BIDU(09888) 西南证券·2024-03-11 16:00Investment Rating - The report maintains a "Buy" rating for Baidu Group-SW (9888.HK) with a target price of HKD 116.96, based on a current price of HKD 96.20 [1]. Core Insights - Baidu's core business remains robust, with AI becoming a new growth driver. In Q4 2023, the company reported revenue of RMB 35 billion, a year-on-year increase of 6%, and a Non-GAAP net profit of RMB 7.8 billion, up 44% year-on-year. For the full year 2023, total revenue reached RMB 134.6 billion, growing 9% year-on-year, while Non-GAAP net profit was RMB 28.7 billion, a 39% increase [2][3]. Summary by Sections Performance Summary - In Q4 2023, Baidu's online advertising revenue was RMB 19.2 billion, reflecting a 6% year-on-year growth, driven by recovery in sectors like travel and healthcare. The monthly active users (MAU) of Baidu APP reached 667 million, a 3% increase year-on-year [2]. - Non-marketing revenue in Q4 2023 was RMB 8.3 billion, up 9% year-on-year, with significant growth in smart cloud and autonomous driving services. The number of developers on the PaddlePaddle platform reached 10.7 million, serving 235,000 enterprises [2]. AI Commercialization - The commercialization of AI is progressing, with the Wenxin large model seeing over 50 million daily calls in Q4 2023, a 190% quarter-on-quarter increase. By December 2023, 26,000 enterprises were using the Wenxin model, a 150% increase from the previous quarter [2][3]. Earnings Forecast - The report forecasts adjusted EPS for Baidu for 2024-2026 to be RMB 10.76, RMB 11.44, and RMB 12.13 respectively. Non-GAAP net profit is expected to continue growing, supported by increasing advertising demand and the ongoing application of AI large models [3][10].