Ge Long Hui·2025-08-01 19:21Core Viewpoint - Baidu Group is expected to experience a decline in total revenue for Q2 2025, with a projected decrease of 4.2% year-on-year to 32.52 billion yuan, primarily due to pressures on its high-margin advertising business [1] Group 1: Online Marketing Business - Baidu's core revenue is projected to decline by 3.6% year-on-year to 25.72 billion yuan in Q2 2025, with online marketing service revenue expected to drop by 15.7% due to the transitional impact of AI search transformation [2] - The new Baidu search interface supports natural language input and multi-modal queries, transitioning from traditional link displays to structured answers, which may enhance user engagement and conversion efficiency in the medium term [2] - Baidu has launched an ad-free intelligent search app "TizzyAI," focusing on AI-driven content aggregation and logical reasoning, showing strong performance in search purity and content structuring [2] Group 2: Non-Online Marketing Business - Non-online marketing revenue is expected to grow by 27% year-on-year to 9.54 billion yuan in Q2 2025, with significant contributions from cloud services [3] - The "萝卜快跑" service continues to grow, with 1.4 million orders in Q1 2025, a 75% increase year-on-year, and over 11 million rides provided by May [4] - Baidu's Wenxin large model technology is evolving, enhancing multi-modal and reasoning capabilities, with the release of Wenxin 4.5 Turbo and X1 Turbo, which significantly reduce reasoning costs [4] - The new digital human technology "NOVA" integrates AI capabilities for improved interaction and naturalness, supporting dual-person interactions and replicating real broadcaster styles [4] - Traditional content products are increasingly AI-driven, with the launch of the "沧舟OS" system enhancing user experience in document and video generation [4] Group 3: Profit Forecast, Valuation, and Rating - Due to ongoing pressures in advertising demand recovery and intense industry competition, Baidu's non-GAAP net profit forecasts for 2025-2027 have been revised down to 18 billion, 19.8 billion, and 22.3 billion yuan respectively, reflecting declines of 28.4%, 27.4%, and 26.3% from previous estimates [5] - The valuation multiples for Baidu's advertising, smart cloud, and other businesses have been adjusted to 10.0x PE and 2.5x PS, with a target price set at 109.4 HKD [5] - Despite challenges, the demand for AI large models remains strong, and Baidu's cloud business is expected to maintain rapid growth, with a focus on the monetization progress of AI search [5]