Investment Rating - The report maintains a "Buy" rating for Baidu Group, expecting the stock price to outperform the industry index by over 15% in the next six months [4][12]. Core Insights - Baidu's core business remains robust, with a focus on advancements in AI and intelligent driving. The company reported a revenue of 315.13 billion CNY in Q1 2024, with a year-on-year growth of 1% and a non-GAAP net profit of 70.11 billion CNY, reflecting a 22% increase [2][3]. - The intelligent cloud business is accelerating, with a 12% year-on-year revenue growth in Q1 2024, driven by Gen AI and foundational models [2][3]. - The autonomous driving service, "Luobo Kuaipao," saw a 25% increase in order volume, with expectations of achieving breakeven in the Wuhan region by the end of 2024 [3]. Financial Summary - Revenue projections for 2024-2026 are 146.20 billion CNY, 156.86 billion CNY, and 166.77 billion CNY, respectively, with net profits expected to be 23.09 billion CNY, 26.05 billion CNY, and 29.01 billion CNY [6][7]. - The report indicates a steady increase in EPS, projected at 8.26 CNY, 9.31 CNY, and 10.37 CNY for the years 2024, 2025, and 2026, respectively [6][7]. - The P/E ratio is expected to decrease from 40.1 in 2023 to 10.4 by 2026, indicating improved valuation [2][6]. Business Developments - Baidu's core intelligent cloud business is benefiting from AI-driven innovations, with significant contributions from Gen AI and foundational models, which accounted for 6.9% of AI cloud revenue in Q1 2024 [2][3]. - The launch of lightweight large models has enhanced the development environment for developers, increasing the number of developers in the Baidu PaddlePaddle community to 13 million [2]. - The autonomous driving segment is expected to replicate success in other regions following the anticipated breakeven in Wuhan, supported by advanced technology and cost reductions in vehicle production [3].

"Mayday" 可直译为 5 月天，它也是国际通用的无线电求助信号。当飞机有坠落危险时，飞行员会对着对讲机大喊 "Mayday"！ 这个 5 月，可能是 ChatGPT 发布至今大模型行业最热闹的时候：OpenAI、Google、微软、字节跳动、阿里巴巴等中美两国公司至少举办了 13 场与 大模型相关的发布会，介绍了 10 多款新模型，拿出了一堆新产品。 热闹中的风险与失望是：不少从业者认为技术没有重大进步。 OpenAI 本月新发布的 GPT-4o 处理语言的能力停留在 GPT-4 水平，被期待已久的 GPT-5 仍未登场。 多模态成为顶尖 AI 公司的技术焦点：从 OpenAI、Google 到微软，发布能同时处理语音、图像，甚至理解现实世界的模型。但这些能力支持的产品 和应用都还在 Demo 阶段，没正式发布就引出了侵权、隐私隐患等各种麻烦。 唱衰大模型创业机会的金沙江创投主管合伙人朱啸虎有一个观点：如果语言能力的进化速度变慢，"这波热潮就到头了"。 "没什么令人兴奋的。" 一位在中国大公司带队研发大模型的人士说，一系列发布会让他更相信，开发能力更强的小模型才是未来。 一位 AI 创业者说 GPT-4 ...

