BIDU(09888) 开源证券·2024-11-24 23:36Investment Rating - The report maintains a "Buy" rating for Baidu Group-SW (09888 HK) [6] Core Views - Baidu's core advertising and iQIYI businesses are under short-term pressure, with 2024-2026 non-GAAP net profit forecasts revised downward to 26 1/27 2/29 8 billion yuan (previously 26 8/28 7/31 9 billion yuan), representing year-on-year growth rates of -9 3%/4 4%/9 4% [6] - The adjusted diluted EPS for 2024-2026 is projected at 9 0/9 3/10 0 yuan, with the current stock price of 76 65 HKD corresponding to 2024-2026 P/E ratios of 7 8/7 6/7 1 times [6] - Future growth is expected to be driven by macroeconomic recovery, AI product monetization, and the expansion of autonomous driving in key regions [6] Financial Performance - Baidu's 2024Q3 revenue declined by 3% year-on-year, in line with Bloomberg consensus expectations, while non-GAAP net profit fell 19% to 5 9 billion yuan, below the Bloomberg consensus of 6 2 billion yuan due to iQIYI's underperformance [7] - Baidu Core online marketing revenue decreased by 4% year-on-year in 2024Q3, underperforming the broader internet advertising market, which grew by 5 5% according to QuestMobile data [7] - AI and intelligent cloud revenue grew by 11% year-on-year in 2024Q3, with AI cloud accounting for approximately 11% of the total [7] - Autonomous driving platform Apollo Go saw a 20% year-on-year increase in ride volume in 2024Q3 [7] - iQIYI's revenue declined by 10% year-on-year in 2024Q3, with operating profit margin down by 6 percentage points [7] Business Outlook - Short-term advertising growth is pressured by weak SME client demand, increased competition, and the company's strategic shift towards AI-generated content [8] - AI is expected to enhance advertising monetization efficiency and drive cloud demand growth [8] - Autonomous driving business model validation is anticipated, with a focus on achieving breakeven in key regions [8] - AI cloud is projected to achieve higher steady-state profit margins compared to traditional businesses [8] Financial Projections - Revenue is forecasted to decline by 1 6% in 2024, followed by growth of 5 7% and 5 2% in 2025 and 2026, respectively [10] - Non-GAAP net profit is expected to decrease by 9 3% in 2024, then grow by 4 4% and 9 4% in 2025 and 2026, respectively [10] - Gross margin is projected to be 50 4% in 2024, improving to 51 2% in 2025 before declining to 42 7% in 2026 [10] - Net margin is expected to remain stable at around 19 7%-20 2% from 2024 to 2026 [10] - ROE is forecasted to decline from 10 7% in 2024 to 9 7% in 2026 [10]