GOLDEN SUN SECURITIES·2024-07-29 01:31Investment Rating - The report maintains a "Buy" rating for Baidu Group-SW (09888.HK) [2][3] Core Views - Baidu's advertising and cloud business growth has slightly slowed, with Q1 2024 revenue at 31.5 billion yuan, a year-on-year increase of 1%. Online marketing ad revenue was approximately 17 billion yuan, up 3% year-on-year, while smart cloud and other business revenue was 6.8 billion yuan, growing 6% year-on-year [1] - Short-term outlook indicates advertising growth may be pressured due to high base effects and limited downstream spending willingness, leading to continued revenue pressure [1] - AI capabilities and ecosystem development are accelerating, with over 300 million users of the Wenxin large model and daily call volumes reaching 500 million [1] - Baidu has a first-mover advantage in Robotaxi operations, with rapid order growth in Wuhan, achieving over 600,000 total orders by April 19 [1][2] Financial Summary - Revenue projections for 2024-2026 are 140.1 billion, 152.7 billion, and 166.3 billion yuan, with year-on-year growth rates of 4%, 9%, and 9% respectively. Non-GAAP net profit is expected to be 26.7 billion, 27.9 billion, and 30.8 billion yuan, with changes of -7%, +4.5%, and +10.1% [2] - The financial metrics for 2022A, 2023A, and projections for 2024E, 2025E, and 2026E include: - Revenue (million yuan): 123,675, 134,598, 140,083, 152,718, 166,332 - Non-GAAP net profit (million yuan): 20,680, 28,747, 26,737, 27,929, 30,752 - EPS (yuan/share): 6.7, 7.4, 10.1, 9.4, 9.8 - P/E ratio: 12, 11, 8, 8, 8 [2][8]