BEIJING -- The Hang Seng Index in Hong Kong closed down 0.4% to 16,065 Monday, while the Shanghai Composite Index stayed in positive territory, gaining 1.1% to 1683. In New York trading Friday, China shares lost ground amid a broader market selloff. Sohu ( SOHU) was off 2% to $22.42; Ctrip ( CTRP) fell 3.4% to $49.50; and The9 ( NCTY) dipped 7.3% to $23.35. Baidu ( BIDU) bucked the trend, gaining 5.1% to $87.70 on a bullish report from Piper Jaffray upgrading the stock to an outperform rating from market perform. On Friday, analyst Safa Rashtchy pointed out that the once-feared competitive threat from Google ( GOOG) has failed to materialize over the past year. "Baidu has cracked the code on China's search, which we believe is different from the U.S. search market, allowing the company to gain a dominant and largely defensible advantage," he said in a note. Institutional investors have been leery of the lead China-based search engine ever since it raced out the gate in a blowout market debut, gaining 350% in its first day of trading last August. Rashtchy acknowledges past concerns about its valuation were legitimate but says the company's strong results have caused him to rethink his take on the stock. "We believe the significant strengthening of Baidu's position in China's search market, and the company's continued outperformance now supports the current valuation, which has moderated significantly since the high days post-company IPO. In fact, we believe the stock is worth notably more than the current levels," he wrote, adding he's lifted his revenue estimates for 2006 by 57% since he initiated coverage on the stock. Also in the China tech arena, The Standard, a Hong Kong-based business newspaper, reported two mainland Internet companies are planning overseas IPOs in 2007. Online community site Mop.com plans to raise about $200 million on the Nasdaq, the paper said, quoting an unnamed source familiar with the deal. It said the Mop concept is based on U.S. MySpace.com, offering a forum for young people to send messages and reach each other's diaries. IPO proceeds might help the company better compete with the likes of portals Sina ( SINA) and Sohu and instant message provider Tencent.