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].

证券研究报告·海外公司点评·软件服务(HS) 百度集团-SW（09888.HK） 2024Q1 业绩点评：利润超预期，AI 对云收 2024年 05月 19日 入贡献继续提升 证券分析师 张良卫 买入（维持） 执业证书：S0600516070001 021-60199793 [ 盈Ta 利bl 预e_ 测EP 与S] 估 值 2022A 2023A 2024E 2025E 2026E zhanglw@dwzq.com.cn 研究助理 郭若娜 营业总收入（百万元） 123675 134598 139252 148157 155738 执业证书：S0600122080017 同比(%) (0.66) 8.83 3.46 6.39 5.12 guorn@dwzq.com.cn Non-Gaap归母净利润（百万元） 20680 28747 30874 32694 35113 同比(%) 9.82 39.01 7.40 5.89 7.40 股价走势 EPS-最新摊薄（元/股，Non-Gaap） 7.37 10.25 11.01 11.65 12.52 百度集团-SW 恒生指数 P/E（现价&最新摊薄，Non-Gaap） ...

Revenue Performance - Total revenue for Q1 2024 was RMB 31,513 million (USD 4,365 million), a 1% year-over-year increase but a 10% quarter-over-quarter decrease[3] - Baidu Core's revenue for Q1 2024 was RMB 23,803 million (USD 3,297 million), a 4% year-over-year increase but a 13% quarter-over-quarter decrease[4] - Total revenue for Q1 2024 was RMB 31.5 billion (USD 4.37 billion), a 1% year-over-year increase[7] - Baidu Core revenue was RMB 23.8 billion (USD 3.30 billion), a 4% year-over-year increase, driven by a 6% increase in non-online marketing revenue[7] - Baidu's total revenue for Q1 2024 was RMB 31.513 billion (USD 4.365 billion), compared to RMB 31.144 billion in Q1 2023 and RMB 34.951 billion in Q4 2023[14] - Baidu's total revenue for Q1 2024 reached RMB 31.513 billion, a 1% increase year-over-year[18] - Baidu Core revenue for Q1 2024 was RMB 23.803 billion, up 4% year-over-year[18] - iQIYI's revenue for Q1 2024 decreased by 5% year-over-year to RMB 7.927 billion[18] Profitability Metrics - Operating profit for Q1 2024 was RMB 5,484 million (USD 760 million), up 10% year-over-year and 2% quarter-over-quarter[3] - Non-GAAP operating profit margin for Baidu Core reached 23.5% in Q1 2024, showing both year-over-year and quarter-over-quarter growth[2] - Adjusted EBITDA for Q1 2024 was RMB 8,244 million (USD 1,142 million), with a consistent margin of 26% year-over-year[3] - Baidu's non-GAAP net income attributable to Baidu Core for Q1 2024 was RMB 6,628 million (USD 918 million), a 26% year-over-year increase[4] - Baidu Core's operating profit margin was 19%, and non-GAAP operating profit margin was 23%[7] - Net income attributable to Baidu was RMB 5.4 billion (USD 755 million), with a Baidu Core net profit margin of 22%[8] - Adjusted EBITDA for Baidu Core was RMB 7.1 billion (USD 986 million), with an adjusted EBITDA margin of 30%[8] - Non-GAAP operating profit for Q1 2024 was RMB 5.484 billion (USD 760 million), up from RMB 4.980 billion in Q1 2023 and RMB 5.392 billion in Q4 2023[14] - Net income attributable to Baidu for Q1 2024 was RMB 5.448 billion (USD 755 million), compared to RMB 5.825 billion in Q1 2023 and RMB 2.599 billion in Q4 2023[14] - Baidu's operating profit for Q1 2024 was RMB 5.484 billion, with an operating profit margin of 17%[18] - Baidu's net income attributable to the company for Q1 2024 was RMB 5.448 billion, a 110% increase year-over-year[18] - Baidu Core's non-GAAP operating profit for Q1 2024 was RMB 5,586 million, a 4% increase year-over-year[19] - Baidu Core's non-GAAP net profit attributable to Baidu for Q1 2024 was RMB 6,628 million, a 26% increase year-over-year[19] - Baidu Core's adjusted EBITDA for Q1 2024 was RMB 7,118 million, a 2% increase year-over-year[19] - Baidu Core's non-GAAP operating profit margin for Q1 2024 was 23%, consistent with the previous quarter[19] - Baidu Core's non-GAAP net profit margin for Q1 2024 was 28%, a 1% increase year-over-year[19] - Baidu Core's adjusted EBITDA margin for Q1 2024 was 30%, consistent with the previous quarter[19] - Baidu's operating profit for Q1 2024 was RMB 4,538 million for Baidu Core and RMB 945 million for iQIYI, totaling RMB 5,484 million[21] - Non-GAAP operating profit for Q1 2024 was RMB 5,586 million for Baidu Core and RMB 1,086 million for iQIYI, totaling RMB 6,673 million[21] - Adjusted EBITDA for Q1 2024 was RMB 7,118 million for Baidu Core and RMB 1,125 million for iQIYI, totaling RMB 8,244 million[21] - Net