Investment Rating - The report maintains a "Buy" rating for Baidu's stock, with a target price of $166 per ADS in the US market and HKD 162 per share in the Hong Kong market [4][10]. Core Insights - Baidu's Q1 2024 revenue reached RMB 315.13 billion, showing a year-over-year increase of 1% but a quarter-over-quarter decrease of 10%. The adjusted operating profit was RMB 66.73 billion, up 4% year-over-year and down 6% quarter-over-quarter [2][10]. - The core business remains stable, with Baidu Core revenue at RMB 238.03 billion, a 4% year-over-year increase, and core advertising revenue at RMB 170 billion, up 3% year-over-year. The intelligent cloud revenue was RMB 47 billion, reflecting a 12% year-over-year growth [2][10]. - The AI restructuring of Baidu's search products is ongoing, which may temporarily impact advertising revenue but is expected to enhance user experience and increase ad efficiency in the long run [2][10]. Financial Forecasts - Revenue projections for 2024 and 2025 are RMB 1,406 billion and RMB 1,522 billion, respectively, representing year-over-year growth rates of 4% and 8% [2][10]. - Adjusted net profit forecasts for 2024 and 2025 are RMB 304 billion and RMB 332 billion, with growth rates of 6% and 9% [2][10]. - The report anticipates that the adjusted net profit for Baidu's core business (excluding iQIYI) will be RMB 298 billion and RMB 325 billion for 2024 and 2025, respectively, both showing a 9% growth rate [10][11]. Valuation Methodology - The report employs a sum-of-the-parts (SOTP) valuation method, estimating the core marketing business's NOPAT profit for 2024 at RMB 206 billion, with a target P/E ratio of 13x, leading to a valuation of $105 per ADS [10][11]. - The intelligent cloud is valued at $15 per ADS based on a price-to-sales ratio of 1.8x, while the autonomous driving technology is valued at $30 per ADS [10][11]. - The total estimated value for Baidu is $582 billion, translating to a reasonable value of $166 per ADS [10][11].

Investment Rating - The report maintains a "Buy" rating for Baidu Group-SW (9888.HK) [1][17] Core Insights - Baidu's core business shows steady growth, with AI becoming a significant driver of business expansion. In Q1 2024, the company reported revenue of 31.5 billion RMB, a year-on-year increase of 1%, and a Non-GAAP net profit of 7 billion RMB, up 22% year-on-year. The profit growth outpaced revenue growth, primarily due to high-quality growth in AI business and improved operational efficiency [2][18] - The online advertising revenue grew steadily, reaching 17 billion RMB in Q1 2024, a 3% increase year-on-year. Baidu is transitioning its advertising user experience from traditional mobile products to generative AI experiences, which is expected to enhance ad conversion rates and attract more advertisers. The Baidu APP's monthly active users (MAU) reached 676 million in March 2024, a 3% increase year-on-year [2][18] - Demand for intelligent cloud services is increasing, and advancements in autonomous driving capabilities are notable. The non-marketing revenue for Q1 2024 was 6.8 billion RMB, a 6% year-on-year increase, driven by intelligent cloud services. As of mid-April 2024, the Baidu PaddlePaddle platform has gathered 13 million developers. In autonomous driving, Baidu's ride-hailing service "Luobo Kuaipao" provided over 6 million rides by April 19, 2024, with a 25% year-on-year increase in Q1 2024 [2][18] - AI tools have been updated to enhance development efficiency. The Wenxin large model has over 200 million users, with a daily API call volume of 200 million. In Q1 2024, several lightweight large language models were launched, along with three major development tools: AgentBuilder, AppBuilder, and ModelBuilder, to assist developers and enterprises in creating intelligent applications and custom models [2][18] Financial Forecast and Rating - The company is expected to achieve adjusted EPS of 10.56 RMB, 11.10 RMB, and 11.69 RMB for the years 2024-2026, with Non-GAAP net profit projected to continue growing over the next three years. As a leading provider of comprehensive internet services, Baidu is actively building a new AI ecosystem, enhancing its AI capabilities to empower advertising, intelligent cloud, and autonomous driving business development. The order volume is expected to continue growing in 2024, maintaining the "Buy" rating [3][19][20]

