EFTA01457517

18 May 2015 Software & Services Baidu production. We note that there has been a tremendous amount of discussion around online video industry consolidation over the past several days. which has sent pure-play video stocks through significant share price gyrations. Valuation and risks Maintain TP of US$239 end Buy rating Our target price of US$239 is based on 1) 1.0x PEG, 2) non-GAAP FY15E EPS of US$7.99 and 3) FY15-17E EPS CAGR of 30%. Key downside risks: • Execution risk in mobile monetization • Decline in traffic growth and market share due to intensifying competition • Slowdown in online advertising market growth • Larger-than-expected investment in mobile and new initiatives Page 4 Deutsche Bank AG/Hong Kong CONFIDENTIAL — PURSUANT TO FED. R. CRIM. P. 6(e) DB-SDNY-0117090 CONFIDENTIAL SDNY_GM_00263274 EFTA01457517