Nomura Securities on China Internet & New Media: Takeaways From China Media Tour

Nomura Securities on China Internet & New Media:

Analyst, Jin Yoon's takeaways from our China media tour:

"Expect digital ads to surprise on the upside. Strong appetite is not likely to fade away, despite a slow start this year and macro headwinds. We remain positive on China digital media. The delta between the bullish outlook among agencies and the muted 1Q12F guidance from companies stems from: 1) many advertisers are holding back in anticipation of greater spending in 2Q-4Q, 2) the uncertain macro conditions in 1Q and 3) uncertain TV regulations in China. Baidu (Nasdaq: BIDU) remains our top pick in the sector, given its dominant position, strong demand outlook among SMEs and resilient search market with high ROI. We also have Buy ratings on Sina (Nasdaq: SINA), Focus Media (Nasdaq: FMCN) and Youku (Nasdaq: YOKU) due to the strong ads outlook and their strong pricing leverage."

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