BIDU(BIDU) 交银国际证券·2025-02-20 08:02Investment Rating - The report assigns a "Buy" rating for Baidu (BIDU US) with a target price of 90.16 [4][15]. Core Insights - The report highlights that Baidu's AI cloud services have significantly exceeded expectations, revealing the value of its second growth curve. The company is expected to see gradual improvement in its core advertising business revenue starting in 2025, driven by the results of AI search transformations and accelerated commercialization [2][7][8]. Financial Overview - Revenue (in million RMB) is projected to be 134,598 in 2023, slightly decreasing to 133,125 in 2024, and then increasing to 137,420 in 2025, with a growth rate of 3.2% [3][17]. - Net profit is expected to decline from 28,747 million RMB in 2023 to 27,002 million RMB in 2024, before recovering to 24,828 million RMB in 2025 [3][17]. - The report anticipates a recovery in advertising revenue in the second half of 2025, with a projected annual revenue growth of 20% for that year [7][8]. Business Segment Performance - Baidu's core business revenue is expected to reach 1,092 million RMB in 2025, with advertising revenue remaining flat compared to 2024 [8][9]. - The intelligent cloud segment is projected to grow by 26% year-on-year, driven by strong demand for generative AI and large models [7][8]. - The report notes that Baidu's autonomous driving service, "萝卜快跑," has completed over 1.1 million orders, marking a 36% year-on-year increase [7][8]. Valuation and Market Position - The report maintains a valuation of 2x sales for Baidu Cloud in 2025, up from 1x, and a 10x price-to-earnings ratio for its search business, leading to an upward adjustment of the target price to $111 [7][8]. - The report emphasizes the significance of AI cloud as a second growth curve and autonomous driving as a third growth curve for Baidu [7][8].