BIDU(09888) 东方证券·2024-09-03 09:42Investment Rating - The report maintains a "Buy" rating for the company with a target price of 132.37 HKD, based on a projected adjusted PE of 12x for 2024, corresponding to a market capitalization of 338.7 billion CNY [2][8]. Core Insights - The company reported Q2 2024 revenue of 33.93 billion CNY, slightly below Bloomberg consensus of 34.11 billion CNY, with an adjusted net profit of 7.40 billion CNY, exceeding the consensus estimate of 6.68 billion CNY [1]. - Core advertising remains under pressure, while cloud business shows strong growth. The core revenue was 26.69 billion CNY, up 1.1% year-over-year, with advertising revenue at 19.2 billion CNY, down 2.0% year-over-year, which was better than the expected decline of 2.9% [1]. - Cost control is excellent, with a core gross margin of 59.2% and an operating profit margin (OPM) of 21.0%, which is above market expectations [1]. - AI large models are restructuring the company's business, with significant increases in user engagement and application. The daily invocation of the Wenxin large model has exceeded 600 million times, and nearly 18% of search results are generated by AI [1]. - The autonomous driving service "Luobo Kuaipao" saw a 26% year-over-year increase in order volume, reaching approximately 899,000 orders in Q2 2024 [1]. Financial Summary - The company expects adjusted net profits of 27.4 billion CNY, 29.2 billion CNY, and 30.3 billion CNY for 2024, 2025, and 2026 respectively, with revenue projections of 135 billion CNY, 142.9 billion CNY, and 151.6 billion CNY for the same years [2][8]. - The report outlines a forecast for core revenue growth, with online marketing expected to decline slightly in the near term, while cloud services are projected to grow significantly [7].