Friday's Asia ADR Recap

The Shanghai Composite Index fell 25 points, or 0.7%, to 3,557, and Hong Kong's Hang Seng Index closed down 164 points, or 0.6%, at 25,516.

Baidu.com (BIDU), China's search engine king, announced its first-quarter net profits surged as online marketing revenue more than doubled and the number of customers increased. The company said first-quarter net profits jumped 71% to $20.9 million, or 60 cents a share, matching Wall Street estimates; and revenue soared 108% to $81.9 million, vs. estimates of $75 million. The company said first-quarter online marketing revenue was $81.7 million, a 108.5% increase from a year earlier. Online marketing customers for the first-quarter came in at 161,000, a 43.8% rise from a year ago. Baidu forecasted higher second-quarter revenue in the range of $111 million to $114 million, vs. estimates of $101 million.

Citi Investment Research analyst Jason Brueschke upgraded Baidu to buy from hold and raised his price target to $415 from $350, citing the bullish guidance and Baidu's ability to keep costs down. American depositary shares of Baidu ripped 6.3% higher to $363.69 on above-average trading volume.

Citi Investment Research also upgraded Chinese Internet portal operator Sohu.com (SOHU) from hold to buy and raised its price target from $56 to $80. Analyst Jason Brueschke said Sohu.com will likely beat first-quarter profit estimates due to strong growth from its Olympics sponsorship and booming new online game sales. "The Olympics will likely help Sohu.com grow into 2009," said Brueschke. Susquehanna joined the party and raised its price target for Sohu.com to $68 from $61 and kept a positive rating on the stock. Shares of Sohu rose 6.6% to $61.84 on twice the stock's average daily trading volume.