Tianfeng Securities·2024-08-07 00:31Investment Rating - The investment rating for the company is "Buy" with a target price of 140 HKD, maintaining the rating for the next six months [3]. Core Insights - The company is expected to generate total revenue of 35.36 billion CNY in Q2 2024, representing a year-on-year increase of 3.8%. However, the Non-GAAP net profit is projected to be 7.9 billion CNY, a decrease of 1% year-on-year [1]. - The core revenue from Baidu Core is anticipated to be 27.3 billion CNY, with online marketing revenue at 20 billion CNY, reflecting a 2% year-on-year growth, primarily impacted by macroeconomic conditions [1]. - The cloud business is expected to grow by 14% year-on-year, reaching 5.1 billion CNY, driven by the widespread application of large language models [1]. - The company aims to achieve breakeven in its autonomous driving business in Wuhan by the end of 2024, with plans to replicate this success in other cities [1]. Summary by Sections Financial Performance - Total revenue for Q2 2024 is projected at 35.36 billion CNY, with a year-on-year growth of 3.8% [1]. - Non-GAAP net profit is expected to be 7.9 billion CNY, down 1% year-on-year [1]. - Baidu Core revenue is estimated at 27.3 billion CNY, with online marketing revenue at 20 billion CNY, showing a 2% increase [1]. Cloud and AI Development - The cloud revenue is forecasted to reach 5.1 billion CNY, marking a 14% year-on-year growth [1]. - The launch of the Wenxin large model 4.0 Turbo is anticipated to enhance cloud service capabilities [1]. - The Wenxin ecosystem has attracted 14.65 million developers and serves 370,000 enterprises, indicating strong engagement [1]. Autonomous Driving Initiatives - The Apollo Day 2024 introduced the Apollo ADFM, the first large model supporting L4 autonomous driving, with a significant cost reduction of 60% for the new vehicle model [1]. - The company has completed over 6 million rides with its autonomous vehicles and aims for breakeven in Wuhan by the end of 2024 [1]. - The autonomous driving service provided approximately 826,000 rides in Q1 2024, a 25% increase year-on-year [1].