income attributable to Baidu for Q1 2024 was RMB 5,150 million for Baidu Core and RMB 655 million for iQIYI, totaling RMB 5,448 million[21] - Non-GAAP net income attributable to Baidu for Q1 2024 was RMB 6,628 million for Baidu Core and RMB 844 million for iQIYI, totaling RMB 7,011 million[21] - The increase in non-GAAP operating profit was primarily due to lower share-based compensation expenses and intangible asset amortization and impairment[21] - The increase in non-GAAP net income was driven by adjustments for share-based compensation, intangible asset amortization, and impairment, as well as gains from disposals and long-term investments[21] - The non-GAAP adjustments also included the impact of taxes on non-GAAP adjustments, which amounted to RMB 280 million[21] Cash Flow and Financial Position - Baidu repurchased USD 229 million worth of shares in Q1 2024, with cumulative repurchases under the 2023 plan reaching USD 898 million[4] - Cash, cash equivalents, restricted cash, and short-term investments totaled RMB 191.8 billion (USD 26.56 billion) as of March 31, 2024[8] - Baidu's total assets as of March 31, 2024 were RMB 414.697 billion (USD 57.435 billion), up from RMB 406.759 billion as of December 31, 2023[16] - Cash and cash equivalents as of March 31, 2024 were RMB 30.418 billion (USD 4.213 billion), compared to RMB 25.231 billion as of December 31, 2023[16] - Short-term investments as of March 31, 2024 were RMB 149.781 billion (USD 20.744 billion), down from RMB 168.670 billion as of December 31, 2023[16] - Long-term investments as of March 31, 2024 were RMB 46.947 billion (USD 6.502 billion), down from RMB 47.957 billion as of December 31, 2023[16] - Goodwill as of March 31, 2024 remained unchanged at RMB 22.586 billion (USD 3.128 billion) compared to December 31, 2023[16] - Baidu's total liabilities increased to RMB 146.934 billion as of March 31, 2024, up from RMB 144.151 billion at the end of 2023[17] - Baidu's total equity increased to RMB 257.857 billion as of March 31, 2024, compared to RMB 253.143 billion at the end of 2023[17] - Baidu Core's operating cash flow for Q1 2024 was RMB 5,284 million, a 5% increase year-over-year[20] - Baidu Core's free cash flow for Q1 2024 was RMB 3,268 million, a 5% increase year-over-year[20] - Baidu Core's cash, cash equivalents, and restricted cash at the end of Q1 2024 were RMB 36,964 million, a 14% increase year-over-year[20] - Baidu Core's capital expenditures for Q1 2024 were RMB 2,016 million, a 45% decrease year-over-year[20] User and Developer Metrics - Baidu's autonomous driving service, Luobo Kuaipao, provided approximately 826,000 rides in Q1 2024, a 25% year-over-year increase[6] - Baidu's PaddlePaddle platform has attracted 13 million developers as of mid-April 2024[5] - Baidu App's monthly active users reached 676 million in March 2024, a 3% year-over-year increase[7] - Hosted page revenue accounted for 50% of Baidu Core's online marketing revenue in Q1 2024[7] Expenses and Costs - R&D expenses decreased by 1% to RMB 5.4 billion (USD 742 million), partially offset by increased server depreciation and rack fees for generative AI development[7] - Baidu's R&D expenses for Q1 2024 were RMB 5.363 billion, a 1% decrease year-over-year[18] - Baidu's sales and marketing expenses for Q1 2024 were RMB 5.375 billion, a 4% decrease year-over-year[18] - Baidu's cost of revenue for Q1 2024 was RMB 15.291 billion, a 1% increase year-over-year[18] - Total equity-based compensation expenses for Q1 2024 were RMB 1.143 billion (USD 159 million), down from RMB 1.638 billion in Q4 2023 and RMB 1.389 billion in Q1 2023[15] Earnings Per Share - Diluted earnings per ADS for Q1 2024 were RMB 14.91 (USD 2.07), up from RMB 6.77 in Q4 2023 and RMB 15.92 in Q1 2023[15] - Diluted earnings per ADS for Q1 2024 were RMB 14.91[22] - Non-GAAP diluted earnings per ADS for Q1 2024 were RMB 19.91[22] Technology and Innovation - Baidu launched multiple lightweight large language models in Q1 2024, making the Ernie series more cost-effective[5]

