Baidu Valuation Cut in Half as Ad Sales Slide Dims Profit

Baidu Inc. is trading more than 50 percent below its average valuation over the past five years as the Chinese Internet company struggles to diversify while maintaining profit growth amid a slowdown in advertising.

American depositary receipts of Baidu, owner of China’s most-used search engine, sank 7.9 percent April 26 to trade at 15 times estimated earnings. That compares with an average multiple of 36 since 2008, data compiled by Bloomberg show. The slump drove a 1.4 percent drop in the Bloomberg China-US Equity Index of the most-traded Chinese stocks in the U.S.