Guoxin Securities·2025-11-23 13:48Investment Rating - The investment rating for Baidu Group is "Outperform the Market" [7] Core Insights - Baidu Group reported a total revenue of 31.2 billion yuan in Q3 2025, a year-on-year decrease of 7%. The adjusted net profit attributable to shareholders was 3.8 billion yuan, down 36% year-on-year, with a net profit margin of 12% [1][10] - The company faced a significant impairment loss of approximately 16 billion yuan due to the rapid enhancement of high-performance computing capabilities, which is expected to mark a low point for profit margins, with future improvements anticipated [1][10] - Advertising revenue continued to be under pressure, declining 18% year-on-year to 15.3 billion yuan, accounting for 62% of Baidu's core revenue. The company is accelerating its transition to AI search, with 70% of search result pages now containing AI-generated content [2][16] - AI new business revenue reached 10 billion yuan, with subscription revenue from AI high-performance computing facilities growing by 128% year-on-year. The AI business is divided into three segments: intelligent cloud infrastructure, AI applications, and AI-native marketing services [3][25] Financial Performance and Forecast - For the fiscal years 2025 to 2027, the adjusted net profit is projected to be 19.6 billion yuan, 21.6 billion yuan, and 24.6 billion yuan, respectively, with downward adjustments of 7%, 11%, and 12% [29] - The company expects to see a gradual improvement in profit margins as resource utilization increases [3][25] - The financial forecast indicates a slight decline in revenue for 2025, with an estimated total revenue of 130.4 billion yuan, followed by a recovery in subsequent years [5][33]