financials & valuation: 13
Financials & valuation: 14
Earnings drivers 15
Tencent 15
Baidu 17
Risks 19
Industry risk 19
Company-specific risk 19
Top line projection 21
Positive industry trends 21
Segmenting the Internet 21
Competitive landscape 25
Tencent 25
Baidu 28
Appendix 31
Tencent (700 HK) 32
Company background 32
Business description 32
MVAS 34
On-line advertising 35
E-commerce 36
Baidu (BIDU) 37
Company background 37
Business description 38
Comparison with Google 38
Disclosure appendix 42
Disclaimer 45