GOLDEN SUN SECURITIES·2025-11-25 12:31Investment Rating - The report maintains a "Buy" rating for Baidu Group (09888.HK) with a target price of HKD 147 and USD 151 for BIDU.O [3] Core Insights - Baidu's revenue for Q3 2025 was CNY 31.2 billion, a year-on-year decrease of 7.1%. The core revenue was CNY 24.7 billion, down 7.0%, with online marketing services declining by 18.4% to CNY 15.3 billion, while non-online marketing services grew by 20.4% to CNY 9.3 billion [1] - The AI business is showing significant growth, with total revenue nearing CNY 10 billion. The segments include intelligent cloud infrastructure (CNY 4.2 billion, up 33%), AI applications (CNY 2.6 billion, up 6%), and AI-native marketing services (CNY 2.8 billion, up 262%) [2] - Baidu's autonomous driving service, "Luobo Kuaipao," achieved 3.1 million orders, a 212% increase year-on-year, with 100% of its operational cities in China now offering fully autonomous driving [3] Financial Performance - For 2025, Baidu's projected revenue is CNY 128.3 billion, with a non-GAAP net profit of CNY 19.5 billion. The revenue growth rates are expected to be -3.6% in 2025, followed by a recovery of 7.3% in 2026 and 7.4% in 2027 [5][16] - The non-GAAP operating profit margin is projected to be 9.0% for 2025, with a non-GAAP net profit margin of 15.6% [1] - The report outlines a decline in online marketing services revenue, with expectations of a continued decrease of 12.5% in 2025, while intelligent cloud and other services are expected to grow significantly [16] Business Segments - Baidu's core business is expected to generate CNY 105.6 billion in revenue by 2025, with online marketing services projected to decline while intelligent cloud services are anticipated to grow [16] - The report highlights that approximately 70% of Baidu's search result pages now include AI-generated content, indicating a strong push towards AI integration in its core services [1] Market Position - Baidu's market capitalization is approximately HKD 304 billion, with a total share count of 2.83 billion shares, of which 97.05% are freely tradable [6] - The report emphasizes Baidu's strategic partnerships and global expansion efforts in the autonomous driving sector, including collaborations with international transport operators [3]