BIDU-百度集团-SW：搜索+AI的重塑时刻，静待商业化释放

Investment Rating - The report maintains a "Buy" rating for Baidu's stock, with a target price of $166 per ADS in the US market and HKD 162 per share in the Hong Kong market [4][10]. Core Insights - Baidu's Q1 2024 revenue reached RMB 315.13 billion, showing a year-over-year increase of 1% but a quarter-over-quarter decrease of 10%. The adjusted operating profit was RMB 66.73 billion, up 4% year-over-year and down 6% quarter-over-quarter [2][10]. - The core business remains stable, with Baidu Core revenue at RMB 238.03 billion, a 4% year-over-year increase, and core advertising revenue at RMB 170 billion, up 3% year-over-year. The intelligent cloud revenue was RMB 47 billion, reflecting a 12% year-over-year growth [2][10]. - The AI restructuring of Baidu's search products is ongoing, which may temporarily impact advertising revenue but is expected to enhance user experience and increase ad efficiency in the long run [2][10]. Financial Forecasts - Revenue projections for 2024 and 2025 are RMB 1,406 billion and RMB 1,522 billion, respectively, representing year-over-year growth rates of 4% and 8% [2][10]. - Adjusted net profit forecasts for 2024 and 2025 are RMB 304 billion and RMB 332 billion, with growth rates of 6% and 9% [2][10]. - The report anticipates that the adjusted net profit for Baidu's core business (excluding iQIYI) will be RMB 298 billion and RMB 325 billion for 2024 and 2025, respectively, both showing a 9% growth rate [10][11]. Valuation Methodology - The report employs a sum-of-the-parts (SOTP) valuation method, estimating the core marketing business's NOPAT profit for 2024 at RMB 206 billion, with a target P/E ratio of 13x, leading to a valuation of$ 105 per ADS [10][11]. - The intelligent cloud is valued at $15 per ADS based on a price-to-sales ratio of 1.8x, while the autonomous driving technology is valued at$ 30 per ADS [10][11]. - The total estimated value for Baidu is $582 billion, translating to a reasonable value of$ 166 per ADS [10][11].