BIDU(09888) 西南证券·2024-05-23 06:02Investment Rating - The report maintains a "Buy" rating for Baidu Group-SW (9888.HK) [1][17] Core Insights - Baidu's core business shows steady growth, with AI becoming a significant driver of business expansion. In Q1 2024, the company reported revenue of 31.5 billion RMB, a year-on-year increase of 1%, and a Non-GAAP net profit of 7 billion RMB, up 22% year-on-year. The profit growth outpaced revenue growth, primarily due to high-quality growth in AI business and improved operational efficiency [2][18] - The online advertising revenue grew steadily, reaching 17 billion RMB in Q1 2024, a 3% increase year-on-year. Baidu is transitioning its advertising user experience from traditional mobile products to generative AI experiences, which is expected to enhance ad conversion rates and attract more advertisers. The Baidu APP's monthly active users (MAU) reached 676 million in March 2024, a 3% increase year-on-year [2][18] - Demand for intelligent cloud services is increasing, and advancements in autonomous driving capabilities are notable. The non-marketing revenue for Q1 2024 was 6.8 billion RMB, a 6% year-on-year increase, driven by intelligent cloud services. As of mid-April 2024, the Baidu PaddlePaddle platform has gathered 13 million developers. In autonomous driving, Baidu's ride-hailing service "Luobo Kuaipao" provided over 6 million rides by April 19, 2024, with a 25% year-on-year increase in Q1 2024 [2][18] - AI tools have been updated to enhance development efficiency. The Wenxin large model has over 200 million users, with a daily API call volume of 200 million. In Q1 2024, several lightweight large language models were launched, along with three major development tools: AgentBuilder, AppBuilder, and ModelBuilder, to assist developers and enterprises in creating intelligent applications and custom models [2][18] Financial Forecast and Rating - The company is expected to achieve adjusted EPS of 10.56 RMB, 11.10 RMB, and 11.69 RMB for the years 2024-2026, with Non-GAAP net profit projected to continue growing over the next three years. As a leading provider of comprehensive internet services, Baidu is actively building a new AI ecosystem, enhancing its AI capabilities to empower advertising, intelligent cloud, and autonomous driving business development. The order volume is expected to continue growing in 2024, maintaining the "Buy" rating [3][19][20]