港股公司报告 | 公司点评 百度集团-SW（09888） 证券研究报告 2024年04月 30日 投资评级 24Q1 前瞻：Create 2024AI 大会，轻量模型有望带动云业务发展 行业 资讯科技业/软件服务 6个月评级 买入（维持评级） 百度24Q1业绩前瞻：我们预计百度24Q1总收入320亿元，同比+2.7%； 当前价格 103.3港元 Non-gaap净利润55 亿元，同比-4%。 目标价格 139港元 百度Core：我们预计24Q1百度 Core收入为235亿元，同比+2%；其 基本数据 中在线营销收入 167 亿元，同比+1%，我们预计主要受线上广告投放不 港股总股本(百万股) 2,846.40 及预期影响；非在线营销收入68亿元，同比+6%；爱奇艺收入89亿元， 港股总市值(百万港元) 294,033.37 同比+6%。我们认为，24 年因宏观消费恢复不及预期，导致公司广告业 务承压，但轻量模型有望带动云业务发展，公司通过发展AI云基础设施、 每股净资产(港元) 94.51 AI 企业大模型平台等细分业务有望推动云业务增长。 资产负债率(%) 35.44 一 年内最高/最低(港元) 155.8 ...

证券研究报告·海外公司点评·软件服务(HS) 百度集团-SW（09888.HK） 24Q1 业绩前瞻：广告业务承压，关注 AI 带 2024年 04月 30日 来云业务增量 证券分析师 张良卫 买入（维持） 执业证书：S0600516070001 021-60199793 [ 盈Ta 利bl 预e_ 测EP 与S] 估 值 2022A 2023A 2024E 2025E 2026E zhanglw@dwzq.com.cn 研究助理 郭若娜 营业总收入（百万元） 123,675 134,598 139,591 150,045 158,539 执业证书：S0600122080017 同比(%) (0.66) 8.83 3.71 7.49 5.66 guorn@dwzq.com.cn Non-Gaap归母净利润（百万元） 20,680 28,747 28,771 31,084 34,500 同比(%) 9.82 39.01 0.08 8.04 10.99 股价走势 EPS-最新摊薄（元/股，Non-Gaap） 7.37 10.25 10.26 11.08 12.30 百度集团-SW 恒生指数 P/E（现价&最新摊薄 ...

2024年4月28日 公司研究 24Q1 广告恢复预计较弱，Create 大会展示 AI 迭代进展 ——百度集团-SW（9888.HK）2024 年一季度业绩前瞻 要点 买入（维持） 当前价/目标价：100.9/165.0港元 事件：2024年一季度业绩前瞻：我们预计百度集团1Q24总收入同比增长0.2% 至312亿元，百度核心总收入同比增长2.2%至235.1亿元。我们预计百度集 团1Q24核心非GAAP下经营利润49.7亿，同比-7.4%，对应经营利润率 作者 21.1%；百度集团1Q24非GAAP下净利润57.1亿，对应净利率18.3%。 分析师：付天姿 点评：1）在线营销服务：部分行业广告主需求恢复较弱，广告增速预计缓慢。 执业证书编号：S0930517040002 我们预计1Q24百度在线营销服务收入为168.2亿元，同比增长1.3%。增速 021-52523692 放缓主要受制于房地产、线下招商加盟等部分行业恢复速度较慢，广告需求预 futz@ebscn.com 计较为疲软。受益于线下旅游的复苏和电商平台的竞争趋烈，旅游、电商等行 业的广告需求预计表现较好。我们认为，百度持续使用AI对产品进行改造 ...