Investment Rating - The investment rating for Baidu Group is maintained as "Buy" [1][2] Core Insights - In Q1 2024, Baidu's total revenue reached 31.5 billion yuan, showing a year-over-year growth of 1.2% but a quarter-over-quarter decline of 9.8%. The net profit (Non-GAAP) was 7 billion yuan, reflecting a year-over-year increase of 22.4% and a quarter-over-quarter decrease of 9.6% [2] - Baidu's core revenue was 23.8 billion yuan, with a year-over-year growth of 3.5% and a quarter-over-quarter decline of 13.4%. The core net profit (Non-GAAP) was 6.6 billion yuan, up 25.8% year-over-year and down 11.6% quarter-over-quarter [2] - The company has expanded its Wenxin series of models and launched several lightweight models, along with a Model as a Service (MaaS) platform aimed at enterprise clients [2] - Baidu's autonomous driving service platform, "Luobo Kuaipao," saw a 25% year-over-year increase in orders, totaling 826,000 orders in Q1 2024 [2] - The active user base of the Baidu app reached 676 million, a 3% year-over-year increase, with managed page revenue accounting for 50% of the online marketing revenue [2] Financial Summary - For 2024, 2025, and 2026, the projected net profits (Non-GAAP) are 30.0 billion yuan, 32.2 billion yuan, and 34.6 billion yuan, respectively, with year-over-year growth rates of 4.4%, 7.2%, and 7.7% [2][3] - The corresponding P/E ratios for these years are projected to be 12.1, 11.2, and 10.5 [2][3] - Key financial metrics for 2023 and projections for 2024E, 2025E, and 2026E include: - Revenue: 134.6 billion yuan (2023), 139.5 billion yuan (2024E), 149.2 billion yuan (2025E), 159.3 billion yuan (2026E) [3] - Net profit (Non-GAAP): 28.7 billion yuan (2023), 30.0 billion yuan (2024E), 32.2 billion yuan (2025E), 34.6 billion yuan (2026E) [3] - ROE: 7.7% (2023), 7.9% (2024E), 7.9% (2025E), 7.8% (2026E) [3]

Investment Rating - The report maintains a "Buy" rating for Baidu Group-SW (9888.HK) [1] Core Insights - Baidu Group reported a revenue of 31.5 billion RMB in Q1 2024, representing a year-on-year growth of 1%. The Non-GAAP net profit reached 7 billion RMB, showing a year-on-year increase of 22% [2] - The growth in profit outpaced revenue growth, primarily driven by high-quality growth in AI business and improved operational efficiency [2] - Core online advertising revenue was 17 billion RMB in Q1 2024, up 3% year-on-year, with an increase in user engagement on Baidu APP, which reached 676 million monthly active users, a 3% increase year-on-year [2] - Non-marketing revenue, driven by intelligent cloud services, reached 6.8 billion RMB, a 6% year-on-year growth, with significant advancements in smart driving capabilities [2] - The AI tools have been updated to enhance development efficiency, with the Wenxin large model user base exceeding 200 million and daily API calls reaching 200 million [2] Financial Forecasts - The adjusted EPS for Baidu Group is projected to be 10.56 RMB, 11.10 RMB, and 11.69 RMB for the years 2024, 2025, and 2026 respectively [3] - Non-GAAP net profit is expected to continue growing over the next three years, with the company actively building an AI ecosystem to empower its advertising, intelligent cloud, and smart driving businesses [3] - Revenue forecasts for 2024 to 2026 are 143.6 billion RMB, 153.2 billion RMB, and 162.3 billion RMB respectively, with growth rates of 6.69%, 6.71%, and 5.91% [4]

