Guoxin Securities·2025-05-23 12:18Investment Rating - The investment rating for the company is "Outperform the Market" [6][25]. Core Insights - The company's total revenue for Q1 2025 was 32.5 billion yuan, a year-on-year increase of 3%. The adjusted net profit attributable to shareholders was 6.5 billion yuan, a decrease of 7% year-on-year, with an adjusted net profit margin of 20% [1][9]. - The core revenue from Baidu reached 25.5 billion yuan, up 7% year-on-year, while iQIYI's revenue was 7.2 billion yuan, down 9% year-on-year. The online marketing revenue decreased by 6% to 16 billion yuan, but non-online marketing revenue grew by 40%, driven by the intelligent cloud business [1][11][12]. - The advertising business continues to face pressure, with a 6% decline in core advertising revenue. However, 35% of search results now include AI-generated content, indicating a shift towards AI integration [12][20]. Summary by Sections Financial Performance - In Q1 2025, Baidu's total revenue was 32.5 billion yuan, with adjusted net profit at 6.5 billion yuan, reflecting a 7% decline year-on-year. The adjusted net profit margin was 20% [1][9]. - The core business generated an adjusted net profit of 6.3 billion yuan, down 4% year-on-year, with a profit margin of 25% [1][9]. Business Segments - The core business revenue increased by 7% year-on-year, while iQIYI's revenue decreased by 9%. Online marketing revenue fell by 6%, but non-online marketing revenue surged by 40%, primarily due to the growth in intelligent cloud services [11][12]. - The intelligent cloud revenue reached 6.7 billion yuan, marking a 42% year-on-year increase, driven by the rising demand for generative AI and foundational model training [20][21]. Future Outlook - The report anticipates that AI technology will significantly boost both search advertising and intelligent cloud business. The adjusted net profit projections for 2025-2027 are 24.1 billion, 27 billion, and 31.2 billion yuan, respectively [25][27].