BIDU(09888) 东吴证券·2024-11-29 03:27Investment Rating - Buy (Maintained) [1] Core Views - 2024Q3 revenue met market expectations, while adjusted net profit fell short of expectations [2] - Advertising business remains under pressure, but generative AI continues to transform the ecosystem [3] - Non-advertising business: Generative AI drives growth in cloud computing [4] - Increased customer acquisition and cloud-related costs were partially offset by expense control [5] Financial Performance - 2024Q3 revenue was RMB 33.6 billion, down 3% YoY, in line with Bloomberg consensus [2] - Non-GAAP operating profit was RMB 7 billion, down 8% YoY, below Bloomberg consensus [2] - Non-GAAP net profit was RMB 5.9 billion, down 19% YoY, below Bloomberg consensus [2] - Share repurchase amount since 2024Q3 was USD 161 million, with cumulative repurchase under the 2023 plan reaching approximately USD 1.4 billion [2] Advertising Business - 2024Q3 Baidu Core revenue was RMB 26.5 billion, flat YoY, in line with Bloomberg consensus [3] - Online marketing revenue was RMB 18.8 billion, down 4% YoY [3] - Over 20% of search results now include generative AI content, up from 18% in Q2 [3] - Advertising business is expected to remain weak in Q4, but generative AI is expected to have a positive impact in the medium to long term [3] Non-Advertising Business - Cloud revenue grew 11% YoY in 2024Q3, driven by generative AI [4] - Daily API calls for the Wenxin series models reached 1.5 billion in November 2024, up from 600 million in August [4] - AI accounted for 11% of cloud revenue in 2024Q3, up from 4.8% in 23Q4 [4] - Autonomous driving service "Luobo Kuaipao" provided 988,000 orders in Q3, up 20% YoY [4] - Fully autonomous orders accounted for over 70% of total orders nationwide, increasing to 80% in October 2024 [4] Cost and Expense Management - Baidu Core non-GAAP gross margin was 59.1% in 2024Q3, down 1.4 percentage points YoY [5] - Baidu Core non-GAAP sales and administrative expenses were RMB 4.7 billion, accounting for 17.8% of Baidu Core revenue, up 0.8 percentage points YoY [5] - Baidu Core non-GAAP R&D expenses were RMB 4.3 billion, accounting for 16.4% of Baidu Core revenue, down 2.1 percentage points YoY [5] Financial Forecasts - 2024E revenue is forecasted at RMB 132.4 billion, down 1.67% YoY [1] - 2024E net profit attributable to parent company is forecasted at RMB 24.4 billion, up 20.17% YoY [1] - 2024E Non-GAAP net profit is forecasted at RMB 27.1 billion, down 5.78% YoY [1] - 2024E EPS is forecasted at RMB 8.70, with a P/E ratio of 8.60 [1] Market Data - Closing price (HKD): 80.45 [8] - 52-week low/high (HKD): 75.20/119.90 [8] - Price-to-book ratio: 0.87 [8] - Market capitalization (HKD million): 183,461.35 [8] Key Financial Ratios - 2024E Non-GAAP EPS (RMB): 8.70 [18] - 2024E ROE: 9.13% [18] - 2024E gross margin: 50.16% [18] - 2024E net profit margin: 18.45% [18] - 2024E debt-to-asset ratio: 31.84% [18]