EBSCN·2026-02-04 07:07Investment Rating - The report maintains a "Buy" rating for Baidu Group-SW (9888.HK) [5] Core Insights - The advertising business is expected to stabilize, while AI cloud services will support long-term growth [1] - The core business revenue is projected to decline by approximately 8.7% year-on-year in Q4 2025, primarily due to weak demand for traditional search advertising and adjustments in traffic structure [1][2] - Non-GAAP operating profit is expected to improve marginally due to the completion of one-time asset impairment in Q3 2025, which will reduce depreciation pressure in Q4 2025 [2] Summary by Sections Online Marketing Business - The advertising revenue for Baidu is estimated to be around 62.2 billion yuan in 2025, reflecting a year-on-year decline of 14.7% [1] - The focus is shifting away from traditional search advertising as AI applications continue to divert user attention [1] Non-Online Marketing Business - AI cloud revenue is projected to reach approximately 27.2 billion yuan in 2025, with Q4 growth expected to slow down due to seasonal factors and high base effects, rather than a decline in demand [2] Profitability - Following the one-time asset impairment in Q3 2025, Non-GAAP operating profit is expected to show continuous positive contributions starting from Q4 2025 [2] Business Progress - AI applications and autonomous driving initiatives are advancing, with commercial prospects viewed positively, although they remain in early stages of commercialization [3] - The Robotaxi order volume is accelerating, and partnerships with Uber and Lyft have been established, marking a significant step in international expansion [3] Kunlun Chip - The self-developed Kunlun chip is enhancing collaborative value, primarily serving as a strategic support in the short term [3] Earnings Forecast and Valuation - Non-GAAP net profit forecasts for 2025-2027 have been slightly revised down to 17.9 billion, 19.8 billion, and 22.4 billion yuan respectively [4] - The valuation reflects the accelerated restructuring of Baidu's AI ecosystem, maintaining a "Buy" rating [4]