Zhi Tong Cai Jing·2025-11-20 01:48Core Viewpoint - The report from Everbright Securities maintains a "Buy" rating for Baidu Group-SW (09888), highlighting the company's AI ecosystem value and strong performance in Q3 2025, with core business revenue reaching 24.66 billion yuan, exceeding expectations by 1.5% [1] Performance Summary - In Q3 2025, Baidu's core business revenue was 24.66 billion yuan, with an operating profit of 1.22 billion yuan and an operating margin of 4.9%. The company increased its investment in AI, leading to a decline in traditional search revenue share. Capital expenditure for the quarter was 3.38 billion yuan, a year-on-year increase of 106.4% [1] AI Revenue Insights - AI revenue surpassed 10 billion yuan for the first time, driven by AI cloud, AI applications, and AI native advertising. Q3 2025 AI revenue was 10 billion yuan, with a year-on-year growth rate exceeding 50%. - AI Cloud: Revenue of 6.2 billion yuan, up 21% year-on-year, with IaaS+PaaS revenue at 4.2 billion yuan, growing 33%, and subscription revenue for AI infrastructure up 128% [2] - AI Applications: Revenue of 2.6 billion yuan, including products like Baidu Wenku, Baidu Wangpan, and various AI platforms [2] - AI Native Advertising: Revenue of 2.8 billion yuan, a significant year-on-year increase of 262%, now accounting for 18% of core advertising revenue, up from 4% in Q3 2024 [2] Expansion of "Luobo Kuai Pao" - The number of orders for "Luobo Kuai Pao" (robotaxi service) accelerated, providing 3.1 million autonomous driving services in Q3 2025, a year-on-year increase of 212%. The service has expanded to 22 cities globally, with partnerships established with Uber in Asia and the Middle East, and Lyft in Germany and the UK [3] Traditional Business Overview - Excluding AI native advertising revenue, traditional advertising revenue was 12.58 billion yuan in Q3 2025. AI native advertising forms like Agent and digital humans enhance the monetization of previously non-advertising intent webpages, serving as a second growth curve rather than a direct replacement for traditional search [4] Profit Forecast, Valuation, and Rating - The firm remains optimistic about Baidu's AI ecosystem value, with AI native advertising enhancing traditional search monetization capabilities. The company is expected to maintain healthy net cash flow to support long-term AI strategic investments. The business model of "Luobo Kuai Pao" has been validated with accelerating order growth and successful international expansion. Revenue forecasts for 2025-2027 are 130.8 billion, 139.9 billion, and 148.3 billion yuan, with Non-GAAP net profit estimates of 18.2 billion, 20.5 billion, and 23 billion yuan for the same period. The current price corresponds to PE ratios of 15x, 14x, and 12x, maintaining a "Buy" rating [5]