Soochow Securities·2025-05-26 05:51Investment Rating - The investment rating for Baidu Group is "Buy" (maintained) [1] Core Views - The report highlights that the short-term impact of AI transformation on the ecosystem significantly affects advertising revenue, while the cloud business shows a positive trend [1] - The company's core revenue for Q1 2025 reached RMB 25.5 billion, a year-on-year increase of 7%, exceeding Bloomberg consensus expectations [1] - Non-GAAP net profit for Q1 2025 was RMB 6.469 billion, also better than market expectations [1] - The report emphasizes the potential of AI tools to enhance advertising efficiency and the ongoing transformation of Baidu's application ecosystem [1] - The cloud business experienced strong growth, with revenue increasing by 42% year-on-year, driven by the accelerated adoption of AI across various industries [1] Summary by Sections Financial Performance - Total revenue for 2023 was RMB 134.598 billion, with a year-on-year growth of 8.83% [1] - The forecast for 2025 estimates total revenue at RMB 134.638 billion, reflecting a slight increase of 1.14% [1] - Non-GAAP net profit for 2023 was RMB 28.747 billion, with a year-on-year growth of 39.01% [1] - The forecast for 2025 estimates Non-GAAP net profit at RMB 23.046 billion, a decrease of 14.65% [1] Business Segments - Advertising business: Online marketing revenue for Q1 2025 was RMB 16 billion, a year-on-year decrease of 6% [1] - Cloud business: Revenue growth accelerated to 42% year-on-year, with significant demand for AI cloud services [1] - Smart driving business: The number of autonomous driving orders exceeded 1.4 million, a year-on-year increase of 75% [1] Valuation Metrics - The latest diluted EPS for 2023 was RMB 7.39, with a forecast of RMB 8.04 for 2025 [1] - The P/E ratio for 2025 is projected to be 9.51 [1] - The report adjusts the Non-GAAP net profit forecasts for 2025-2027 to RMB 230 billion, RMB 244 billion, and RMB 264 billion respectively [1]