Rising one notch to No. 2 is Jiong Shao. The Macquarie Capital Securities analyst is “very well connected,” say one booster, “and provides comprehensive and insightful views on the overall market dynamics.” Shao believes that, despite a recent rise in valuations, the sector’s long-term prospects look “extremely promising as China strives to transform to a more technology-, Internet- and consumption-driven economy.” Big-picture issues that can affect the group include changes to regulations regarding censorship, the type of content shown on online video players and the number of applications preinstalled on smartphones, he notes. In addition, the mobile Internet is a game changer since the companies that “control [its] access points are likely to significantly strengthen their competitive positioning,” says Shao. His favorite names are Ctrip.com International, Qihoo 360 Technology Co. and Youku Tudou. Shanghai’s Ctrip, the leader in the rapidly expanding online travel market in China, is experiencing revenue growth reacceleration and margin expansion, he says. Beijing-based Qihoo provides antivirus products and is the dominant player in the app store arena, which should “reap the most significant economics in the mobile Internet value chain,” Shao predicts, because it is the gateway between users and tens of thousands of application and game developers. As for Youku, which is on “the cusp of becoming profitable,” he contends, the Beijing-based online television player’s bargaining power will increase substantially as movie and TV show production expands over the next few years. — Carolyn Koo |
The 2013 All-China Research Team: Internet, Second: Jiong Shao