Investment Rating - The investment rating for Baidu Group is "Buy" (maintained) [2] Core Insights - In Q1 2024, Baidu's total revenue reached 31.5 billion yuan, representing a year-over-year growth of 1.2% and a quarter-over-quarter decline of 9.8%. The net profit (Non-GAAP) was 7 billion yuan, showing a year-over-year increase of 22.4% and a quarter-over-quarter decrease of 9.6% [3] - Baidu's core revenue was 23.8 billion yuan, with a year-over-year growth of 3.5% and a quarter-over-quarter decline of 13.4%. The core net profit (Non-GAAP) was 6.6 billion yuan, reflecting a year-over-year increase of 25.8% and a quarter-over-quarter decrease of 11.6% [3] - The company has expanded its Wenxin series models and launched several lightweight models, along with a Model as a Service (MaaS) platform aimed at enterprise clients [3] - Baidu's autonomous driving service platform, "Luobo Kuaipao," saw a 25% year-over-year increase in orders, totaling 826,000 orders in Q1 2024 [3] - The active user base of the Baidu app reached 676 million, a 3% year-over-year increase, with managed page revenue accounting for 50% of the online marketing revenue [3] - The forecast for net profit (Non-GAAP) for 2024, 2025, and 2026 is 30.0 billion, 32.2 billion, and 34.6 billion yuan respectively, with year-over-year growth rates of 4.4%, 7.2%, and 7.7% [3] Financial Summary - For 2024, the expected revenue is 139.5 billion yuan, with a year-over-year growth of 3.6%. The net profit (Non-GAAP) is projected to be 30.0 billion yuan, with a year-over-year growth of 4.4% [4] - The operating profit margin (Non-GAAP) for Q1 2024 was 21.2% [3] - The company’s total market capitalization is approximately 282.7 billion yuan, with a circulating market capitalization of about 229.8 billion yuan [2]

Investment Rating - The report maintains a "Buy" rating for the company with a target price of 133 HKD, reflecting a 24% upside potential from the current stock price of 107 HKD [2][5][11]. Core Insights - The company's total revenue for Q1 2024 was 31.5 billion RMB, showing a year-over-year growth of 1% but a quarter-over-quarter decline of 10%, aligning with market expectations. Non-GAAP net profit reached 7 billion RMB, exceeding market forecasts with a year-over-year increase of 22% [1][6][11]. - The advertising business is experiencing slow growth, primarily due to a weak macroeconomic environment and slow recovery among small and medium-sized clients. The core online marketing revenue was 17 billion RMB, up 3% year-over-year [1][7]. - AI-driven cloud business is showing promising growth, with a 12% year-over-year increase in revenue, largely attributed to Gen AI and foundational models. Revenue from Gen AI accounted for approximately 330 million RMB in Q1 2024 [2][8]. Summary by Sections Financial Performance - Total revenue for Q1 2024 was 31.5 billion RMB, with a Non-GAAP operating profit of 6.7 billion RMB, reflecting a 4% year-over-year increase. Non-GAAP net profit was 7 billion RMB, marking a 22% increase year-over-year [1][6][10]. - The core business revenue was 23.8 billion RMB, with online marketing revenue at 17 billion RMB and non-online marketing revenue at 6.8 billion RMB [1][6][10]. Advertising Business - The core online marketing revenue grew by 3% year-over-year, but the growth rate is expected to decline in the second and third quarters of 2024 due to macroeconomic uncertainties [1][7][11]. - The mobile ecosystem remains stable, with 676 million monthly active users on the Baidu app, a 3% year-over-year increase [1][7]. AI and Cloud Business - The AI cloud revenue increased by 12% year-over-year, driven by Gen AI and foundational models, with Gen AI contributing 6.9% to the AI cloud revenue [2][8]. - The autonomous driving service provided 826,000 rides in Q1 2024, a 25% year-over-year increase, with plans to expand the fleet to 1,000 vehicles by the end of 2024 [2][8]. Valuation and Market Position - The report adopts a cautious valuation approach, not assigning a value to the cloud and autonomous driving businesses due to their uncertain profitability. The target price is based on a 15x PE ratio of the projected 2024 profits [2][11].

Investment Rating - The investment rating for Baidu Group-SW is maintained at "Buy" [2][6]. Core Insights - The report indicates that Baidu's core advertising revenue is under pressure due to macroeconomic factors, with a slight downward adjustment in non-GAAP net profit forecasts for 2024-2026 to 27.4 billion, 31.0 billion, and 34.0 billion CNY respectively, reflecting year-on-year growth rates of -4.6%, 12.8%, and 9.9% [6]. - The first quarter of 2024 saw Baidu's revenue grow by 1.2% year-on-year, aligning with Bloomberg consensus expectations, while non-GAAP net profit increased by 22%, surpassing expectations due to improved operational efficiency in Baidu's core and iQIYI segments [7]. - The report highlights that while short-term advertising growth is constrained, the long-term potential of AI-driven advertising and cloud services is expected to enhance revenue contributions significantly [8]. Summary by Sections Financial Performance - In Q1 2024, Baidu's core online marketing revenue grew by 3%, which is below the overall internet advertising market growth of 4.6% in China [7]. - The AI and smart cloud segment saw an increase in demand, with AI contributions rising to approximately 6.9% of total demand, up by 2.1 percentage points quarter-on-quarter [7]. - iQIYI's revenue declined by 5% year-on-year, with a non-GAAP net profit margin of 10.6% [7]. Market Conditions - The advertising business is facing growth challenges due to macroeconomic conditions, particularly affecting offline economies and SME client spending [8]. - Despite these challenges, AI is expected to improve advertising conversion rates, with projected incremental revenue from AI-driven advertising and cloud services reaching several billion CNY in 2024 [8]. Valuation Metrics - The current stock price is 110.90 HKD, with projected P/E ratios for 2024-2026 at 10.8, 9.7, and 9.0 times respectively [6][9]. - Non-GAAP net profit margins are forecasted to be 19.5%, 20.6%, and 21.3% for 2024, 2025, and 2026 respectively, indicating a stable profit outlook [9].

Investment Rating - The investment rating for Baidu Group-SW (09888.HK) is "Buy" [1][3]. Core Insights - Baidu Group's total revenue grew by 1% year-on-year to 31.5 billion yuan in Q1 2024, with adjusted net profit increasing by 22% to 7 billion yuan [1][4]. - The core revenue from Baidu increased by 4% to 23.8 billion yuan, while iQIYI's revenue decreased by 5% to 7.9 billion yuan [1][4]. - The online marketing revenue for Baidu's core business was 17 billion yuan, reflecting a 2% year-on-year growth, driven by the integration of generative AI in search results [1][6]. - The intelligent cloud business maintained double-digit growth, with AI contributing 6.9% to the total cloud revenue [1][9]. - The report emphasizes the potential of AI technology to drive growth in search advertising and cloud services, maintaining profit forecasts for 2024-2026 [1][12]. Financial Performance Summary - Total revenue for 2024 is projected to reach 142.1 billion yuan, with a year-on-year growth of 5.5% [2]. - Adjusted net profit for 2024 is estimated at 28.6 billion yuan, with a slight decrease of 0.6% compared to 2023 [2]. - The adjusted EPS for 2024 is forecasted to be 10.19 yuan, with a PE ratio of 9.4 [2][14]. - The EBIT margin is expected to be 14.7% in 2024, while the ROE is projected at 6.8% [2][14]. Business Segment Analysis - Baidu's core advertising revenue grew by 2%, with 11% of search results generated by AI, although monetization remains a challenge [1][6]. - The intelligent cloud revenue reached 4.7 billion yuan, marking a 12% increase year-on-year, primarily driven by generative AI and foundational models [1][9]. - Non-online marketing revenue increased by 6% to 6.8 billion yuan, indicating a diversified revenue stream beyond traditional advertising [1][4]. User Engagement and AI Integration - Baidu's app reached 676 million monthly active users in March 2024, a 3% increase year-on-year [1][6]. - The introduction of features like Agent Builder allows advertisers to create customized ERNIE agents, enhancing user interaction and engagement [1][10]. - The report highlights a significant increase in paid users for Baidu Wenku, reflecting the growing adoption of AI-driven services [1][11].